Business Context and Reporting Period
This Form 8-K was filed by Digital Ally, Inc. on July 16, 2019, reporting an event that occurred on July 11, 2019. The filing addresses a regulatory notice regarding the company's continued listing status on The NASDAQ Capital Market. Note: The request metadata references "KUSTOM ENTERTAINMENT, INC.", but the filing text explicitly identifies the registrant as "DIGITAL ALLY, INC."
Key Financial Metrics
The filing does not provide specific financial data such as revenue, profit, cash flow, margins, debt, or liquidity. The only quantitative metric disclosed is the Market Value of Listed Securities (MVLS), which has fallen below the required threshold of $35 million for 30 consecutive business days.
Material Changes
- Listing Deficiency: The company received a notice from NASDAQ staff that its MVLS failed to meet the minimum requirement under Nasdaq Listing Rule 5550(b)(2).
- Compliance Period: The company has been granted an 180-calendar day period, ending January 7, 2020, to regain compliance.
- Compliance Requirement: To maintain listing, the MVLS must reach at least $35 million for a minimum of 10 consecutive business days within the 180-day window.
Outlook, Risks, and Management Commentary
Management stated it is monitoring the MVLS and will consider available options to achieve compliance. The filing includes significant risk disclosures regarding the uncertainty of regaining compliance. There is no assurance that the company will meet the MVLS requirement, be eligible for a second compliance period, or receive relief from delisting. If the company fails to comply by January 7, 2020, NASDAQ will notify the company that its common stock will be delisted, at which point the company may have the opportunity to appeal.
Investor Verification Checklist
- Verify the current Market Value of Listed Securities (MVLS) to assess proximity to the $35 million threshold.
- Monitor the company's stock price and trading volume over the next 10 consecutive business days to determine if compliance is being met.
- Review subsequent filings for any announcements regarding a reverse stock split or other capital structure changes intended to boost MVLS.
- Confirm the exact date of any potential delisting notice if the January 7, 2020 deadline is approached without compliance.