Digital Ally

Kurta Law is investigating brokers who recommended shares of Digital Ally (NASDAQ: DGLY). Digital Ally stocks are extremely risky and are not suitable for many investors. Investors who specified they wanted moderate or low-risk investments should not have these investments in their portfolios. Brokers who recommended these investments may have violated securities rules and regulations, such as Regulation Best Interest.   

If you would like to speak with a securities attorney about a potential case, call (877) 600-0098 or email info@kurtalawfirm.com.  

What is Digital Ally?  

According to the prospectus, Digital Ally produces digital video imaging and storage products for use in law enforcement, security, and commercial applications. At the time of the prospectus, their products included in-car digital video/audio recorders and hands-free audio/video body-worn cameras. The prospectus also states that the company offers cloud storage solutions.  

The Digital Ally Offering  

According to the prospectus dated February 27, 2020, Digital Ally offered 2,521,740 shares of common stock for a public offering price of $1.15 per share. The prospectus is the document companies file with the SEC to register their stock offering.  

Risks Related to Digital Ally Investments 

The prospectus discloses, “Investing in our securities involves a high degree of risk.” This is only a list of highlighted risks Kurta Law wants investors to review – you can read the complete list starting on page S-9 of the prospectus.  

Net Losses  

At the time of the securities offering, Digital Ally had incurred losses for several years. If the company were to be unsuccessful in reducing costs, it could have an adverse effect on its financial condition. 

Developing Market  

Digital Ally’s products are part of a rapidly evolving market, according to the prospectus. It is impossible to predict how the market will change and if the market will continue to grow.  

Volatility Related to the Price of Common Stock  

The market price for Digital Ally may be volatile compared with shares of larger, more established companies that trade on the national exchange, in part because it is, according to the prospectus “sporadically and thinly traded.”  

Prepayment Provision of Promissory Notes  

Digital Ally’s scheduled payments for promissory notes due August 4, 2020, may affect the company’s cash flow.  

Dilution of Shares of Common Stocks 

Investors exercising their warrants or options contracts may dilute the value of your common shares. 

Management Use of Proceeds 

Digital Ally’s management had broad discretion when it came to using the net proceeds, which means that management may use the net proceeds in ways that you disagree with or that may not prove effective. 

Aegis Capital Corp. Underwriting   

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help  

If you invested in Digital Ally, consider reaching out to a securities attorney for help. In order to recover from investing losses, investors are typically required to go through a process called FINRA arbitration rather than suing in civil court. Our securities attorneys are experts in FINRA arbitration and only charge a fee if they win your case. Contact us for a free case evaluation today – Call (877) 600-0098 or email info@kurtalawfirm.com.