Digital Ally Receives Order From State Police Of Michigan Valued at More Than $1.1 Million

Inclusion of DVM-800 Increases Total Contract Value by Over 40% to $6.5 Million

LENEXA, KS--( Aug 28, 2014) - Digital Ally, Inc. (NASDAQ: DGLY) ("the Company"), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, today announced the receipt of an order valued at more than $1.1 million from the State of Michigan.secsec

On December 3, 2013, Digital Ally announced that the Michigan State Administrative Board had approved appropriations for a one-year extension of its statewide contract with the Company, along with the expenditure of an additional $1.0 million for purchase of the Company's DVM-500Plus In-Car-Video Systems.

The Company was originally awarded a three-year contract with the State of Michigan that, in addition to the State Police, allows any state, municipal or county agency to purchase Digital Ally's products without requiring competitive bid. The one-year extension brought the full value of the Michigan State Police contract to $4.5 million, including orders previously received under the original three-year contract.

Shortly after the extension of the statewide contract, Digital launched a series of new products, including the DVM-800 In-Car Video System and the patented VuLink device, which connects the Company's in-car-systems with its FirstVU HD body-worn cameras. Digital Ally originally expected significant orders from the Michigan State Police during either or both of the first two quarters of 2014. These orders did not materialize because the Michigan State Police elected to undertake an extensive test and evaluation program that specifically involved the DVM-800 system. This program was recently completed, and the Company's DVM-800 system has now been selected for full deployment by the Michigan State Police cruiser fleet.

Michigan has now extended and increased the size of the contract with Digital Ally to include the DVM-800, with a $2.0 million increase in funds appropriated for this purpose. The value of the total contract awarded to Digital Ally now approximates $6.5 million, which includes the original three-year contract plus the two extensions that are now in effect. The Company has received its first purchase order, which is valued at over $1.1 million, under this newly extended contract. This order is expected to ship in the quarter ending September 30, 2014.

"The Michigan contract is a great example of how our DVM-800 has been disruptive to the industry and has been accepted by our customers and potential customers," noted Stanton E. Ross, Chief Executive Officer of Digital Ally, Inc. "We believe the DVM-800 was selected for its rich features, unparalleled five-year extended warranty with advanced replacement availability, the patented VuLink connectivity option, and its superior overall cost/benefit proposition."

"Many of our current and potential customers are evaluating our new DVM-800 in-car-video system and FirstVU HD body-worn cameras, together with the patented VuLink interconnectivity device," continued Ross. "The test results have been positive, and we believe a majority of customers that have undertaken such test and evaluation programs will select our total package, which addresses the need for secure video and audio evidence from many different viewpoints as incidents in the field unfold."

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial applications. The Company's primary focus is digital video imaging and storage. For additional information, visit www.digitalallyinc.com.

The Company is headquartered in Lenexa, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY".

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: the Company's ability to obtain additional orders from law enforcement agencies in the State of Michigan; whether the federal economic stimulus funding for law enforcement agencies will have a positive impact on the Company's revenue; the Company's ability to deliver its new product offerings, including the FirstVU HD, DVM-800 and VuLink, as scheduled, obtain the required components and products on a timely basis, and have them perform as planned; its ability to maintain or expand its share of the markets in which it competes, including those outside the law enforcement industry; whether there will be an adequate commercial market, domestically and internationally, for one or more of its new products, including the FirstVU HD, DVM-800 and VuLink; whether the interest shown in the Company's newer products will translate into sales of such products; whether the FirstVU HD and DVM-800 will continue to generate an increasing portion of its total sales; whether the Company will be able to adapt its technology to new and different uses, including being able to introduce new products; whether and the extent to which the new patents allowed by the US Patent Office will give the Company effective, enforceable protection of the intellectual property contained in its products in the marketplace; the outcomes of the Company's litigation with various parties; competition from larger, more established companies with far greater economic and human resources; its ability to attract and retain customers and quality employees; the effect of changing economic conditions; and changes in government regulations, tax rates and similar matters. These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company's disclosures. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. The Company does not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2013 and quarterly report on Form 10-Q for the three and six months ended June 30, 2014, as filed with the Securities and Exchange Commission.

For Additional Information, Please

Stanton E. Ross
CEO
(913) 814-7774


or

RJ Falkner & Company, Inc.
Investor Relations Counsel
(800) 377-9893
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