UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Form 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 8, 2020 (April 3, 2020)

 

 

 

DIGITAL ALLY, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Nevada   001-33899   20-0064269

(State or other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

9705 Loiret Blvd., Lenexa, KS 66219

(Address of Principal Executive Offices) (Zip Code)

 

(913) 814-7774

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
Common stock, $0.001 par value   DGLY   The Nasdaq Capital Market, LLC

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

     

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

As announced in a press release on April 6, 2020, effective April 3, 2020, Digital Ally, Inc. (the “Company”) entered into a Wholesale Distribution Agreement (the “Agreement”) with Trust Think, LLC, which is a Division of Think, LLC (“Trust Think”). The press release is attached hereto as Exhibit 99.1. Pursuant to the terms of the Agreement, the Company has been engaged to service, promote, and sell certain Danolyte® disinfecting products, which are manufactured and distributed by Trust Think (the “Products”), to certain first responder and commercial customers with whom it has relationships. The Company will receive a percentage of the sales sold through its distribution channels.

 

The Agreement has an initial term beginning on April 3, 2020 and ending one (1) year thereafter. Thereafter, the Agreement renews automatically for successive additional terms of one (1) year each unless the Company or Think Tank provides written notice of non-renewal at least thirty (30) days prior to the expiration of the then current term. Either party may terminate the Agreement at any time, effective immediately upon written notice if it has good cause for termination as defined in the Agreement. The foregoing summary of the Agreement, does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

10.1   Form of Wholesale Distribution Agreement, dated April 3, 2020.
     
99.1   Press Release of Digital Ally, Inc., dated April 6, 2020.

 

     

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: April 8, 2020

 

  Digital Ally, Inc.
     
  By: /s/ Stanton E. Ross
  Name: Stanton E. Ross
  Title: Chairman, President and Chief Executive Officer

 

     

 

 

Exhibit 10.1

 

TRUST THINK, LLC WHOLESALE DISTRIBUTION AGREEMENT

 

THIS AGREEMENT, effective upon the date the agreement is executed, between Trust Think, LLC a Division of Think, LLC, a corporation with its main business office at 8997 Commerce Dr., De Soto, KS 66018, hereinafter called “Company,” and Digital Ally, Inc, a Nevada Corporation with its main business office at 9705 Loiret Blvd, Lenexa, KS 66219, hereinafter called “DISTRIBUTOR.”

 

WHEREAS, Company manufactures and distributes Danolyte Global, LLC., “Danolyte”, products for commercial use under various brands; and

 

WHEREAS, Company desires that Distributor act in connection with the servicing, promotion, and sale of those Danolyte products listed in Attachment A (“Products”), which attachment Company may modify, with written notice to Distributor, from time to time, and Distributor desires to so act;

 

NOW, THEREFORE, Company, in consideration of certain agreements hereinafter set forth and to be performed by Distributor, hereby engages non-exclusively to market, promote, and sell Company’s Danolyte (“Products”) to First Responder and Commercial customers; list will be provided to Company in electronic format. Company will protect Digital Ally, Inc. for any and all customers provided hereby. If any other Representative solicits or sells to any customer on this protected list Company agrees to notify such Representative of such violation and to cease and desist all such activities. All Customers must be agreed upon by Distributor and Company in writing, by email, facsimile, or other verifiable communication. Distributor shall present Products to Customers whenever applicable and appropriate, arrange meetings with Customers on behalf of Company and may, upon Company’s request and at Distributor’s discretion, introduce Company or Company’s agent to Customer and/or assist Company with development of Products. ( See attachment B for Customer ‘MRP’, minimum retail price requirements.)

 

The parties mutually agree as follows:

 

1. Term. This Agreement shall have an initial term beginning on the Effective Date and ending One (1) year thereafter. Thereafter, the Agreement shall automatically renew for successive additional terms of one year each unless Company or Distributor provides written notice of non-renewal at least thirty (30) days prior to the expiration of the then current term. Notwithstanding the foregoing, either party may terminate this Agreement at any time, effective immediately upon written notice if it has good cause for termination.

 

2. All Sales Subject to Company’s Terms and Conditions. All Products represented by Distributor shall be sold subject at Company’s prices, terms, conditions, and confirmation by Company at its main office, and in amounts and assortments authorized by, and to customers approved by Company. (Attachment A) Distributor shall not solicit nor accept orders from buyers located outside Distributor’s assigned territory or assigned area of responsibility. All remittances due to Company shall be made by Distributor directly to Company, unless otherwise instructed by Company. Distributor understands that a Distributor’s order shall be subject to credit approval by Company and that Company shall be the sole judge of a Distributor’s credit-worthiness. If for any reason the Distributor does not accept delivery or if Company does not affect delivery to the Distributor because in Company’s judgment Distributor’s credit standing is impaired, Company shall be entitled to sell or otherwise dispose of Products and in such event Distributor shall not be entitled to remuneration thereon. All orders shall be booked and transmitted in the name of the actual Distributor.

 

3. Coverage/Commission Adjustments. Notwithstanding any other provision of this Agreement, Company shall have the option to modify this Agreement to implement changes in coverage or services. In the event Company exercises this option, the terms payable hereunder shall be adjusted to reflect modified Distributor responsibilities, as agreed to by Company and Distributor.

 

     
 

 

4. Confidential Information. Distributor and Company each acknowledges that from time to time each party to this Agreement will have access to certain confidential and proprietary information and systems of the other party (the “Disclosing Part”) which is generally not available to or known by the public, in which the Disclosing Party has a legitimate protectable interest and which has particular value to the Disclosing Party, the disclosure of which could be harmful to the Disclosing Party’s interests (the “Confidential Information”). During the term of this Agreement and for a period of two (2) years thereafter, Distributor and Company each agree that it shall not directly or indirectly disclose such Confidential Information to any third party except as required by law or regulation or use any Confidential Information for any purposes not expressly authorized in writing by the Disclosing Party. Confidential Information means any and all information, whether disclosed in writing or orally, identified as confidential by the Disclosing Party. For purposes of this Agreement, Company information relating to Company business strategies, deal rates, promotional rates, marketing plans, new item introductions and business development opportunities shall be considered Confidential Information. Confidential Information may also include, but is not limited to: business Models and plans, proprietary computer software and sales planning and execution processes, information and/or knowledge regarding products, processes, techniques, trade secrets, strategies and programs, financial data, vendor and customer relationships, methods of operation and other information or materials in any form proprietary to a party. For purposes of this Agreement, Confidential Information shall not include the following:

 

  (a) Information available in the public domain, not as a result of the violation of any undertaking herein;
     
  (b) Information available to either party on a non-confidential basis prior to disclosure of it by the other party;
     
  (c) Information that is available from a third party, provided that such source is not violating any duty or agreement of confidentiality;
     
  (d) Information that is independent developed by a party and such independent development can be reasonably substantiated;
     
  (e) Information that is required to be disclosed by law or legal process.

 

5. Non-Solicitation. During the ten of this Agreement and for a period of one (1) year following its termination, the parties agree not to, without the prior approval of the other party (which approval shall be provided in writing or e-mail), solicit or induce any employee of the other, either directly or indirectly, to leave such employment and/or become an employee of the other or any company affiliated with or related to such party. Notwithstanding the foregoing, a general solicitation, such as through a newspaper, website or trade journal, and any hiring related thereto, shall not be prohibited by this section.

 

6. Termination. Either party may terminate this Agreement at any time, effective immediately upon written notice for good cause.

 

(a) Without limiting the applicable law, the following circumstances shall constitute good cause for termination:

 

(i) the other party shall be in material breach of any of its obligations under this Agreement and, where the breach involves an ongoing obligation that is capable of cure, such party shall have failed to cure such breach within thirty (30) days after receiving written notice from the other party of the existence of such breach. For purposes of this section, “material breach” shall include, without limitation, any failure by Distributor to substantially achieve quarterly or annual qualitative and/or quantitative performance objectives; comply with Company’s Deduction Management Policy (provided that Distributor may comply with the document retention requirements of such policy by transferring covered documents to Company); and comply with Company’s Sales Policy and Procedures, Manual and such other policies and procedures as Company may issue from time to time that are agreed to in writing by Company and Distributor; “material breach” shall also include C01npany’s failure to deliver product timely and in the quantities and quality required by accepted purchase orders in accordance with the terms of this Agreement; or

 

     
 

 

(ii) the other party shall have become insolvent or filed a petition in bankruptcy, or entered into a composition with its creditors, or had a receiver appointed for its assets, or become the subject of any winding up of its business or any judicial proceeding relating to or arising out of its financial condition.

 

7. Post Termination. Immediately upon notice of termination being served by either party, Company shall have the right to obtain orders through another Distributor or sales office and Distributor shall have the right to offer its services to third parties, subject to the confidentiality provisions set forth herein. Since Distributor will not be obtaining such Company orders, Distributor shall have no right to remuneration on said orders. Company is not obligated to accept orders from Distributor for shipment after the termination date.

 

8. Indemnification. Distributor agrees to indemnify Company for expenses and losses incurred by Company and caused by Distributor’s gross negligence or actions in violation of the terms of this Agreement, or in violation of any laws, regulations, or policies of Company, or without written authorization of Company. Company agrees to indemnify and hold harmless Distributor from and against any and all claims, demands, actions, proceedings and costs (including reasonable attorneys’ fees), in any way resulting from the gross negligence of Company, its employees, or agents in the performance of this Agreement, and any loss or injury resulting from and/or arising out of products, point of sale materials and/or other product related materials and/or goods, supplied in connection with this Agreement, including but not limited to, any defect in merchandise, or the purpose or use of any product manufactured, produced or distributed by Company, except to the extent of Distributor’s responsibility set forth in the preceding sentence.

 

10. Further Actions. Each of the Parties agrees to execute, acknowledge, and deliver such additional documents, and take 9ch further actions, as may reasonably be required from time to time to carry out each of the provisions and the intent of this Agreement, and every agreement or document relating hereto, or entered into in connection herewith.

 

10. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

11. Successor and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, legal Distributors, and assigns. This Agreement may not be assigned by any party without the express written consent of the other parties.

 

12. Notices. All notices, requests, demands, and other communications made hereunder shall be in writing and shall be deemed duly given if delivered or sent by telex, facsimile, or registered or certified mail, postage prepaid, as follows, or to such other address or person as the party may designate by notice to the other party hereunder:

 

Company Distributor
Trust Think, LLC. Digital Ally, Inc.
8997 Commerce Drive 9705 Loiret Blvd
De Soto, KS 66018 Lenexa, KS 66219
Joseph J. Bisogno, Owner Stanton E. Ross, CEO

 

13. Attorneys’ Fees. In the event of any litigation, arbitration or other dispute arising as a result of or by reason of this Agreement, the prevailing party in any such litigation.

 

     
 

 

14. Governing Law. This agreement shall be governed by, and interpreted in accordance with the laws of the State of Kansas. The parties hereby agree that any legal action or proceeding shall be brought in the courts of the State of Kansas, County of Johnson. The parties further agree to submit to the jurisdiction of the State of Kansas and consent to the service of process in accordance with applicable procedures and rules of said jurisdiction.

 

15. Entire Agreement/Modification. This Agreement contains the entire understanding of the parties with respect to the subject matter of the agreement, and it supersedes ail prior understandings and agreements, whether written or oral, and all prior dealings of the parties with respect to the subject matter hereof. This Agreement, in whole or in part, cannot be changed, modified, extended, or discharged orally and no waiver of compliance with any provision or condition hereof and no consent provided for herein shall be effective unless evidenced by an instrument in writing duly executed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought. Further, no consent or waiver, express or implied, to or of any breach or default shall constitute a consent or waiver to or of any other breach.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of this __ day of April 2020.

 

Company   Distributor

TRUST THINK. LLC

  DIGITAL ALLY, INC.
     

 

     

 

 

Exhibit 99.1

 

Digital Ally, Inc. Partners With Trust Think Products to Provide Protection and Combat the COVID-19 Pandemic for First Responders

 

Digital Ally to Provide First Responders With Hospital Grade Disinfectant

 

Lenexa, KS | April 6, 2020

 

Digital Ally, Inc. (NASDAQ: DGLY), which develops, manufactures and markets advanced video recording products for law enforcement, emergency management, fleet safety and security, today announced it has partnered with Trust Think Products, LLC a De Soto, KS-based company that is the exclusive distributor of the Danolyte® disinfectant. Danolyte, is a one-step disinfectant cleaner designed for cleaning and disinfecting hard, non-porous environmental surfaces in health-care facilities. Danolyte has demonstrated effectiveness against viruses similar to SARS-CoV-2 on hard porous and/or non-porous surfaces and has been listed on the EPA’s List N: Disinfectants for Use Against SARS-CoV-2, the virus that causes the novel COVID-19 disease also known as the coronavirus. Additional information can be found by clicking here.

 

Danolyte disinfectant is a powerful antimicrobial fluid for use across a broad spectrum of applications, yet gentle enough for use on baby toys. The Danolyte disinfectant offers disinfection, sanitizing and deodorizing solutions for many industries other than first responders including water treatment, agriculture, oil and gas, healthcare, education, and food service/processing. It has been shown effective over many years of use and is effective over a broad range of viruses and bacteria such as the coronavirus, MRSA, HIV, Listeria, Influenza A, Hepatitis C and Salmonella among many others.

 

In response to the coronavirus pandemic the two companies have partnered to provide first responders with the Danolyte to disinfect workspaces like patrol vehicles, ambulances and other surfaces with no harsh chemicals, harsh fumes, or chemical residuals.

 

Stan Ross, CEO of Digital Ally, Inc., stated “Amid the coronavirus pandemic, we have partnered with Trust Think Products to provide first responders with vital disinfecting products that they can trust to provide defenses against the spread of the coronavirus disease as well as many others. The ultimate goal is to use our existing relationships to provide first-responders and others with the safest working space possible during this time and we are confident this partnership will help achieve this goal,” concluded Mr. Ross.

 

Joe Bisogno, CEO Trust Think Products, stated “With over 15 years of working with first responders, including EMS, taxi-cab, hospital paratransit, law enforcement officers as well as many commercial fleets, Digital Ally will be able to help expedite distribution of the highly effective cleaning solution needed to eliminate the coronavirus among many other viruses and bacteria. We are excited to work with such a respected company in Digital Ally, Inc.,” concluded Bisogno.

 

Customers are encouraged to visit the Company website at www.digitalallyinc.com, or contact the Company at 800-440-4947 to obtain further information and to order the Danolyte product.

 

Digital Ally Fourth Quarter and Year-End Operating Results Conference Call

 

Digital Ally will host an investor conference call on Monday, April 6, 2020 at 11:15 a.m. eastern time to discuss its operating results for fourth quarter and the year ended December 31, 2019. Shareholders and other interested parties may participate in the conference call by dialing (844) 761-0863 and entering conference ID #3474957 a few minutes before 11:15 a.m. Eastern on Monday, April 6, 2020.

 

     

 

 

About Digital Ally

 

Digital Ally®, headquartered in Lenexa, KS, specializes in the design and manufacturing of the highest quality video recording equipment and video analytic software. Digital Ally pushes the boundaries of technology in industries such as law enforcement, emergency management, fleet safety and security. Digital Ally’s complete product solutions include vehicle and body cameras, flexible software storage, and automatic recording technology. These products work seamlessly together and are simple to install and operate. Digital Ally products are sold by domestic direct sales representatives and international distributors worldwide.

 

About Think Trust, Inc.

 

Trust Think, Inc. located in Desoto, KS, collaborates with scientists, researchers, doctors and veterinarians to develop and distribute all-natural products designed to improve the health and well-being of people, pets, livestock and wildlife.

 

Contact Information

Stanton Ross, CEO

Tom Heckman, CFO

Digital Ally, Inc

913-814-7774

info@digitalallyinc.com

 

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: whether the Company will effectively manage the disruptions to its supply chain and business activities caused by the coronavirus including when it will cease to impact our business and the results of our operations; whether the Company will be able to effectively market and distribute the Danolyte® product to its first-responder and other customers; whether the Company can acquire the Danolyte® product in the quantities and timing necessary to serve its customers; whether the Company will be able to distribute the Danolyte® product in a cost-effective, profitable manner; whether the Danolyte® will be proven effective against the coronavirus as claimed by its manufacturer; whether the Company will be able to maintain or expand its share of the markets in which it competes with the new EVO-HD; whether and the extent to which customers will accept the new platform of products being developed with the EVO-HD system with the Company’s VuLink® technology; whether the Company will be able to adapt its technology to new and different uses, including being able to introduce new products; 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 and whether the Company will be successful in its patent infringement litigation with Axon Enterprises, Inc. 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, 2019, which will be filed with the Securities and Exchange Commission on or about April 6, 2020.