Digital Ally 2008 Revenues Rise over 65 percecnt to US$32.5 Million Dollars and Expects 2009 Revenues to $50.0 Million

Digital Ally, Inc., which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial security applications, announced that, on a preliminary unaudited basis, its revenues for the year ended December 31, 2008 increased over 65% to approximately US$32.5 million dollars, compared with revenues of $19.4 million in 2007. The Company expects to report record earnings in 2008, exclusive of non-recurring income tax benefits recorded in 2007, although fourth quarter profitability will be significantly impacted by research and development expenses related to a number of new products to be introduced in coming months. The Company also provided guidance that management expects 2009 revenues to exceed $50.0 million, for an increase of more than 50% from last year's levels.

"During our internal budgeting process, we analyzed the current global economic environment, including the possible budget cuts confronting many federal, state and local government agencies," observed Stanton E. Ross, Chief Executive Officer of Digital Ally, Inc. "Based upon information available, we believe the continued success of our DVM-500 In-Car Digital Video System Integrated into a Rear View Mirror, combined with the anticipated impact of new products on our sales volumes, should allow Digital Ally to increase its 2009 revenues to at least $50.0 million, when compared with record 2008 revenues of approximately $32.5 million."

"While the current economic recession has slowed equipment procurement timelines at many government agencies, the growing popularity of our DVM-500 In-Car Digital Video system among domestic and international law enforcement agencies, combined with the marketing strength of our World Wide Sales Organization, have positioned Digital Ally to build upon its success through the planned introduction of at least five new products in 2009," continued Ross. "We expect that international orders will account for approximately 30% of the Company's revenues this year. Digital Ally continues to take market share from competitors, some of which have been weakened by the current market environment, illustrating the critical importance of product performance, innovative engineering and the ability to deliver value to customers during challenging times such as these. The recent addition of new Sales, Marketing and Support personnel with extensive experience in law enforcement, school bus and mass transit video equipment sales should serve Digital Ally well as it expands into new markets during the current year."

Regarding the "strategic alternatives" process that has been underway since November 2008, the Company reiterated that it expects a resolution to the process during the first quarter of 2009. As previously announced, Digital Ally has retained Banc of America Securities as its financial advisor in connection of the Company's consideration of a range of strategic alternatives designed to enhance shareholder value.

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