Digital Ally Replaces Auditor RBSM With Victor Mokuolu CPA Despite No Disputes, Amid Going Concern Warning

On May 5, 2025, the Audit Committee (the "Audit Committee") of the Board of Directors of Digital Ally, Inc. (the "Company") approved the dismissal of RBSM LLP ("RBSM") as the Company's independent registered public accounting firm.

 

The reports of RBSM on the Company's consolidated financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that RBSM's reports on the consolidated financial statements of the Company as of and for the years December 31, 2024 contained an explanatory paragraph stating that "The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred substantial operating losses and will require additional capital to continue as a going concern. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty."

 

During the fiscal years ended December 31, 2024 and 2023, and through May 5, 2025, there have been no "disagreements" (as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) with RBSM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of RBSM would have caused RBSM to make reference thereto in its reports on the consolidated financial statements for such years. During the fiscal years ended December 31, 2024 and 2023, and through May 5, 2025, there have been no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K).

 

The Company provided RBSM with a copy of the disclosure it is making herein in response to Item 304(a) of Regulation S-K, and requested that RBSM to furnish the Company with a copy of its letter addressed to the Securities and Exchange Commission (the "SEC"), pursuant to Item 304(a)(3) of Regulation S-K, stating whether or not RBSM agrees with the statements related to them made by the Company in this report. A copy of RBSM's letter to the SEC dated May 7, 2025 is attached as Exhibit 16.1 to this report.

 

(b) Appointment of New Independent Registered Public Accounting Firm

 

On May 5, 2025, the Audit Committee approved the appointment of Victor Mokuolu CPA PLLC ("Mokuolu") as the Company's new independent registered public accounting firm, effective immediately, to perform independent audit services for the fiscal year ending December 31, 2025. During the fiscal years ended December 31, 2024 and 2023 and through May 5, 2025, neither the Company, nor anyone on its behalf, consulted Mokuolu regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written report or oral advice was provided to the Company by Mokuolu that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a "disagreement" (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a "reportable event" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).