Isaiah Lee, 23, has been charged with battery, possession of a weapon with intent to assault, and two charges related to interfering with a performer.
County prosecutors determined that while criminal conduct occurred "the evidence as presented did not constitute felony conduct."
According to ABC News sources, L.A. County prosecutors chose not to move forward with felony charges because Lee wasn't brandishing the knife. He reportedly had it in some sort of bag.
Comedian Tehran Von Ghasri - who was sitting in the front row during Chappelle's performance - said he was shocked and horrified. He spoke with Eyewitness News on Thursday and said he was outraged when he heard of Lee's charges.
"How is this person not being charged with a felony after clearly attacking Dave Chappelle with intent and a deadly weapon on this person in front of 20,000 witnesses?" he said.
Lee was arrested for assault with a deadly weapon the night of the attack. It remains unclear what motivated Lee to run onto the stage.
Ghasri said since Will Smith slapped Chris Rock at the Oscars in March, he and other comedians have been on guard.
"Having the biggest movie star in the world do something to a comedian of that nature, unfortunately, empowers other people to think they should and could do the same and trust me, they can't," said Ghasri. "As Will Smith, he should be much more vigilant in expressing his regret for what he did, and I know there's a lot of concerns on his part for his personal liability, but this goes beyond that. This is about public safety, and public liability."
Since then, the world class Laugh Factory in Hollywood has stepped up security measures and believe the safety protocols in place will prevent anything near what happened at the Hollywood Bowl.
Laugh Factory operations manager Sam Sleiman said since the Oscars incident, the business has beefed up security, adding metal detectors and more security.
Ghasri said a comedy club is a safe space, and the safest of spaces for not only for the comedians, but for the audience as well.