Core Viewpoint - Digital Ally, Inc. has announced a public offering expected to generate approximately $15.0 million in gross proceeds, aimed at supporting its operations and growth initiatives [1][4]. Group 1: Offering Details - The offering consists of 100,000,000 Common Units, each including one share of Common Stock or one Pre-Funded Warrant, along with Series A and Series B Registered Common Warrants [2]. - The public offering price per Common Unit is set at $0.15, with Pre-Funded Units priced at $0.149 [2]. - The Series A Warrants have an exercise price of $0.1875 and expire five years after stockholder approval, while Series B Warrants have an exercise price of $0.300 and expire 2.5 years after stockholder approval [2]. Group 2: Underwriting and Closing - Aegis Capital Corp. is the sole book-running manager for the offering, with a 45-day option to purchase additional shares and warrants to cover over-allotments [3][5]. - The transaction is expected to close on or about February 14, 2025, pending customary closing conditions [4]. Group 3: Use of Proceeds - The net proceeds from the offering, along with existing cash, will be utilized for general corporate purposes and working capital [4]. Group 4: Company Overview - Digital Ally, Inc. specializes in video solution technology and safety products across various sectors, including law enforcement and emergency management [1][8]. - The company is focused on growth through innovation and strategic acquisitions of organizations with positive earnings and growth potential [8].

Revenue Performance - Total net revenues for Q3 2024 were $4,051,711, a decrease of 36% compared to $6,337,699 in Q3 2023[442] - Video Solutions segment revenue decreased to $1,196,362 in Q3 2024 from $1,797,348 in Q3 2023, representing a decline of 33.5%[442] - Revenue Cycle Management segment revenue slightly decreased to $1,601,792 in Q3 2024 from $1,636,543 in Q3 2023, a decline of 2.1%[442] - Entertainment segment revenue decreased significantly to $1,253,557 in Q3 2024 from $2,903,808 in Q3 2023, a decline of 56.7%[442] - Total revenue for the three months ended September 30, 2024, was $4,051,711, a decrease from $6,337,699 in the same period of 2023, representing a decline of approximately 36%[451] Profitability and Loss - Total gross profit for Q3 2024 was $1,739,974, compared to $1,226,149 in Q3 2023, an increase of 42%[442] - The company reported an operating loss of $7,382,299 for Q3 2024, compared to an operating loss of $5,148,043 in Q3 2023[442] - The company experienced a net loss of $5,470,712 on revenues of $4,051,711 for Q3 2024[445] - Gross profit for the same period was $1,739,974, with a gross profit margin of 42.9%, significantly up from 19.3% in September 2023[451] - Operating loss for the three months ended September 30, 2024, was $(7,382,299), compared to $(5,148,043) in the same period of 2023, reflecting a worsening of approximately 43%[451] - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $(5,470,712), compared to $(3,679,043) in September 2023, indicating an increase in loss of approximately 49%[451] Expenses - Total selling, general, and administrative expenses increased to $9,122,273, compared to $6,374,192 in September 2023, marking an increase of approximately 43%[451] - Research and development expenses accounted for 5% of total revenue in September 2024, down from 9% in September 2023[453] - Selling, advertising, and promotional expenses were 10% of total revenue in September 2024, a decrease from 30% in the same period of 2023[453] Asset and Liabilities - Identifiable assets as of September 30, 2024, were $32,263,169, down from $47,028,809 as of December 31, 2023[444] - The company has no off-balance sheet debt or significant relationships with unconsolidated entities that may materially affect financial conditions[446] Impairments and Derivatives - The company reported a significant goodwill and intangible asset impairment charge of 119% of total revenue for the three months ended September 30, 2024[453] - The change in fair value of derivative liabilities was reported at 62% of total revenue for the three months ended September 30, 2024[453] Product Development - The company has diversified its product offerings with the introduction of ThermoVu™ and Shield™ lines in 2020[435] - The revenue cycle management segment has completed four acquisitions since its formation in 2021, enhancing its service capabilities[438]

Core Insights - Kustom Entertainment, Inc. has announced the lineup for the 2025 Country Stampede Festival, scheduled for June 26-28, 2025, at Azura Amphitheater in Bonner Springs, Kansas, featuring major country music artists [1][2] - The festival is expected to sell out, following a record-breaking ticket sales period during Black Friday through Cyber Monday [3] - A Battle of the Bands competition has been launched, allowing regional bands to compete for a performance slot at the festival [4][5] Event Details - The festival will feature performances from artists such as Luke Bryan, Miranda Lambert, and Cole Swindell, along with local talent on the Platinum Club Stage [2] - Tickets are currently available for purchase, with various options including Superfan Pit Passes and Camping Packages [6] Company Background - Kustom Entertainment, a subsidiary of Digital Ally, Inc., specializes in producing live entertainment experiences and the Country Stampede Festival is one of its flagship events [7]

Core Insights - Digital Ally, Inc. is advancing its position in the video technology sector with innovative solutions aimed at enhancing security and efficiency [1] - The company has signed approximately 160 new subscription contracts in 2024, indicating strong demand for its FirstVu PRO body-worn cameras and EVO-HD in-car video solutions [2] - Digital Ally is addressing operational delays, including over $1,500,000 in backordered products, and expects to fulfill these backorders within the next 120 days [3] Product Developments - The company plans to unveil advancements in its video solutions, including the FirstVu PRO Utility integrated on body cameras, which will feature multiple advanced capabilities requested by customers [4] - Continuous updates to the EVO-Web platform are being released, with the latest version V2.3 focusing on bug fixes and new features to meet client needs [4] Leadership Commitment - CEO Stan Ross emphasized the company's unwavering commitment to innovation and excellence, aiming to meet current and future partner needs [5]

Core Points - Clover Leaf Capital Corp. (CLOE) is convening a special meeting of stockholders on September 27, 2024, to vote on a proposed business combination with Kustom Entertainment, Inc. [1] - The meeting will be held at 10:00 a.m. Eastern Time and will be accessible via live webcast [2] - The deadline for holders of Clover Leaf's Class A common stock to submit shares for redemption in connection with the business combination has been extended to September 25, 2024 [2] Company Overview - Clover Leaf Capital Corp. is a special purpose acquisition company (SPAC) formed to effect a merger or similar business combination with one or more businesses [9] - Kustom Entertainment, Inc. is a wholly-owned subsidiary of Digital Ally, which oversees TicketSmarter, Kustom 440, and BirdVu Jets [5][8] - TicketSmarter provides tickets for over 125,000 live events and is the official ticket resale partner for numerous collegiate conferences and universities [6] Business Combination Details - The business combination involves an Agreement and Plan of Merger among Clover Leaf, its subsidiary Merger Sub, Yntegra Capital Investments LLC, and Digital Ally [1] - Following the business combination, the management teams of TicketSmarter, Kustom 440, and BirdVu Jets will be combined to focus on concerts and entertainment partnerships [8]

Core Viewpoint - Clover Leaf Capital Corp. has postponed its special meeting to approve the business combination with Kustom Entertainment to September 20, 2024, allowing stockholders more time to participate in the decision-making process [1][2]. Company Overview - Clover Leaf Capital Corp. is a special purpose acquisition company (SPAC) formed to effect a merger or similar business combination with one or more businesses [9]. - Kustom Entertainment, Inc. is a wholly-owned subsidiary of Digital Ally, formed to oversee TicketSmarter, Kustom 440, and BirdVu Jets [5][8]. Business Combination Details - The meeting will involve voting on the proposed initial business combination with Kustom Entertainment, which is structured under a Merger Agreement [1]. - The deadline for holders of Clover Leaf's Class A common stock to submit shares for redemption in connection with the business combination has been extended to September 18, 2024 [2]. Subsidiary Operations - TicketSmarter offers tickets to over 125,000 live events and is the official ticket resale partner for more than 35 collegiate conferences and over 300 universities [6]. - Kustom 440 focuses on managing and promoting concerts, sports, and private events, leveraging its ticketing platform and relationships with artists and venues [7]. - BirdVu Jets is also part of Kustom Entertainment's portfolio, contributing to the overall entertainment and ticketing strategy [8].

Core Viewpoint - Clover Leaf Capital Corp. has postponed its special meeting to approve the business combination with Kustom Entertainment to August 27, 2024, at 4:30 p.m. Eastern Time [1][2]. Group 1: Meeting Details - The special meeting was originally scheduled for August 20, 2024, and is now rescheduled to August 27, 2024 [1]. - Stockholders will vote on the proposed business combination with Kustom Entertainment, which is part of a merger agreement involving multiple parties [1]. - The deadline for holders of Clover Leaf's Class A common stock to submit shares for redemption has been extended to August 23, 2024, at 5:00 p.m. Eastern Time [2]. Group 2: Company Background - Clover Leaf Capital Corp. is a special purpose acquisition company formed to effect a merger or similar business combination [9]. - Kustom Entertainment, a wholly-owned subsidiary of Digital Ally, oversees TicketSmarter, Kustom 440, and BirdVu Jets [5][8]. - TicketSmarter provides tickets for over 125,000 live events and is the official ticket resale partner for numerous collegiate conferences and universities [6]. Group 3: Business Combination Implications - Following the business combination, the management teams of TicketSmarter, Kustom 440, and BirdVu Jets will merge to focus on concerts and entertainment partnerships [8]. - Kustom 440 aims to attract and manage concerts, sports, and private events, leveraging its ticketing platform and relationships with artists and venues [7].

Financial Data and Key Metrics Changes - Current assets decreased to $14.2 million, down $1.3 million from year-end [4] - Total assets were $43.3 million compared to $47 million on December 31 [4] - Total current liabilities increased to $27.6 million, with a significant portion attributed to warrant derivative liabilities [4] - Total liabilities amounted to $40.3 million [4] - Total stockholders' equity at the end of Q2 was just over $3 million [5] - Total revenue for the quarter was $5.6 million, with a gross profit of $242,000 [5] - Operating loss was $3.9 million, and net loss was $5 million, resulting in a net loss per share of $1.74 [5] Business Line Data and Key Metrics Changes - Deferred revenue grew to over $10.5 million, indicating a successful subscription model [6] Market Data and Key Metrics Changes - The company is involved in the entertainment sector through the acquisition of Country Stampede, a significant country festival in Kansas [12] Company Strategy and Development Direction - The company is focused on the business combination agreement to sell Kustom Entertainment to Clover Leaf Capital, which is expected to enhance clarity and value for shareholders [7][10] - The strategy includes a subscription model to reduce capital expenditures for clients, allowing for recurring revenue [17][18] Management Comments on Operating Environment and Future Outlook - Management expressed excitement about the merger prospects and the value it brings to Digital Ally and its shareholders [9][11] - The company is optimistic about the future of the Country Stampede festival and plans to enhance its offerings for the next year [12] Other Important Information - The company is preparing for a shareholder vote regarding the business combination agreement, with updates to follow [20] Q&A Session Summary Question: Clarification on shares outstanding - Management clarified that shares outstanding were 3.5 million at quarter-end due to unexercised prefunded warrants, which have since increased to a little less than 3.9 million [13][14][15] Question: Update on FirstVu Pro and deferred revenue - Management confirmed that the FirstVu Pro and associated docking stations are being successfully deployed, with the subscription model proving effective for various sectors, including sports teams and cruise lines [16][17][18]

Financial Performance - Total net revenues for the six months ended June 30, 2024, were $11,145,586, a decrease of 30.5% compared to $15,976,820 for the same period in 2023[170]. - Total revenue for Q2 2024 was $5,616,235, a decrease of $2,663,397 (32%) compared to $8,279,632 in Q2 2023[184]. - Total revenues for the six months ended June 30, 2024, were $11,145,586, a decrease of $4,831,234 (30%) from $15,976,820 in 2023[219]. - Total identifiable assets as of June 30, 2024, were $43,327,215, a decrease from $47,028,809 as of December 31, 2023[170]. Segment Performance - Video Solutions segment revenue decreased to $3,303,963 in the first half of 2024, down 13.1% from $3,798,953 in the first half of 2023[170]. - Revenue Cycle Management segment revenue fell to $2,998,952, a decline of 14.5% from $3,506,361 in the prior year[170]. - Entertainment segment revenue dropped significantly to $4,842,671, down 44.5% from $8,671,506 in the same period last year[170]. - The entertainment operating segment generated $2,431,320 in product revenues for the six months ended June 30, 2024, down from $3,189,847 in 2023, attributed to the first Country Stampede music festival and ticket resale activities[213]. - Video solutions operating segment revenues totaled $1,342,127 for the six months ended June 30, 2024, compared to $2,341,622 in 2023, impacted by increased competition and price-cutting[214]. Profitability and Loss - Total gross profit for the first half of 2024 was $1,763,830, a decrease of 58.8% compared to $4,281,829 in the first half of 2023[170]. - Overall gross profit decreased by $2,517,999 (59%) to $1,763,830 for the six months ended June 30, 2024, from $4,281,829 in 2023[225]. - Operating loss for Q2 2024 was $(3,914,221), representing an operating loss margin of (69.7)%, compared to (59.7)% in Q2 2023[174]. - The Company reported a net loss attributable to common stockholders of $5,083,861 for the three months ended June 30, 2024, an improvement of $3,309,443 (39%) from $8,393,304 in 2023[209]. - The net loss attributable to common stockholders for the six months ended June 30, 2024, was $3.12 per share, improved from a loss of $5.24 per share in 2023[211]. Expenses - Selling, general and administrative expenses decreased by $6,078,317 (39%) to $9,317,023 for the six months ended June 30, 2024, compared to $15,395,340 in 2023[227]. - Research and development expenses totaled $545,776 for the three months ended June 30, 2024, slightly up from $540,276 in 2023[193]. - Selling, advertising, and promotional expenses decreased by $1,357,719 (65%) to $728,906 for the three months ended June 30, 2024, compared to $2,104,625 in 2023[194]. - Interest expenses decreased to $1,085,063 for the three months ended June 30, 2024, from $1,515,509 in 2023[198]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash totaled $614,713 as of June 30, 2024, a decrease from $778,149 at December 31, 2023[247]. - Net cash used in operating activities increased by $298,771 to $3,408,757 for the six months ended June 30, 2024, compared to $3,109,986 in 2023[247]. - Cash provided by financing activities increased to $3,208,817 for the six months ended June 30, 2024, from $2,628,614 in 2023[249]. Inventory and Reserves - The reserve for excess and obsolete inventory represented 65% of the gross inventory balance at June 30, 2024, up from 54% at December 31, 2023[269]. - Total inventories decreased to $2,218,133 as of June 30, 2024, from $3,845,281 at December 31, 2023, reflecting a reduction of 42%[269]. - The Company had $4,135,001 in reserves for obsolete and excess inventories as of June 30, 2024[269]. Debt and Obligations - Outstanding debt obligations increased to $7,879,321 as of June 30, 2024, compared to $6,113,750 as of December 31, 2023[255]. Internal Controls and Compliance - The Company concluded that its disclosure controls and procedures were not effective as of June 30, 2024, requiring a full review and implementation of new controls[295]. - There have been no changes in the Company's internal control over financial reporting that materially affected its internal control during the last fiscal quarter[297]. Other Information - Inflation has not materially affected the Company during the past fiscal year, and the Entertainment Segment is expected to generate higher revenues in the second half of the calendar year[293]. - The most recent annual impairment test of goodwill indicated no impairment as of December 31, 2023[278].

Financial Performance - Overall gross profits for Q2 2024 were $242,392, a decrease of $2,494,648, or 91%, compared to $2,737,040 in Q2 2023[1] - Total revenues decreased to $5,616,235 in Q2 2024 from $8,279,632 in Q2 2023, a decline of $2,663,397, or 32%[2] - Revenue from the entertainment segment fell by $2,189,059, or 47%, to $2,466,211 in Q2 2024 compared to $4,655,270 in Q2 2023[3] - Service revenues from the revenue cycle management segment decreased by $160,418, or 9%, to $1,564,354 in Q2 2024 from $1,724,772 in Q2 2023[4] - Total revenue for the six months ended June 30, 2024, was $11,145,586, a decrease of 30.5% compared to $15,976,820 for the same period in 2023[21] - Gross profit for the six months ended June 30, 2024, was $1,763,830, down 58.8% from $4,281,829 in the prior year[21] - Operating loss for the six months ended June 30, 2024, was $(7,553,193), compared to $(11,113,511) for the same period in 2023, reflecting an improvement of 32.5%[21] - Net loss attributable to common stockholders for the six months ended June 30, 2024, was $(9,014,882), a decrease of 37.5% from $(14,499,122) in 2023[21] Expenses and Liabilities - Selling, general and administrative expenses were $4,156,613 in Q2 2024, down $3,521,131, or 46%, from $7,677,744 in Q2 2023[5] - Selling, general and administrative expenses totaled $9,317,023 for the six months ended June 30, 2024, down 39.5% from $15,395,340 in 2023[21] - Total current assets decreased to $14,244,761 as of June 30, 2024, from $15,584,494 at the end of 2023, a decline of 8.6%[20] - Total liabilities increased to $40,277,022 as of June 30, 2024, compared to $35,580,414 at the end of 2023, an increase of 13.8%[20] - Cash and cash equivalents decreased to $517,113 as of June 30, 2024, from $680,549 at the end of 2023, a decline of 24.0%[20] - Accounts payable increased to $11,501,822 as of June 30, 2024, compared to $10,732,089 at the end of 2023, an increase of 7.2%[20] - Research and development expenses for the six months ended June 30, 2024, were $1,033,242, a decrease of 30.0% from $1,475,215 in the prior year[21] Strategic Initiatives - The company completed the acquisition of assets related to the Country Stampede music event on March 1, 2024[5] - The proposed business combination with Clover Leaf Capital Corp. aims to create Kustom Entertainment, focusing on events and ticketing technologies[11] - The proposed Business Combination between Clover Leaf and Kustom Entertainment is subject to various business risks and uncertainties, including recent losses in fiscal years 2023 and 2022[15] - The company aims to increase revenues and return to consistent profitability in the current economic environment, facing challenges such as competition and market acceptance of new products[15] - Kustom Entertainment's ability to deliver new product offerings as scheduled in 2024 is critical for revenue growth, with performance expectations tied to market demand[15] - The company is focused on expanding its market share both domestically and internationally, with an emphasis on increasing international revenues[15] - The company emphasizes the importance of maintaining its brand reputation and relationships with key stakeholders to ensure ongoing business success[16] Risks and Challenges - Significant risks include reliance on government funding for law enforcement agencies, which may affect operational budgets and revenue generation[15] - The company acknowledges the potential impact of external factors such as economic downturns, pandemics, and changes in consumer behavior on its business performance[16] - Kustom Entertainment's operations are seasonal, leading to variability in financial performance across different quarters and years[16] - The company may need to raise additional capital to execute its business plan, which could be challenging under current market conditions[16] - The completion of the Business Combination is contingent upon various regulatory approvals and shareholder votes, which introduces uncertainty regarding timing and execution[17] Operational Improvements - Operating losses improved by $1,026,483, or 21%, to $3,914,221 in Q2 2024 from $4,940,704 in Q2 2023[13] - The company plans to enhance margins through improved supply chain management and increased efficiency in manufacturing[1] - Deferred revenue reached $10.1 million at June 30, 2024, an increase of approximately $0.6 million from $9.5 million at June 30, 2023[11]