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]

KANSAS CITY, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (Nasdaq: DGLY) – Kustom Entertainment, Inc. ("Kustom Entertainment"), a premier live event marketing and concert production company and current subsidiary of Digital Ally Inc. ("Digital Ally"), today announced that Clover Leaf Capital Corp.'s ("Clover Leaf") registration statement on Form S-4 has been declared effective by the U.S. Securities and Exchange Commission (the "SEC") as of Tuesday, July 30, 2024, relating to the previously announce ...

KANSAS CITY, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (Nasdaq: DGLY) – Kustom Entertainment, Inc. ("Kustom Entertainment"), a premier live event marketing and concert production company and current subsidiary of Digital Ally Inc. ("Digital Ally"), today announced that Clover Leaf Capital Corp.'s ("Clover Leaf") registration statement on Form S-4 has been declared effective by the U.S. Securities and Exchange Commission (the "SEC") as of Tuesday, July 30, 2024, relating to the previously announce ...

Lenexa, Kansas, June 25, 2024 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (NASDAQ: DGLY) (the "Company"), a leading provider of video solutions which develops, manufactures, and markets advanced video recording products and other critical safety products for law enforcement, emergency management, fleet safety and event security, today announced the closing of a private placement with certain institutional investors. The aggregate gross cash proceeds were approximately $2.9 million, before deducting fees to the p ...

Lenexa, Kansas, June 25, 2024 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (NASDAQ: DGLY) (the "Company"), a leading provider of video solutions which develops, manufactures, and markets advanced video recording products and other critical safety products for law enforcement, emergency management, fleet safety and event security, today announced the closing of a private placement with certain institutional investors. The aggregate gross cash proceeds were approximately $2.9 million, before deducting fees to the p ...

Lenexa, Kansas, June 24, 2024 (GLOBE NEWSWIRE) -- Digital Ally, Inc. (NASDAQ:DGLY) (the "Company"), a leading provider of video solutions which develops, manufactures, and markets advanced video recording products and other critical safety products for law enforcement, emergency management, fleet safety and event security, today announced the pricing of a private placement with certain institutional investors. The aggregate gross cash proceeds are expected to be approximately $2.9 million, before deducting ...