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Digital Ally(DGLY) - 2024 Q2 - Quarterly Results
DGLYDigital Ally(DGLY)2024-08-16 21:20

Financial Performance - Overall gross profits for Q2 2024 were 242,392,adecreaseof242,392, a decrease of 2,494,648, or 91%, compared to 2,737,040inQ22023[1]−Totalrevenuesdecreasedto2,737,040 in Q2 2023[1] - Total revenues decreased to 5,616,235 in Q2 2024 from 8,279,632inQ22023,adeclineof8,279,632 in Q2 2023, a decline of 2,663,397, or 32%[2] - Revenue from the entertainment segment fell by 2,189,059,or472,189,059, or 47%, to 2,466,211 in Q2 2024 compared to 4,655,270inQ22023[3]−Servicerevenuesfromtherevenuecyclemanagementsegmentdecreasedby4,655,270 in Q2 2023[3] - Service revenues from the revenue cycle management segment decreased by 160,418, or 9%, to 1,564,354inQ22024from1,564,354 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,adecreaseof30.511,145,586, 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,down58.81,763,830, 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),comparedto(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),adecreaseof37.5(9,014,882), a decrease of 37.5% from (14,499,122) in 2023[21] Expenses and Liabilities - Selling, general and administrative expenses were 4,156,613inQ22024,down4,156,613 in Q2 2024, down 3,521,131, or 46%, from 7,677,744inQ22023[5]−Selling,generalandadministrativeexpensestotaled7,677,744 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 15,395,340in2023[21]−Totalcurrentassetsdecreasedto15,395,340 in 2023[21] - Total current assets decreased to 14,244,761 as of June 30, 2024, from 15,584,494attheendof2023,adeclineof8.615,584,494 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 35,580,414attheendof2023,anincreaseof13.835,580,414 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 680,549attheendof2023,adeclineof24.0680,549 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 10,732,089attheendof2023,anincreaseof7.210,732,089 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 1,475,215intheprioryear[21]StrategicInitiatives−ThecompanycompletedtheacquisitionofassetsrelatedtotheCountryStampedemusiceventonMarch1,2024[5]−TheproposedbusinesscombinationwithCloverLeafCapitalCorp.aimstocreateKustomEntertainment,focusingoneventsandticketingtechnologies[11]−TheproposedBusinessCombinationbetweenCloverLeafandKustomEntertainmentissubjecttovariousbusinessrisksanduncertainties,includingrecentlossesinfiscalyears2023and2022[15]−Thecompanyaimstoincreaserevenuesandreturntoconsistentprofitabilityinthecurrenteconomicenvironment,facingchallengessuchascompetitionandmarketacceptanceofnewproducts[15]−KustomEntertainment′sabilitytodelivernewproductofferingsasscheduledin2024iscriticalforrevenuegrowth,withperformanceexpectationstiedtomarketdemand[15]−Thecompanyisfocusedonexpandingitsmarketsharebothdomesticallyandinternationally,withanemphasisonincreasinginternationalrevenues[15]−Thecompanyemphasizestheimportanceofmaintainingitsbrandreputationandrelationshipswithkeystakeholderstoensureongoingbusinesssuccess[16]RisksandChallenges−Significantrisksincluderelianceongovernmentfundingforlawenforcementagencies,whichmayaffectoperationalbudgetsandrevenuegeneration[15]−Thecompanyacknowledgesthepotentialimpactofexternalfactorssuchaseconomicdownturns,pandemics,andchangesinconsumerbehavioronitsbusinessperformance[16]−KustomEntertainment′soperationsareseasonal,leadingtovariabilityinfinancialperformanceacrossdifferentquartersandyears[16]−Thecompanymayneedtoraiseadditionalcapitaltoexecuteitsbusinessplan,whichcouldbechallengingundercurrentmarketconditions[16]−ThecompletionoftheBusinessCombinationiscontingentuponvariousregulatoryapprovalsandshareholdervotes,whichintroducesuncertaintyregardingtimingandexecution[17]OperationalImprovements−Operatinglossesimprovedby1,475,215 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 3,914,221inQ22024from3,914,221 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 10.1millionatJune30,2024,anincreaseofapproximately10.1 million at June 30, 2024, an increase of approximately 0.6 million from $9.5 million at June 30, 2023[11]