Digital Ally(US:DGLY)2024-05-20 20:30Financial Performance - Overall gross profits for Q1 2024 were $1,523,699, a slight decrease of $21,093 (1%) compared to $1,544,792 in Q1 2023[2] - Total revenues decreased by $2,167,839 (28%) to $5,529,351 in Q1 2024 from $7,697,190 in Q1 2023[2] - Service revenues in the entertainment segment fell by $1,223,646 (44%) in Q1 2024 compared to Q1 2023, contributing to the overall revenue decline[2] - The entertainment segment generated revenues of $2,376,460 in Q1 2024, a decrease of $1,639,776 (41%) compared to $4,016,236 in Q1 2023[2] - The revenue cycle management segment's gross profits decreased by $312,203 (40%) to $463,731 in Q1 2024 from $775,934 in Q1 2023[7] - Total revenue for the three months ended March 31, 2024, was $5,529,351, a decrease of 28.2% compared to $7,697,190 for the same period in 2023[22] - Gross profit for the quarter was $1,523,699, slightly down from $1,544,792 in the previous year, reflecting a gross margin of approximately 27.6%[23] - Operating loss for the quarter was $(3,639,034), an improvement from $(6,172,806) in the same quarter last year[23] - Net loss attributable to common stockholders was $(3,931,020), compared to $(6,105,818) for the same period in 2023, indicating a reduction in losses[23] - The company reported a basic net loss per share of $(1.37) for the quarter, an improvement from $(2.22) in the same period last year[23] Expenses and Liabilities - Selling, general and administrative expenses decreased by $2,554,865 (33%) to $5,162,733 in Q1 2024 from $7,717,598 in Q1 2023[4] - Research and development expenses for the quarter were $487,466, down 47.9% from $934,939 in the same quarter last year[23] - Total current liabilities rose to $24,697,173, up from $22,548,437 at the end of 2023, marking an increase of 9.5%[20] Cash and Assets - Cash and cash equivalents increased to $927,861 as of March 31, 2024, from $680,549 at the end of 2023, representing a growth of 36.3%[20] - Total assets decreased to $45,164,195 from $47,028,809 at the end of 2023, a decline of 4.0%[20] Business Developments - Kustom Entertainment and Clover Leaf are progressing towards a business combination, with a focus on producing events and enhancing ticketing technologies[3] - The proposed Business Combination between Clover Leaf and Kustom Entertainment is expected to provide significant benefits, although actual results may differ due to various risks and uncertainties[13] - Clover Leaf reported losses in fiscal years 2023 and 2022, raising concerns about its ability to achieve consistent profitability in the current economic environment[13] - The company aims to increase revenues and margins while expanding its market share both domestically and internationally, particularly in developing markets[13] - Kustom Entertainment's ability to deliver new product offerings as scheduled in 2024 is critical for revenue growth, with performance expectations tied to market acceptance[13] Risks and Challenges - The company faces competition from larger, established firms, which may impact its market position and profitability[13] - Risks related to funding from government sources for law enforcement agencies could affect sales and revenue generation[13] - The seasonal nature of Kustom Entertainment's operations may lead to fluctuations in financial performance across different quarters[14] - The company is dependent on key personnel and third-party distributors, which poses risks to its operational stability[14] - The completion of the Business Combination is subject to various conditions, including stockholder approval and regulatory approvals, which may delay or prevent the transaction[15] - The potential for extraordinary events, such as pandemics or natural disasters, could adversely affect Kustom Entertainment's business and financial results[14]