Digital Ally Q1 Loss Widens on Lower Revenue
Ticker: KUST · Form: 10-Q · Filed: May 17, 2024 · CIK: 1342958
Sentiment: bearish
Topics: earnings, revenue-decline, net-loss
TL;DR
Digital Ally Q1 revenue down to $3.2M, net loss up to $2.1M. Ouch.
AI Summary
Digital Ally, Inc. filed its quarterly report for the period ending March 31, 2024. The company reported revenue of $3.2 million for the first quarter of 2024, a decrease from $3.6 million in the same period of 2023. Net loss widened to $2.1 million from $1.5 million year-over-year.
Why It Matters
The widening net loss and declining revenue indicate potential financial challenges for Digital Ally, which could impact its ability to fund operations and future growth initiatives.
Risk Assessment
Risk Level: medium — The company's widening net loss and declining revenue suggest potential financial instability and operational challenges.
Key Numbers
- $3.2M — Q1 2024 Revenue (Represents a decrease compared to the prior year's Q1 revenue.)
- $2.1M — Q1 2024 Net Loss (Indicates a worsening financial performance compared to the prior year's Q1 net loss.)
Key Players & Entities
- Digital Ally, Inc. (company) — Filer of the 10-Q report
- 20240331 (date) — End of the reporting period
- $3.2 million (dollar_amount) — Revenue for Q1 2024
- $3.6 million (dollar_amount) — Revenue for Q1 2023
- $2.1 million (dollar_amount) — Net loss for Q1 2024
- $1.5 million (dollar_amount) — Net loss for Q1 2023
FAQ
What was Digital Ally's total revenue for the first quarter of 2024?
Digital Ally reported total revenue of $3.2 million for the first quarter of 2024.
How did the net loss in Q1 2024 compare to Q1 2023?
The net loss for Q1 2024 was $2.1 million, which is wider than the $1.5 million net loss reported for Q1 2023.
What is the reporting period for this 10-Q filing?
The reporting period for this 10-Q filing is the quarter ended March 31, 2024.
What was the company's revenue in the same period last year (Q1 2023)?
The company's revenue for the first quarter of 2023 was $3.6 million.
Where is Digital Ally, Inc. headquartered?
Digital Ally, Inc. is headquartered in Lenexa, Kansas.
Filing Stats: 4,390 words · 18 min read · ~15 pages · Grade level 15.8 · Accepted 2024-05-17 16:55:44
Key Financial Figures
- $0.001 — nge on which registered Common stock, $0.001 par value per share DGLY The Nasdaq
Filing Documents
- form10-q.htm (10-Q) — 1384KB
- ex31-1.htm (EX-31.1) — 22KB
- ex31-2.htm (EX-31.2) — 22KB
- ex32-1.htm (EX-32.1) — 9KB
- ex32-2.htm (EX-32.2) — 9KB
- 0001493152-24-020464.txt ( ) — 8586KB
- dgly-20240331.xsd (EX-101.SCH) — 81KB
- dgly-20240331_cal.xml (EX-101.CAL) — 102KB
- dgly-20240331_def.xml (EX-101.DEF) — 290KB
- dgly-20240331_lab.xml (EX-101.LAB) — 583KB
- dgly-20240331_pre.xml (EX-101.PRE) — 443KB
- form10-q_htm.xml (XML) — 1350KB
– FINANCIAL INFORMATION
PART I – FINANCIAL INFORMATION
Financial Statements
Item 1. Financial Statements. Condensed Consolidated Balance Sheets – March 31, 2024 (Unaudited) and December 31, 2023 3 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 4 Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited) 6 Notes to the Condensed Consolidated Financial Statements (Unaudited) 7-35
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 36-53
Quantitative and Qualitative Disclosures About Market Risk
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 54
Controls and Procedures
Item 4. Controls and Procedures. 54
- OTHER INFORMATION
PART II - OTHER INFORMATION
Legal Proceedings
Item 1. Legal Proceedings. 54
Risk Factors
Item 1A. Risk Factors. 55
Unregistered Sales of Equity Securities and Use of Proceeds
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 55
Defaults Upon Senior Securities
Item 3. Defaults Upon Senior Securities 55
Mine Safety Disclosures
Item 4. Mine Safety Disclosures 55
Other Information
Item 5. Other Information. 55
Exhibits
Item 6. Exhibits. 55
SIGNATURES
SIGNATURES 56 2 PART I – FINANCIAL INFORMATION Item 1 – Financial Statements. DIGITAL ALLY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2024 AND DECEMBER 31, 2023 March 31, 2024 (Unaudited) December 31, 2023 Assets Current assets: Cash and cash equivalents $ 927,861 $ 680,549 Accounts receivable – trade, net of $ 234,727 allowance – March 31, 2024 and $ 200,668 – December 31, 2023 1,207,752 1,584,662 Other receivables, net of $ 25,000 allowance – March 31, 2024 and $ 5,000 – December 31, 2023 3,213,740 3,107,634 Inventories, net 3,148,689 3,845,281 Prepaid expenses 6,575,013 6,366,368 Total current assets 15,073,055 15,584,494 Property, plant, and equipment, net 6,207,795 7,283,702 Goodwill and other intangible assets, net 16,625,032 16,510,422 Operating lease right of use assets, net 925,128 1,053,159 Other assets 6,333,185 6,597,032 Total assets $ 45,164,195 $ 47,028,809 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 11,212,697 $ 10,732,089 Accrued expenses 3,137,144 3,269,330 Current portion of operating lease obligations 225,960 279,538 Contract liabilities – current portion 3,299,714 2,937,168 Notes payable – related party – current portion 2,700,000 2,700,000 Debt obligations – current portion 2,403,029 1,260,513 Warrant derivative liabilities 1,718,629 1,369,738 Income taxes payable — 61 Total current liabilities 24,697,173 22,548,437 Long-term liabilities: Debt obligations – long term 4,875,831 4,853,237 Operating lease obligation – long term 749,718 827,836 Contract liabilities – long term 7,285,206 7,340,459 Lease Deposit 10,445 10,445 Total liabilities 37,618,373 35,580,414 Commitments and contingencies - - Stockholders' Equity: Common stock, $ 0.001 par value per share; 200,000,000 shares authorized; shares issued: 2,879,826 shares issued – March 31, 2024 and 2,800,754 shares issued
Business
Business Combination In June 2023, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement") with Clover Leaf Capital Corp., a Delaware corporation (Nasdaq: CLOE) ("Clover Leaf"), CL Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Clover Leaf ("Merger Sub"), Yntegra Capital Investments LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of Clover Leaf in accordance with the terms and conditions of the Merger Agreement, and Kustom Entertainment, Inc., a Nevada corporation, a wholly owned subsidiary of the Company, with a focus and mission to own and produce events, festivals, and entertainment alongside its evolving primary and secondary ticketing technologies ("Kustom"). Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the "Closing"), Merger Sub will merge with and into Kustom, with Kustom continuing as the surviving corporation in the Merger and a wholly owned subsidiary of Clover Leaf. Upon the Closing which is subject to the approval of Clover Leaf's shareholders and the satisfaction or waiver of certain other customary closing conditions, the common stock of the combined company is expected to be listed on the Nasdaq under a mutually agreed new ticker symbol that reflects the name "Kustom Entertainment". Basis of Presentation : The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinio