Digital Ally, Inc.

Good morning, ladies and gentlemen, and welcome to the Digital Ally Second Quarter Earnings Conference Call. At this time, all lines are in a listen-only mode. Following presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press dial 0 for the operator. This call is being recorded on August 19, 2024. This conference call may contain forelooking statements. within the meeting of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We may use words and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters, rather, they represent forelooking statements. These forward-looking statements are based largely on our expectations or forecast of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results could affirmatively from the forward-looking statements expressed in this conference call, and readers are cautioned not to place undue reliance on such forward-looking statements. We generally do not publicly update or revise any forward-looking statements expressed in this conference call, whether as a result of new information, future events, or otherwise. There can be no assurance that forward-looking statements contained in this document will, in fact, transfer or prove to be accurate. I will now like to turn the conference over to Stan Russ. CEO, please go ahead.

Thank you. Thanks, everybody, for joining us today. With me is Brody Green, the company's president. He'll do a high-level overview of our numbers, and then we'll start getting into answering a lot of the e-mails and text messages we've had over the last several weeks concerning the status of the merger of Custom Entertainment with Cloverleaf Group. And so a lot's happened on that that we'd like to share with you and some timing issues concerning the first round of dividends and then the second round of stock dividends as well. And maybe give you just some insight on an associated value that this entails in regards to Digital Ally and its shareholders. So with that being said, I will pass the call over to Brody.

Thanks, Dan. Like you said, I'll just do a brief overview of the financials. Greater detail will be in the form 10Q up on the SEC's website. Feel free to take a deep dive in there just for further details. I think the more pressing conversation is going to be regarding the business combination, so we'll get to that as soon as we can. So the current assets of the company at June 30th, 2024 were $14.2 million, down about $1.3 from year end. Similarly, with total assets, that was at $43.3 million compared to $47 million on December 31st. Total current liabilities bumped up to $27.6 million on the Chunk of that is about a little less than $4 million attributable to the warrant derivative liabilities, which is just the Black-Scholes value of the warrants, some from earlier transactions and some from the June 25th transaction as well. That's a non-cash liability, but nonetheless liability on the books. Total liabilities is $40.3 million. Now, you can see our contract liabilities sitting on the balance sheet. We're $3.1 million in this current portion and about $7 million for long-term. That's our deferred revenue for our three and five-year contracts. So those are really going to find their way up to the P&L as those mature and come due. Total stockholders' equity at the end of Q2 was a little over $3 million. So that wraps up the balance sheet. Again, further details you'll find on the Q. And then for the P&L side, our total revenue for the quarter was $5.6 million with a total gross profit of $242,000. We had an operating loss of $3.9 million. with a net loss of $5 million, and then a net loss per share of $1.74. And then our current, at the end of Q2, our current shares outstanding were $3.5 million. I think that's really a summary. One good thing to call out is our deferred revenue continues to grow. I think it's up to, it's a little over 10 and a half million at this point, I believe. So again, continuing to grow quarter over quarter, and it'll continue to be recognized in the quarter in which it's renewed. So let's continue to grow and hit the P&L just every year moving forward. And as that balance increases, that's pretty much the goal of what we're trying to do with the subscription model. So it continues to work. And I know we had a few big events this quarter on the, uh, entertainment side as well with them having their festival at the end of June. And I'll let Stan touch on that along with a few other items. So I'll turn it back over to Stan.