LENEXA, KS - Digital Ally , Inc. (NASDAQ: NASDAQ:DGLY), a company specializing in video recording and safety products for law enforcement and other markets, today announced the terms of a forthcoming private placement. The company expects to raise approximately $2.9 million in gross proceeds before accounting for placement agent fees and other related expenses.
The placement, aimed at certain institutional investors, involves the sale of 1,195,219 units at a price of $2.51 each. Each unit consists of a share of common stock or a pre-funded warrant, along with a Series A warrant and a Series B warrant, both exercisable under certain conditions. Series A warrants have an exercise price of $2.51 and a five-year term, while Series B warrants are exercisable at $0.001 and will be determined on a specified Reset Date.
The company plans to allocate the net proceeds from this private placement towards inventory purchases, artist costs for upcoming festivals, transaction costs, expanded sales, marketing efforts, and general working capital requirements.
The closing of the private placement is anticipated to occur around June 25, 2024, subject to customary closing conditions. Aegis Capital Corp. has been appointed as the Exclusive Placement Agent for the transaction.
Digital Ally has also committed to filing one or more registration statements with the SEC to cover the resale of the common stock and the common stock issuable upon the exercise of the pre-funded warrants and warrants included in the private placement.
The securities offered in the private placement are exempt from the registration requirements of the Securities Act of 1933, as amended, and will not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This announcement of the private placement terms is based on a press release statement from Digital Ally. It is not an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Digital Ally, Inc. reported a mixed bag of financial results for the fiscal year 2023. The company saw a significant increase in gross profits, reaching $5,762,484, marking a 148% increase from the previous year. However, total revenues experienced a 24% decrease, falling to $28,248,344 from $37,009,895 in 2022, primarily due to a decline in service revenues from the entertainment operating segment.
In a separate development, Digital Ally announced a multi-year agreement with the Kansas City Chiefs to provide advanced security technology at GEHA Field at Arrowhead Stadium. This agreement includes the deployment of 120 FirstVu PRO body cameras and two QuickVu 24-bay docking stations, integrated with Digital Ally's EVO Web cloud platform.
The company also revealed a merger agreement with Clover Leaf Capital Corp. The common stock of the combined company is expected to be listed on Nasdaq under a new ticker symbol. These are among the recent developments for Digital Ally, as it navigates through significant changes in its financial performance and strategic partnerships.
InvestingPro Insights
In light of Digital Ally's recent announcement regarding its private placement, it's pertinent to consider the company's financial health and market performance. InvestingPro data reveals that Digital Ally is currently operating with a market cap of approximately $6.97 million USD, indicating a relatively small capitalization in the market. Furthermore, the company's Price / Book ratio as of the last twelve months ending Q1 2024 stands at 1.05, suggesting that the market values the company near its book value.
However, the financial data also exposes some challenges. Digital Ally's revenue has seen a decline, with a -24.21% change over the last twelve months as of Q1 2024. This is aligned with a -28.16% revenue growth in Q1 2024 compared to the previous quarter, which could be a point of concern for potential investors. Moreover, the company's operating income margin during this period was significantly negative at -75.56%, indicating that expenses far exceed the gross income.
InvestingPro Tips for Digital Ally highlight critical aspects that investors should be aware of. The company is currently not profitable, with no dividends being paid to shareholders. Additionally, it operates with a significant debt burden and is quickly burning through cash, which could impact its ability to sustain operations over the long term. It's also worth noting that the stock has experienced a notable decline over the past week and month, with a -13.75% and -14.63% price total return respectively.
For those interested in a deeper analysis, InvestingPro offers additional tips on Digital Ally. Investors can find comprehensive insights, including the company's cash flow yield and short-term liquidity concerns, by visiting https://www.investing.com/pro/DGLY. Moreover, there are 6 more InvestingPro Tips available that could further inform investment decisions. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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