Digital Ally Inc SEC Filings

Kustom Entertainment, Inc., formerly Digital Ally, Inc., reported that it completed a 1-for-3 reverse stock split of its common stock effective January 8, 2026. Every three pre-split shares were combined into one post-split share, reducing outstanding common shares from 2,402,498 to 801,006, with any fractional shares rounded up to the nearest whole share. The split became effective at 12:01 a.m. Eastern Time, and the stock began trading on Nasdaq on a split-adjusted basis the same day, with a new CUSIP number 25382T 507.

The company also changed its corporate name from Digital Ally, Inc. to Kustom Entertainment, Inc., effective January 8, 2026, and updated its Nasdaq trading symbol from “DGLY” to “KUST”. The board amended the company’s bylaws solely to reflect the new name, without requiring stockholder approval. The name and symbol changes do not affect stockholder rights, and no action is required from stockholders.

Digital Ally, Inc. completed a subsequent closing of its senior secured convertible note financing, issuing notes with an aggregate original principal of $267,500 for gross proceeds of $250,000 and attached warrants for 147,128 common shares at an exercise price of $2.124 per share. The notes bear 8% interest, include a 7% original issue discount, are convertible at a 10% discount to the five-day volume-weighted average price before the initial closing, and may be redeemed at 110% of outstanding principal, and are secured by substantially all company assets and guaranteed by most subsidiaries. At its annual meeting, stockholders elected four directors, ratified the auditor, approved transactions that may involve issuing 20% or more of outstanding common stock under prior financing agreements and an equity line, increased the 2022 equity plan reserve by 375,000 shares, and supported annual advisory votes on executive compensation.

Digital Ally, Inc. is registering up to 71,527,777 shares of common stock for resale by Yield Point NY LLC under a committed equity financing facility. These are secondary shares, and the company will not receive proceeds from their resale.

Under a Common Stock Purchase Agreement, Digital Ally may sell shares to the investor over time at a purchase price equal to 92% of the lowest daily trade price during a three-day valuation period, for up to $25,000,000 in aggregate gross proceeds, subject to a 9.99% beneficial ownership cap. After this offering, there would be 73,462,213 shares outstanding, excluding existing options and warrants.

The filing highlights two reverse stock splits completed in May 2025, significant accumulated losses, and an auditor “going concern” paragraph, as well as risks of dilution, stock price volatility, penny stock rules, and dependence on key personnel and suppliers.

Digital Ally, Inc. is registering up to 71,527,777 shares of common stock for resale by Yield Point NY LLC under a committed equity financing facility. The shares relate to a Common Stock Purchase Agreement that allows the investor, at the company’s direction, to buy up to $25,000,000 of common stock, subject to conditions and a 9.99% beneficial ownership cap. Digital Ally will not receive any proceeds from the resale of these shares, though it may receive proceeds when it sells shares directly to the investor under the purchase agreement.

The company has effected two large reverse stock splits in May 2025, and reports that 73,462,213 shares of common stock would be outstanding after completion of this offering, compared with 1,898,436 shares outstanding as of November 21, 2025. Digital Ally operates three segments: video solutions, revenue cycle management, and entertainment. It has incurred significant losses, including an operating loss of approximately $15.2 million in 2024 and an accumulated deficit of $137.5 million, and its auditor has raised substantial doubt about its ability to continue as a going concern.

Digital Ally, Inc. has filed a Form S-1 to register up to 3,397,186 shares of common stock for resale by a single selling stockholder, consisting of 2,777,777 shares underlying a senior secured convertible note and 619,409 shares underlying a common stock purchase warrant issued under a September 15, 2025 Securities Purchase Agreement. These are secondary sales; the company will not receive proceeds from the resale of these shares.

The notes are secured by a first-priority lien on substantially all debtor assets (with a second priority on TicketSmarter, Inc.) and include a 9.99% beneficial ownership cap on conversions and warrant exercises. The company reports 5,295,622 shares of common stock outstanding after this offering and received approximately $610,000 of net proceeds from related primary issuances, largely for working capital and general corporate purposes.

Digital Ally highlights substantial recent losses, an accumulated deficit, and an auditor going-concern explanatory paragraph, as well as significant reverse stock splits completed in May 2025. Its stock trades on Nasdaq under the symbol DGLY, with a last reported price of $1.24 per share on November 21, 2025.

Digital Ally, Inc. (DGLY) is asking stockholders to approve several significant items at its December 19, 2025 annual meeting. Stockholders will vote to elect four directors, ratify Victor Mokuolu CPA PLLC as auditor, and address multiple capital-raising and compensation proposals.

Two key proposals seek approval to issue 20% or more of the company’s common stock in connection with a September 15, 2025 senior secured convertible note and warrant financing, and a separate equity line of credit under a Common Stock Purchase Agreement and its November 7, 2025 amendment. Another proposal would amend the 2022 Stock Option and Restricted Stock Plan to increase shares reserved under the plan by 375,000 shares of common stock.

Stockholders will also vote on advisory resolutions on executive compensation and on how often to hold future say-on-pay votes, while the Board recommends voting in favor of all management proposals and supports an advisory vote on executive pay every three years.

Digital Ally, Inc. filed an 8-K/A to add Item 3.02 and disclose a First Amendment to its Common Stock Purchase Agreement with an investor. The amendment provides that the commitment fee will be paid partly in Commitment Shares equal to 19.99% of the common shares outstanding on the Purchase Agreement’s execution date, with the value per share based on the 5-day VWAP ending on the 10th trading day after the later of stockholder approval or the effectiveness of the resale registration statement, capped at the full commitment fee and subject to a Beneficial Ownership Limitation.

The remaining portion of the commitment fee will be paid in cash using 30% of proceeds from subsequent financings, including the Purchase Agreement. The Commitment Shares were issued as unregistered securities in reliance on Section 4(a)(2) and Rule 506 of Regulation D, with restrictive legends and no general solicitation.

Digital Ally, Inc. filed a current report stating that on November 12, 2025 it issued a press release titled “Digital Ally, Inc. Announces Third Quarter Operating Results.” The press release, attached as Exhibit 99.1, provides details on the company’s third quarter operating performance and financial condition.

The company notes that the information in this report and the press release is being furnished, not filed, under securities laws, which affects how it may be used in other regulatory filings. The report also highlights that the press release contains forward-looking statements along with cautionary language about factors that could cause actual results to differ from expectations.