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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 4, 2023
DIGITAL
ALLY, INC.
(Exact
Name of Registrant as Specified in Charter)
Nevada |
|
001-33899 |
|
20-0064269 |
(State
or other Jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
Incorporation) |
|
File
Number) |
|
Identification
No.) |
14001
Marshall Drive, Lenexa, KS 66215
(Address
of Principal Executive Offices) (Zip Code)
(913)
814-7774
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of exchange on which registered |
Common
stock, $0.001 par value |
|
DGLY |
|
The
Nasdaq Capital Market LLC |
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☒ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
8.01 Other Events.
On
October 4, 2023, Digital Ally, Inc.’s wholly-owned subsidiary, Kustom Entertainment, Inc. (“Kustom Entertainment”),
issued a press release (the “Press Release”) announcing the filing of a registration statement on Form S-4 with the
U.S. Securities and Exchange Commission, which contains a preliminary proxy statement and prospectus in connection with the proposed
business combination, announced June 2, 2023, with Clover Leaf Capital Corp. (SPAC). A copy of the Press Release is attached hereto as
Exhibit 99.1 and incorporated by reference herein.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
October 4, 2023
|
Digital
Ally, Inc. |
|
|
|
|
By: |
/s/
Stanton E. Ross |
|
Name: |
Stanton
E. Ross |
|
Title: |
Chairman
and Chief Executive Officer |
Exhibit 99.1
Kustom
Entertainment, Inc. and Clover Leaf Capital Corp. Announce Filing of SEC Registration Statement
KANSAS
CITY, KS and MIAMI, FL, October 4, 2023 -- Digital Ally, Inc. (Nasdaq: DGLY) (“Digital Ally”) and Clover Leaf
Capital Corp. (Nasdaq: CLOE) (“CLOE”), a publicly traded special purpose acquisition company, today announced the filing
of a registration statement by CLOE on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission
(“SEC”), which contains a preliminary proxy statement and prospectus in connection with the proposed business combination
(the “Business Combination”), announced June 2, 2023, with Kustom Entertainment, Inc. (“Kustom Entertainment”),
a wholly-owned subsidiary of Digital Ally.
While
the Registration Statement has not yet become effective, and the information contained therein is subject to change, it provides important
information about the combined company’s proposed business and listing of securities, Kustom Entertainment’s business, as
well as the proposed Business Combination, and the proposals to be considered by CLOE’s shareholders.
Following
the closing of the business combination, CLOE will change its name to Kustom Entertainment and will operate under the same management
team as Kustom Entertainment, Inc., which is currently led by Stanton E. Ross, the current CEO of Digital Ally. The transaction contemplates
an equity value of $125 million for Kustom Entertainment, Inc. The combined company is expected to have an implied initial pro forma
equity value of approximately $222.2 million, with the proposed business combination expected to provide approximately $18.1 million
in gross proceeds from the cash held in trust by CLOE (assuming no redemptions). Additionally, Digital Ally will distribute to its shareholders
15% of its shares in the combined company immediately following closing and intends to distribute the balance of such shares following
a six-month lock-up period.
Maxim
Group LLC served as exclusive financial and capital markets advisor to Kustom Entertainment in connection with the business combination.
Sullivan & Worcester LLP is serving as legal counsel to Kustom Entertainment and Ellenoff Grossman & Schole LLP is serving as
legal counsel to CLOE.
About
Kustom Entertainment, Inc.
Kustom
Entertainment, Inc., a recently formed wholly-owned subsidiary of Digital Ally, will provide oversight to currently wholly-owned subsidiaries
TicketSmarter, Kustom 440, and BirdVu Jets.
TicketSmarter
offers tickets to more than 125,000 live events ranging from concerts to sports and theatre shows. TicketSmarter is the official ticket
resale partner of over 35 collegiate conferences, over 300 universities, and hundreds of events and venues nationally. TicketSmarter
is a primary and secondary ticketing solution for events and high-profile venues across North America. For more information on TicketSmarter,
visit www.Ticketsmarter.com.
Established
in late 2022, Kustom 440 is an entertainment division of Kustom Entertainment, Inc., whose mission it is to attract, manage and promote
concerts, sports and private events. Kustom 440 is unique in that it brings a primary and secondary ticketing platform, in addition to
its well-established relationships with artists, venues, and municipalities. For more information on Kustom 440, visit www.Kustom440.com.
Kustom
Entertainment operates through its wholly-owned subsidiaries TicketSmarter, Inc. (“TicketSmarter”), Kustom 440, Inc. (“Kustom
440”), and BirdVu Jets, Inc. (“BirdVu Jets”). Following the closing of the Business Combination, TicketSmarter, Kustom
440, and BirdVu Jets will combine their management teams and focus on concerts, entertainment and garnering additional ticketing partnerships,
as well as using existing sponsorships and sports property partnerships to develop alternative entertainment options for consumers.
About
Clover Leaf Capital Corp.
Clover
Leaf Capital Corp. is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
For
more information, contact:
Stanton
E. Ross, CEO
Info@kustoment.com
Info@cloverlcc.com
Forward-Looking
Statements
This
press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1955. These forward-looking statements include, without limitation, CLOE’s and Kustom Entertainment’s
expectations with respect to the proposed business combination between CLOE and Kustom Entertainment, including statements regarding
the benefits of the transaction, the anticipated timing of the transaction, the implied valuation of Kustom Entertainment, the products
offered by Kustom Entertainment and the markets in which it operates, and Kustom Entertainment’s projected future results. Words
such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions are intended to identify such forward-looking statements. Forward-looking statements are predictions, projections and other
statements about future events that are based on current expectations and assumptions and, as a result, are subject to significant risks
and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside
CLOE’s and Kustom Entertainment’s control and are difficult to predict. Factors that may cause actual future events to differ
materially from the expected results, include, but are not limited to: (i) the risk that the transaction may not be completed in a timely
manner or at all, which may adversely affect the price of CLOE’s securities, (ii) the risk that the transaction may not be completed
by CLOE’s business combination deadline, even if extended by its stockholders, (iii) and the potential failure to obtain an extension
of the business combination deadline if sought by Clover Leaf; (iv) the failure to satisfy the conditions to the consummation of the
transaction, including the adoption of the agreement and plan of merger (“Merger Agreement”) by the stockholders of CLOE,
(v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (vi) the
failure to obtain any applicable regulatory approvals required to consummate the business combination; (vii) the receipt of an unsolicited
offer from another party for an alternative transaction that could interfere with the business combination, (viii) the effect of the
announcement or pendency of the transaction on Kustom Entertainment’s business relationships, performance, and business generally,
(ix) the inability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition
and the ability of the post-combination company to grow and manage growth profitability and retain its key employees, (x) costs related
to the business combination, (xi) the outcome of any legal proceedings that may be instituted against Kustom Entertainment or CLOE following
the announcement of the proposed business combination, (xii) the ability to maintain the listing of CLOE’s securities on the Nasdaq
prior to the business combination, (xiii) the ability to implement business plans, forecasts, and other expectations after the completion
of the proposed business combination, and identify and realize additional opportunities, (xiv) the risk of downturns and the possibility
of rapid change in the highly competitive industry in which Kustom Entertainment operates, (xv) the risk that demand for Kustom Entertainment’s
services may be decreased due to a decrease in the number of large-scale sporting events, concerts and theater shows, (xvi) the risk
that any adverse changes in Kustom Entertainment’s relationships with buyer, sellers and distribution partners may adversely affect
the business, financial condition and results of operations, (xvii) the risk that Changes in Internet search engine algorithms and dynamics,
or search engine disintermediation, or changes in marketplace rules could have a negative impact on traffic for Kustom Entertainment’s
sites and ultimately, its business and results of operations; (xviii) the risk that any decrease in the willingness of artists, teams
and promoters to continue to support the secondary ticket market may result in decreased demand for Kustom Entertainment’s services;
(xix) the risk that Kustom Entertainment is not able to maintain and enhance its brand and reputation in its marketplace, adversely affecting
Kustom Entertainment’s business, financial condition and results of operations, (xx) the risk of the occurrence of extraordinary
events, such as terrorist attacks, disease epidemics or pandemics, severe weather events and natural disasters, (xxi) the risk that because
Kustom Entertainment’s operations are seasonal and its results of operations vary from quarter to quarter and year over year, its
financial performance in certain financial quarters or years may not be indicative of, or comparable to, Kustom Entertainment’s
financial performance in subsequent financial quarters or years; (xxii) the risk that periods of rapid growth and expansion could place
a significant strain on Kustom Entertainment’s resources, including its employee base, which could negatively impact Kustom Entertainment’s
operating results; (xxiii) the risk that Kustom Entertainment may never achieve or sustain profitability; (xxiv) the risk that Kustom
Entertainment may need to raise additional capital to execute its business plan, which many not be available on acceptable terms or at
all; (xxv) the risk that third-parties suppliers and manufacturers are not able to fully and timely meet their obligations, (xxvi) the
risk that Kustom Entertainment is unable to secure or protect its intellectual property, (xxvii) the risk that the post-combination company’s
securities will not be approved for listing on Nasdaq or if approved, maintain the listing and (xxviii) other risks and uncertainties
indicated from time to time in the proxy statement and/or prospectus relating to the business combination, including those under the
“Risk Factors” section therein and in CLOE’s other filings with the SEC. The foregoing list of factors is not exhaustive.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking
statements, and Kustom Entertainment and CLOE assume no obligation and do not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or otherwise.
Important
Information and Where to Find It
In
connection with the transaction, CLOE has filed the Registration Statement with the SEC, which includes a preliminary proxy statement
to be distributed to holders of CLOE’s common stock in connection with CLOE’s solicitation of proxies for the vote by CLOE’s
stockholders with respect to the transaction and other matters as described in the Registration Statement, as well as a prospectus relating
to the offer of the securities to be issued to Kustom Entertainment’s stockholder in connection with the transaction. After the
Registration Statement has been approved by the SEC, CLOE will mail a definitive proxy statement, when available, to its stockholders.
Before making any voting or investment decision, investors and security holders and other interested parties are urged to read the
Registration Statement, any amendments thereto and any other documents filed with the SEC carefully and in their entirety when they become
available because they will contain important information about CLOE, Kustom Entertainment and the transaction. Investors and security
holders may obtain free copies of the preliminary proxy statement/prospectus and definitive proxy statement/prospectus (when available)
and other documents filed with the SEC by CLOE through the website maintained by the SEC at http://www.sec.gov, or by directing a request
to: 1450 Brickell Avenue, Suite 2520, Miami, FL 33131.
Participants
in Solicitation
CLOE
and Kustom Entertainment and their respective directors and certain of their respective executive officers and other members of management
and employees may be considered participants in the solicitation of proxies with respect to the transaction. Information about the directors
and executive officers of CLOE is set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with
the SEC on April 14, 2023. Additional information regarding the participants in the proxy solicitation and a description of their direct
and indirect interests, by security holdings or otherwise, will be included in the proxy statement and/or prospectus and other relevant
materials to be filed with the SEC regarding the transaction when they become available. Stockholders, potential investors and other
interested persons should read the proxy statement and/or prospectus carefully when it becomes available before making any voting or
investment decisions. When available, these documents can be obtained free of charge from the sources indicated above.
No
Offer or Solicitation
This
press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of
the proposed business combination. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended,
or an exemption therefrom.
#
# #
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