Digital Ally (KUST) Proxy Filing summary

Executive summary

• Special Meeting scheduled for April 1, 2025, to vote on four key proposals, including a major increase in authorized shares, a potential reverse stock split, approval of warrant issuances, and possible adjournment to solicit more proxies if needed.

• Board recommends voting in favor of all proposals, citing flexibility for future capital needs, compliance with Nasdaq listing requirements, and enhanced ability to raise capital.

• Forward-looking statements highlight intentions to support growth, product development, and financial stability, but note that actual outcomes may differ.

Voting matters and shareholder proposals

• Proposal 1: Increase authorized shares from 210 million to 5.01 billion, with 5 billion as common stock, to support future transactions, capital raising, and incentive plans.

• Proposal 2: Authorize the Board to effect a reverse stock split at a ratio between 1:5 and 1:100, at its discretion, by April 1, 2026, to maintain Nasdaq listing and improve stock liquidity.

• Proposal 3: Approve issuance of Series A and B Warrants and underlying shares, as required by Nasdaq Rule 5635(d), following a $13.48 million offering completed on February 14, 2025.

• Proposal 4: Approve adjournment of the meeting if more time is needed to secure votes for the above proposals.

• No appraisal rights are available for any of these proposals.

Board of directors and corporate governance

• Board and executive officers collectively own less than 1% of outstanding shares; no individual or group owns more than 5%.

• No director or executive officer has a substantial interest in the proposals beyond their shareholdings.

• Board retains discretion to abandon the reverse stock split even if approved by shareholders.