Digital Ally (KUST) Proxy filing summary

Executive summary

• Annual meeting scheduled for October 5, 2026, to vote on key proposals including a major acquisition, capital structure changes, and executive compensation.

• Acquisition of TFL, LLC for $112 million ($89.6M cash, $22.4M stock), with additional holdback shares contingent on EBITDA targets.

• Board recommends approval of all proposals, including the acquisition, stock issuance, reverse stock split, and new equity plan.

• Roth Capital Partners provided a fairness opinion supporting the financial terms of the TFL acquisition.

Voting matters and shareholder proposals

• Election of four directors to serve until the next annual meeting.

• Ratification of Victor Mokuolu CPA PLLC as independent auditor.

• Approval to increase authorized shares from 23,333,333 to 1.2 billion (1B common, 200M preferred).

• Approval for issuance of shares related to the TFL acquisition and related Nasdaq compliance.

• Authorization for one or more reverse stock splits at ratios from 1:2 to 1:100 within 12 months.

• Approval of the 2026 Stock Option and Restricted Stock Plan (20M shares, evergreen provision).

• Advisory votes on executive compensation and frequency of say-on-pay (recommended every 3 years).

Board of directors and corporate governance

• Board consists of four directors, all standing for re-election; includes audit, compensation, and nominating committees.

• Board leadership structure combines CEO and Chairman roles, with a lead independent director.

• Board and committees met regularly, with all directors attending at least 75% of meetings.

• Code of Ethics and Conduct applies to all directors, officers, and employees.