Digital Ally (KUST) Proxy filing summary

Executive summary

• Proxy statement covers the 2026 annual meeting, including a major acquisition, capital structure changes, and governance matters.

• Shareholders will vote on 12 proposals, including board elections, auditor ratification, share authorization, acquisition-related issuances, reverse stock split, compensation, and equity plans.

• The acquisition of TFL, LLC is valued at $112M ($89.6M cash, $22.4M stock), with additional holdback shares and debt repayment, and is subject to multiple shareholder approvals.

• A fairness opinion from Roth Capital Partners supports the acquisition's financial terms.

• The board recommends approval of all proposals.

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 23.3M to 1.2B (1B common, 200M preferred).

• Approval of share issuances for the TFL acquisition, including potential change of control and compliance with Nasdaq rules 5635(a), (b), and (d).

• Authorization for a reverse stock split at a ratio from 1:2 to 1:100, at board discretion 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, with detailed biographies and committee assignments.

• Three standing committees: Audit, Compensation, and Nominating & Governance, all with independent directors.

• Audit Committee oversees financial reporting, internal controls, and related party transactions.

• Board leadership structure includes a combined CEO/Chairman and a lead independent director.

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