DIGITAL ALLY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2010 AND DECEMBER 31, 2009
March 31, December 31,
2010 2009
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Assets (unaudited)
Current assets:
Cash and cash equivalents $ 834,018 $ 183,150
Accounts receivable-trade, less allowance
for doubtful accounts of $110,000 - 2010
and $110,000 - 2009 7,105,648 8,398,353
Accounts receivable-other 406,932 476,049
Inventories 8,021,322 7,370,505
Prepaid expenses 314,248 224,923
Deferred taxes 1,950,000 1,695,000
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Total current assets 18,632,168 18,347,980
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Furniture, fixtures and equipment 3,060,034 3,010,977
Less accumulated depreciation and amortization 1,780,135 1,592,874
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1,279,899 1,418,103
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Deferred taxes 1,235,000 1,160,000
Intangible assets, net 320,732 336,182
Other assets 119,691 135,674
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Total assets $ 21,587,490 $ 21,397,939
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,161,600 $ 2,000,541
Accrued expenses 1,650,465 1,781,969
Income taxes payable 23,497 9,171
Customer deposits 3,380 39,924
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Total current liabilities 3,838,942 3,831,605
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Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 75,000,000
shares authorized; Shares issued:
16,570,608 - 2010 and 16,169,739 - 2009 16,571 16,170
Additional paid in capital 20,545,410 20,007,430
Treasury stock, at cost (shares: 248,610 -
2010 and 248,610 - 2009) (1,687,465) (1,687,465)
Retained earnings (deficit) (1,125,968) (769,801)
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Total stockholders' equity 17,748,548 17,566,334
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Total liabilities and stockholders'
equity $ 21,587,490 $ 21,397,939
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(FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT
ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2010 FILED WITH THE SEC)
DIGITAL ALLY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31, 2010 AND 2009
(Unaudited)
2010 2009
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Product revenue $ 6,149,232 $ 4,043,204
Other revenue 160,655 345,980
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Total revenue 6,309,887 4,389,184
Cost of revenue 2,868,061 2,529,644
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Gross profit 3,441,826 1,859,540
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Selling, general and administrative expenses:
Research and development expense 915,264 1,285,538
Selling, advertising and promotional
expense 693,230 401,722
Stock-based compensation expense 541,481 355,819
General and administrative expense 1,922,266 1,784,086
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Total selling, general and administrative
expenses 4,072,241 3,827,165
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Operating loss (630,415) (1,967,625)
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Interest income 9,248 9,131
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Loss before income tax benefit (621,167) (1,958,494)
Income tax benefit 265,000 658,000
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Net loss $ (356,167) $ (1,300,494)
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Net loss per share information:
Basic $ (0.02) $ (0.08)
Diluted $ (0.02) $ (0.08)
Weighted average shares outstanding:
Basic 16,303,317 15,716,200
Diluted 16,303,317 15,716,200
(FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT
ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2010 FILED WITH THE SEC)
DIGITAL ALLY, INC.
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED NET INCOME (LOSS)
FOR THE THREE MONTHS ENDED
MARCH 31, 2010 AND 2009
(unaudited)
Three Months Ended
March 31,
--------------------------
2010 2009
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Net loss $ (356,167) $ (1,300,494)
Non-GAAP adjustments:
Income tax benefit (265,000) (658,000)
Stock-based compensation 541,481 355,819
Depreciation and amortization 208,511 220,912
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Total Non-GAAP adjustments 484,992 (81,269)
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Non-GAAP adjusted net income (loss) $ 128,825 $ (1,381,763)
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Non-GAAP adjusted net income (loss) per share
information:
Basic $ 0.01 ($ 0.09)
Diluted $ 0.01 ($ 0.09)
Weighted average shares outstanding:
Basic 16,303,317 15,716,200
Diluted 16,303,317 15,716,200
(FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT
ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2010 FILED WITH THE SEC)
DIGITAL ALLY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2010 AND 2009
--------------------------
2010 2009
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Cash Flows From Operating Activities:
Net loss $ (356,167) $ (1,300,494)
Adjustments to reconcile net loss to net
cash flows provided by (used in) operating
activities:
Depreciation and amortization 208,511 220,912
Stock based compensation 541,481 355,819
Reserve for inventory obsolescence (26,046) 164,166
Reserve for bad debt allowance -- 20,000
Deferred tax (benefit) provision (330,000) (675,000)
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable - trade 1,292,705 1,748,399
Accounts receivable - other 69,117 (96,581)
Inventories (624,771) 78,280
Prepaid income taxes -- 10,000
Prepaid expenses (89,325) 16,912
Other assets 15,983 46,232
Increase (decrease) in:
Accounts payable 161,059 (1,190,347)
Accrued expenses (214,905) (123,496)
Income taxes payable 14,326 --
Customer deposits (36,544) 86,479
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Net cash provided by (used in) operating
activities 625,424 (638,719)
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Cash Flows from Investing Activities:
Purchases of furniture, fixtures and equipment (49,057) (174,900)
Additions to intangible assets (5,800) (50,612)
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Net cash (used in) investing activities (54,857) (225,512)
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Cash Flows from Financing Activities:
Proceeds from exercise of stock options
and warrants 45,301 2,900
Excess in tax benefits related to
stock-based compensation 35,000 7,000
Purchase of common shares for treasury -- (63,112)
Purchase of employee stock options -- --
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Net cash provided by (used in) financing
activities 80,301 (53,212)
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Increase (decrease) in cash and cash
equivalents 650,868 (917,443)
Cash and cash equivalents, beginning of period 183,150 1,205,947
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Cash and cash equivalents, end of period $ 834,018 $ 288,504
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Supplemental disclosures of cash flow
information:
Cash payments for interest $ -- $ --
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Cash payments for income taxes $ 15,674 $ --
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Supplemental disclosures of non-cash investing
and financing activities:
Common stock surrendered as consideration
for exercise of stock options $ 513,100 $ 97,100
============ ============
(FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT
ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2010 FILED WITH THE SEC)
Contact Information: For Additional Information, Please Contact: Stanton E. Ross CEO (913) 814-7774 or RJ Falkner & Company, Inc. Investor Relations Counsel (800) 377-9893 info@rjfalkner.com