Clover Leaf Capital, Kustom Entertainment amend lock-up agreement

Digital Ally (DGLY) and Clover Leaf Capital Corp. (CLOE) and Kustom Entertainment announced that CLOE and Kustom Entertainment have entered into an amendment to the Lock-Up Agreement in connection with the proposed business combination between CLOE and Kustom Entertainment announced June 2, 2023. The original Lock-Up Agreement was made and entered into as of June 1, 2023 in connection with the proposed Business Combination, in which Digital Ally, would immediately distribute 15% of all securities received as merger consideration in the merger at the closing. Under the Amended Lock-Up Agreement entered into December 11, 2023, Digital Ally will now immediately distribute 20% of all securities received as merger consideration in the Business Combination at the closing, with 80% being subject to the 6-month lock-up period. This Amended Lock-Up Agreement follows the recent filing of the S-4/A Registration Statement Amendment with the U.S. Securities and Exchange Commission, indicating continued progress toward the previously announced merger with CLOE. The combined company will be known as Kustom Entertainment and will operate under the same management team as Kustom Entertainment, 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. 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 $14 million in gross proceeds from the cash held in trust by CLOE, assuming no redemptions. Additionally, Digital Ally will now distribute to its shareholders 20% of the shares obtained in Kustom Entertainment immediately following the closing of the merger and intends to distribute the balance of such shares following a six-month lock-up period.