Digital Ally's Kustom Entertainment to merge with SPAC Clover Leaf in $125M deal

KUSTOM ENTERTAINMENT, INC.

Digital Ally's subsidiary Kustom Entertainment to merge with Clover Leaf Capital Corp. (SPAC) for $125M minus estimated debt, paid in Clover Leaf stock at $11.14/share.
Clover Leaf will change its name to 'Kustom Entertainment, Inc.' post-closing; existing Kustom management to lead combined company.
85% of merger consideration shares subject to 6-month lock-up; sponsor forfeiture and earnout provisions tied to 2023-2024 revenue targets.
Transaction requires Clover Leaf stockholder approval, regulatory consents, and net tangible assets of at least $5,000,001 post-redemption.
Digital Ally, as sole stockholder of Kustom, will receive the merger consideration; termination fee of $1.75M if Kustom accepts superior proposal.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

KUSTOM ENTERTAINMENT, INC. entered into Agreement and Plan of Merger with Digital Ally, Inc., Clover Leaf Capital Corp., CL Merger Sub, Inc., Yntegra Capital Investments LLC, and Kustom Entertainment, Inc. valued at approximately $125 million (effective 2023-06-01).

Action: entry
Agreement: merger
Counterparty: Digital Ally, Inc., Clover Leaf Capital Corp., CL Merger Sub, Inc., Yntegra Capital Investments LLC, and Kustom Entertainment, Inc.
Value: approximately $125 million
Effective: 2023-06-01

Exact text from the filing

On June 1, 2023, Digital Ally, Inc., a Nevada corporation (the “ Company Stockholder ”), and the sole stockholder of the Company (as defined below), entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Clover Leaf Capital Corp., a Delaware corporation (together with its successors, “ Clover Leaf ”), CL Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of Clover Leaf (“ Merger Sub ”), Yntegra Capital Investments LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of Clover Leaf (other than the Company Stockholder as of immediately prior to the Effective Time and its successors and assignees) in accordance with the terms and conditions of the Merger Agreement (the “Sponsor” or the “ Purchaser Representative ”), and Kustom Entertainment, Inc., a Nevada corporation with a focus and mission to own and produce events, festivals, a

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Source: SEC EDGAR

accession 0001493152-23-020222

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