Good morning. And welcome to the Digital Ally Fourth Quarter 2015 and Year End Operating Results Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Statements made on today's call will include forward-looking statements including statements regarding our expectations, beliefs, intentions, or strategies regarding the future including statements around projected spending. We intend that such forward-looking statements to be subject to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. The forward-looking statements information is based on current information and expectations regarding Digital Ally Incorporated. These estimates and statements speak only as of the date on which they are made, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. All forward-looking statements that are made on today's call are subject to risk and uncertainties that could cause our actual results to differ materially. These results discussed in our press release we issued today and in greater detail and our annual report on Form 10-K for the year ended December 31, 2015 and it's in the caption risk factors. You may find this in our other SEC filings on our Web site at www.digitalallyinc.com. Please note this event is being recorded. I would now like to turn the conference over to Stan Ross, CEO of Digital Ally Inc. Please go ahead.

Thank you. Thank you everybody for joining us today. With me is Tom Heckman, the company's CFO. As mentioned, we will have a -- I will make a couple of comments about our 2015 and maybe even a little bit about our 2016 outlook. Tom will also go through a detailed recap of our 2015 financials to give everybody a better color on that and then also as mentioned that 10-K will be filed that you guys can do the in depth dig and if you would like and feel free to give us a call back if we've missed anything. But anyways, 2015, it's one of those years that was very challenging in regards to a lot of obstacles that get thrown at us. While the 2015 was challenging, we're extremely excited about 2016 because we feel like so many of the challenges and hurdles that were in front of us in 2015 are now behind us. We've done very well in regards to getting our patents validated and the strength of them appears very, very strong. We were issued numerous additional patents in 2015 that will play in the coming years in regards to features that are very unique and in demand by the marketplace. We've been able to strengthen our sales force. Both our commercial side and our law enforcement side to where we are now over 8000 agencies that are utilizing some form of our video equipment whether in the capturing, the storing, the managing. So it's been a pretty exciting year. The numbers don't reflect that to be at tremendous amount of still legal costs and we will have some legal cost going forward as we continue to -- fight those that are violating our patents that we have in the marketplace. But anyways, Tom, do you want to give them a recap of our numbers and --?

Sure. Thanks. Thanks Stan. And welcome to everybody, I appreciate you joining us this morning. We did file our Form 10-K yesterday afternoon evening and hopefully everyone had a chance to at least look at that and I would encourage you to go ahead and dig into there and it certainly has more details than I planned on going into -- in this little discussion here. So, I will focus on the significant trends and items in the 2015 financial statements and hopefully you will spend some time in the 10-K to understand some of the other trends that are going on in -- with the company. First of all, revenues -- we experienced a $3 million increase year-over-year in revenues which is about 15%. That's significant to us because it really, really in my view represents an inflection point. It's the highest level of sales we recorded on an annual basis since 2010. It's reversed some declining years and as I said, I think its inflection point that we can hopefully continue that trend into the future. Again, a $3 million increase year-over-year revenue or 15% on last year's revenue. Three of the four quarters in 2015 exceeded $5 million that's something we haven't done in a long time actually the last three quarters all exceeded $5 million, the first quarter was the only one that did not. So, obviously, the trend looks a pretty good on a quarterly basis as well. I'm also pleased to report our Body-Worn Cameras and Commercial Event Recorder business both more than doubled year-over-year in revenue during 2015 compared to 2014. One area that we had our challenges and it reflected in our financial statements was our international revenues. We are less than stellar for 2015. We reported revenues -- international revenues of…

Yes. Thank you, Tom. And again, I can't stress about the importance of I guess our VuLink technology, as you can imagine there has been so much publicity around departments that have not captured the truth in regards to having video evidence in regards to situation that they ran into and what would be worse is that if you had a body camera and the office was wearing it but because of the high stress that they're under when some thing developed that they may have not, they may have reacted in regards to grabbing a weapon or taking cover or something along those line and never activated their body camera so you could have probably just as much of a back lash if your body camera was not on then if you just did not have one. So very important piece of technology that we hold the patent rights too and we are seeing it -- a great [indiscernible] requested in the RFPs, going forward. So -- Anyways well, I think we're going up the floor for our Q&A

Thank you. [Operator Instructions] Our first question is from Bryan Lubitz at Aegis Capital.

Good morning guys.

Good morning, Bryan.

How are you?

Doing well.

Good. Tom, did I hear you right when you had mentioned that I guess the South American distributor, we got an order for nearly $2 million order?

No, no Brian, it was a pilot order for 80 DVM-800 so that was a pilot deployment. The total, the best part in police force that that went to has over 8,000 uniformed officers, so its one of the very largest cities in South America. And we're happy to get that opportunity, the pilot project is going well, it shipped in actually last week or two, we shipped the remaining units, so they're just getting started on their pilot project. Hopefully its much largest than what it started as in terms of a pilot project. What I was mentioning was with that order alone we've almost doubled our entire international revenues from 2014.

The 80 cameras almost doubled the revenue?

Yes. That tells you how much we under ran our targets and hopefully our abilities in the international area in 2015.

Now with the pilot program, am I right to assume this is going to be three to six months before even they make a determination if they're going to order 8,000 cameras from us hypothetically?

Well this is a pilot order and I couldn’t tell you how long they’re going to test it. I know it’s at least a three month process. Now in terms of deploying the remaining 8,000 or so units that could be in stages it could be all at once, we have not heard anything in that regard, but I do know that we're very glad that we were invited to participate in this pilot program.

Okay. So now in addition to that in the release you guys put out yesterday you mentioned that we're sitting with just under $11 million worth of inventory. Is that the highest levels we've ever reached?

No, no actually if you look quarter-over-quarter go back to the September quarter it’s reduced almost $1.5 from that level. So we focused on inventory levels we've taken steps to reduce that and we hope that trend will continue in 2016.

What's the best level that you guys would ideally like to be at?

Well, there is a couple of issues that are sticky in there. Number one, we've got about $1.3 million of LIDAR inventory that was part of the lawsuit with DragonEye that just recently been resolved and all those units are either have gone back or will go back to DragonEye for retrofit, refurbishment and upgrade. So those units really are truly for sale as we speak, but we are getting them back and we should be able to start moving those. We also had a very large international order in our pipeline in actually late 2014 that caused us to build up a large level of DVM-750s much more than our normal levels. And as a result of the run up and the value of U.S. dollar versus the peso the government has actually delayed that purchase, not cancelled, but delayed that purchase and we don't know exactly when that's going to happen. We hope it happens in 2016 and the sooner the better but we're holding that inventory until such time as that customer actually submits an order.

Okay. I have one more and I know I'm supposed to limit them. First and foremost, when you're saying the peso I'm assuming you're talking about [Federalis] [ph] and then upgrading and…

Yes. Yes. We've got -- in fact we did a press release a year or two ago about a refurbishment project that they started. It was suppose to be 12 to 18 month program. They started it -- I think ordered $600,000 or $800,000 worth of product and then stopped because of this valuation problem that they were having. And quite frankly their economy is run largely on petro dollars and it's been difficult, their budgets have been slashed. So we've got to get past that but we believe that those orders are coming we just don't know exactly when.

Okay. And then my last question, I know that you guys had put out a press release late last year in regards to Yellow Cab down in Florida commercially, the commercial part of our business obviously for the most part it's not going to city councils et cetera and finding the money. Have we gone out there and talked to companies like say Uber or FedEx or UPS or State Farm and try to get exposure in the commercial lines as well?

Yes, Bryan. We definitely reaching out to all those that you've mentioned, but what we're also noticing is sort of a partnership with insurance companies because they are the ones that are actually that have a lot of exposure out there and opting to the ones that have to defend lawsuits that are frivolous and end up spend a lot of money and/or just writing checks because they don't have solid enough evidence to show that their driver was not -- at fault. So again, we really have a great expectations and hope for the commercial division especially with a lot of the new features that we have been able to bring into that products. So 2016, again, I'd look for great growth in that commercial division.

Excellent. Thank you, guys.

Thank you.

Your next question is from William Gibson at ROTH Capital Partners.

Thank you. Do you have a sense of when the trial date will be in your suit against TASER?

I don't yet Bill. I mean, I'm open to learn something fairly soon. They finally have responded to the suit originally they asked for a little more time to respond. And then, they did respond and it pretty generic the response. But, we don't really have a timeline other than that we are hoping that some of the things that we've uncovered in things that we strongly believe to be facts. We will be able to start discovery here probably in the second quarter would be my best guess.

And how are you paying for your legal costs, is this all out of the pocket or do you have some kind of contingent arrangement?

No. I mean, I would tell you, lot of the deals that we've done in the past, obviously, have came out of pocket. And some of them we had to again get involved in because we had to get our products fixed, or whatever the reason it maybe. But, this is one that we probably feel the strongest about that out of any of them that we've had to deal with. It looks to be pretty blatant from where we are standing that they are violating our patents. As a matter of fact, they put on their own -- you've got that Tom on their own blog.

TASER put out a press release back in September 2015. And in that press release, I'm quoting as Bill "TASER has improved upon the old technology described in the Digital Ally patent with new patent pending technology called Axon Signal." So in my view that's an admission that they used our patent. They have stepped on it. So, I don't know -- I know they have come out and say that they believe our lawsuit is frivolous, but they sure not acting like it's frivolous in terms of answering the complaint and moving forward on that. So --

So, I mean again, we are comfortable that we've got the war chest and capability to see this fight till the end.

Yes. So, are you thinking, what I'll say $1 million in legal cost this year?

That maybe a little high. But, not far off probably around 800,000.

Yes, okay. And could we hit some up-to-date numbers on the sales people on both the commercial and law enforcement side?

Yes. We are still right at -- as far as 20 territories, so 20 individual sales reps are basically out there. We did bring in some key count personnel because we are starting to see some of these larger departments that we are starting to get invited to and our ability to show our products. So we have some key account personnel that we brought in. The commercial division sort of the same scenario they have got different deployments in different areas not just the atypical taxi cab limos, fleet vehicles, but even some other areas. So they have added several people as well. So I would say as far as, actual sales force we probably had about 30 of them that are knocking on doors, you have another 15 that are probably sales support in regards to working closely with our sales reps that are out in the field. And then, obviously, we have technical support and customer service personnel that easily hits another 30.

Okay.

What are finding especially with the move to the cloud and the amount of video storage that has to happen either locally or up in the cloud that we've had to develop a team of pretty substantial team of pre-sale technicians to go out and actually look at the site, look at the issues that they have and each one of them is different. And with that we developed a team that's mobile and agile and can go out there and figure these sort of things out and really helps us on the back side, once the installation is put in place with that pre-planning and pre-technical support, pre-sale technical support that really cuts down on the problems that occur after installation and the sale occurs.

That makes sense. Lastly, commercial, I went through the 10-K, I assume I could back my way into the -- do you know what that was in the fourth quarter?

Fourth quarter revenue is commercial.

I can say it, was roughly, actually, the fourth quarter just in a side, it was the first quarter on a -- on a unit basis commercial household law enforcement in terms of In-Car Video. So in terms of numbers of units, it exceeded law enforcement for the first time in history. So it is on a pretty good trajectory. In terms of revenues for the fourth quarter, it almost hit a $1 million for the quarter. So we are looking for large increases in commercial -- commercial revenues in 2016 and beyond.

Okay. And so we have a sense of sales momentum yet, or we still just running into the hurdles with the lawsuit, I mean you talked about giving invited to the party. But it sounds like things aren't picking up much so far in the first quarter or what is the case?

No. I disagree a little bit, Bill. We are actually have been identified to some of the larger municipalities. And I think there is enough stuff going on around there and enough press, I think there was even some more stuff in the Wall Street journal today concerning companies or departments that are doing this no bid processing and finding out like, I believe it was Baltimore that we had to sign -- moving forward on a contract that's $12.8 million. And for some reason they didn't look at Digital. We came in for less than $6 million. So I think there could be some tax payers, I want to understand is that product that you guys elected to go with really two times better than what's in the competition or the others that bid -- were able to bid. But, in short, we are being asked to come back in, actually have face-to-face meetings with these guys. Once again, the face-to-face and explain our product and submit a bid, I think their eyes are open to what all we do at the capabilities of doing and the quality of our product and then the prices always very attractive. So no, we are seeing an up tick in the first quarter as far as opportunities.

Yes, Bill. I would add to that most of the times these contracts that are let or one year firm contracts with three to four follow-on years, option years if you will. And what we have noticed and have seen is at that one-year timeframe that some municipalities, some large municipalities are coming out and saying, look we can't afford the contract we are in. We are looking for alternatives and they are coming to us and we enjoy going in there and showing them how much money we could save and really the better product that we can put in the field for them. So we are getting that opportunity, although, I will tell you that once a competitor has their system in there, it's pretty hard to unseat them because of the learning curve and the officers are generally more comfortable with technology that they know rather than technology that's new and that they don't know. But it is encouraging that we are getting invited back to the party after a year primarily because of the price shock that they are experiencing with some of the competitors especially TASER.

Good. And then, just one last housekeeping. Looking at cost of sales last year, was that $6.7 million total of the one-time cost?

It was $2.5 million roughly of one-time cost during 2015. Now, in 2014, we did have scrap, but it was less than $250,000, $280,000 for the whole year. So, yes, it was incrementally a large one-time hit for us.

Okay. So instead of double-canning 2.5, it was with the two different charges. Got you. Thank you.

The next question is from [indiscernible].

Hi. Good morning.

Good morning, Heesh [ph].

Just a quick question on the RFPs and bids, I think Tom mentioned that in your -- in the RFPs and bids that you guys are getting lately that -- they are asking for the auto activation feature? Is that right?

That is correct. They are now asking for that.

Yes. Heesh, I would say it's become -- almost a standard in the industry and certainly in the RFPs are asking about and for the auto activation technology. And that's why we are so bullish on our VuLink patent and what that really means in terms of the competitive landscape.

Okay. Yes. Basically my question surrounding that was -- if you guys can over come the legal hurdles with TASER with regards to your 290 to 452 patents. How much of that would translate into your revenues in the near term or long-term?

Yes. Who knows, that's a big number, I mean, a big number. I think we could probably easily back to the envelope find over $30 million worth of bookable business that they have been able to put on -- to claim that talks about auto activation. Although, I don't know, how much they delivered this, I know they delivered some of their Axon Signal technology. By and large, the more recent large orders and bids that they've won, they promise auto activation as part of their free upgrades, if you will down the road. So obviously, that was a big part of the decision to go with TASER, them having this Axon Signal and be able to use it and promote it and sell it to the cities.

That's a big number Heesh.

All right. Do you guys have any idea when this might come into our resolution?

So, I think to get pretty heated here in the second quarter, we will be able to start doing some of the discovery and be able to bring a lot of that more to the forefront. So I think second quarter would get real active and then hopefully, we can get in front of judge and jury by third quarter.

Heesh, this is Tom. The patent piece of it, it seems pretty cut and dry especially with their admission of using our technology. I don't know how you get around that. But, obviously, they will have lawyers and they will have some story to tell. On the other piece of it, the commercial rivalry, the unfair competition, conspiracy the Sole-Source contracts. There is a lot of discovery we can and should do there that I believe will open up more and more avenues for liability. We just -- we basically looked at newspaper accounts across the country that are shining on the light on some of these situations. Once we start-in the discovery, I think it will fertile ground to find out more and better details for situations that we don't even know about yet.

Don't get me wrong, not only they us out there in the public. We have had department heads and others that have come to us and we indicated they liked our products the best, they liked the pricing, they liked the service, hitting on all cylinders. And but then, they were told by someone up above or some other factor comes in that they are going to go with TASER. And [optimism] [ph] comes after someone has made a trip. So anyways that one will be -- that will be a lot of discovery including some of their ex-employees we fun to talk to.

All right. Okay. In terms of civil damages, what could the total monetary awards, I mean like where you guys seeking at this point?

I don't know how to -- and I mean, I just don't even know how to put a number on it, it would be so large I mean, you have to look at the one, is that, at some point, if you're just looking at the patent side of the auto activation, you know that's a big number as I mentioned to Bill a while ago, I mean, really big number. But then, you get into the fact that if -- the other charges come into play and that may bring in a whole new scope of opportunities or business that we should have had at least a shot at getting. So it's a large number. I don't even know how to -- it's in the 10s of millions, let's put it that way.

All right. Got it. Okay. Go on.

Yes. Heesh, I would add that in our lawsuit, we are asking for permanent injunction against TASER so that they would have to cease offering for sale and delivering anything having to do with -- that would step on our patent. So with that -- that opens up the competition and quite frankly, we can capitalize on the patent that we have.

Good point.

Okay. Quick question on the international. I think as Tom mentioned that you guys mixed your 2015 international revenue estimates by around $2 million. So how much are you guys expecting in 2016 and you guys called out a few issues like foreign competitors, FX trades and customers being very fickle in terms of cost.

Yes. We have -- we are not even going down that road in regards to international. I mean, you have to realize, we actually had a purchase order in hand last year for $2 million. So I mean, for us to miss our number, when you got a purchase order, but they could not fund, it's really hard to figure out. So international, we are just going to keep our head down and try to get as much of business of that as we can to be thankful. But, we need to really continue to concentrate on those opportunities right here in the states and see what we can get done.

All right. We're 2/3rds into the first quarter of 2016 a little more than that. How much are your revenues trending like so far in the first quarter of 2016?

Heesh, you're trying to drag that out of the sword. No. We are not forecasting 2016, yet. We do believe that the trends are there revenue wise that we are going to see an increase in 2016 but we have not publicly forecast revenues by segment -- not segment by market channel or anything like that. But, the writings on the wall revenues from body cameras, we believe we will continue trending higher as well as commercial. Commercial is really, really doing well at the current time and especially with the fleet view web-based software and monitoring software that we have. It's really, really, starting to gain traction. So we are excited for 2016. We just don't know how excited yet.

All right, guys. That's it for me. Good luck with the TASER fight.

Thanks Heesh.

The next question is from Ethan Leibowitz at BMO Capital.

Hi, gentlemen. Good afternoon.

Good afternoon.

A question I have is, I noticed the lawsuit was filed and last week TASER filed, they filed the motion to dismiss, how confident are you that you will get over that hump with regards to motion to dismiss? And then, second, my question is, why didn't file when your course of action or what's in the lawsuit, file for a preliminary injection as well as permanent injection?

Well, obviously, there is -- I would say that we do -- when we looked to our attorneys to give us the best of guidance with regards to going for permanent versus temporary injection. So but I have to leave that up to them. I believe I know their reasoning and regards to that. I will tell you that, I did have a chance to review their motion to dismiss and which you would expect I mean that's what, that is the next step in the evolution of this process and everything was pretty generic. So I don't know of anything there that gave me any heartburn or look like there is any substance to them not happen to go ahead and get in front of a judge.

But to follow-up on the preliminary injunction wouldn't that [indiscernible] for at least procure any issue you have and elevate any business or reduced competitiveness moving forward as suppose to waiting to final determination in the lawsuit and the judgment?

Well, in terms of the damages, if TASER continues to sell and offer for sale what we believe is our VuLink technology that just adds to the damages that they would owe us at the end. So I don't know the exact legal reason, but in my view if they want to continue to sell it, so be it, it will just add to the damages that will be awarded at the end.

Okay, great. Thanks a lot.

Thank you.

The next question is from Brian Rockowitz at Aegis Capital.

Hey, gentlemen. Thank you for your update and I hope everybody is doing well over there.

Doing well, Brian.

I'd like to follow a little bit more on this situation with TASER. You recently made some statements saying that they possibly have bribed officials, which if my memory is correct this wouldn't be the first time I think Bernie Kerik ran into some issues with them conflicts of interest and things to that nature. Again, I don't know the details and you said you're going to be asking for an injunction against them going forward. Can you elaborate a little bit more with regards to the type of damages that you're looking for, for example since September TASER did over $35 million in body camera revenue?

Well, I think that might have been what they brought that they claimed that they brought and so those are contracts that they're looking to generate those kind of revenues over the period of those contracts. Again, one of the things that's frustrating that it seems like what comes out of that camp is half of the story all the time and whether it was -- their announcement about the 292 patent being unpatentable and all our claims got kicked out -- that just, technically you may say that that was correct all the claims did, but what they did go on to say is that they basically with us going from and I'm just giving an analogy here. But instead of calling it an automobile we call it a police car and because now we call it a police car it's solid versus just an automobile which may be too broad. And so what you got what I say is you've got a pie and at one point it was cut up into 20 pieces. But after it was reevaluated and everything else it got cut up into 59 pieces you still have a wonderful pie that has 59 claims and that's just on the 292 patent let alone the [450] [ph]. So the things that we're excited about is we are very confident that we're probably going to not only have a real exciting large number that we could possibly be looking at in regards of things that we know about. But, when we start pulling back pages and doing our due diligence I'm sure there is a lot we don't know about that will start to pop up in this discovery. So it's a big number and at the end of the day if we got the VuLink technology and that patent is as strong as we believe it is I mean that is a real game changer in the industry.

Well, it looks like a game changer to me is, if I use my number you're about $35 million market cap if you go after TASER and just using simple math let's say for trouble damages and they did $35 million in revenue then that would estimate approximately $100 million. And for a company your size to receive potentially, again, I'm not the lawyer I don't know what you guys are doing but potentially you see those kind of numbers would insinuate to me that you guys got a lot going forward?

Yes, Brian. I agree and that's why when Heesh and Bill were asking us and to try to put a number on it, I mean it's very difficult, I mean it's a big number.

What we do know Brian is, it's willful at this point, I mean --

They're still doing it. And that's what they didn't know about it because they clearly know about it because they challenged.

Yes. They challenged -- they asked for the U.S. PTO to reexamine the patent back in I think March of 2015 so obviously from that point forward they knew about it and they willfully continue to offer for sale and sell that Axon technology -- our Axon Signal Technology. So the law is pretty clear in terms of trouble damages and so on and so forth for willful infringement. And I think it would be hard to argue that that's not willful at this point.

I agree.

All right. Two more questions and I’ll let you go, might to might equal six but going forward I know that there are other patents that you guys have issued for other types of product line for such smart weapons, can you elaborate?

Yes. So at least when it pertains to the VuLink technology some of the things that the triggering devices that are in our claims, one of the claims is a smart weapon or a non-lethal weapon as you would say or so that type of device along with light bars and things along those lines are part of the traders that we captured under the VuLink patent associated with body cameras and auto activation other patents that are out there that we announced is the RFID, which that feature we are starting to build in our next generation of products and is a very appealing technology that law enforcement likes to wear. You don't have so much pre-imposed work when it comes the time that you grab your body camera you got to log in, make sure it's signed out to you, you get into a car you sync over with this car. There is a little bit of work associated with all that. But the RFID, he literally just puts his badges car to whatever up to the device and it automatically dumps everything right there and also when it gets in the automobile. So you don't have to worry new shop and it's just something that makes things streamline for them. And also you're assured that you know what officer was wearing this body camera when these incidences occurred and that wasn't a mistake. So we're excited about not only the patents the ones that we're been defending right now. But, we're excited about the patents that we have that we're capable of building our new products around that are going to continue to allow us to be one of the leaders in the industry.

That's great. And my last question is, you guys are one of the oldest manufacturers in the space of body cameras, you guys have some very good patents apparently. Have you been approached, would you be considered or would you consider licensing, royalty I mean recently Motorola announced that they'd like to come into the space, we know Panasonic is looking to come into the space, you guys hold the patents and that could be the Holy Grail to future business, can you elaborate there?

Yes. We're excited about it and you're right we've been around doing In-Car Video systems actually we started shipping 10 years ago this month it was March 27 of 2006 that we shipped our In-Car Video system. So we have been in this space a long time, we got tremendous amount of units out there I think somewhere around 80,000 devices out there currently I mean it’' a big number lot of departments, I guess in regards to the business model and going that route that you're referring to is something we would have to think about, but right now we should like that fact that we know that we’re the owner of this technology and look forward to implement that in the market place.

Excellent.

Being the only ones that can implement out in the market place.

Yes. Brian again, the lawsuit we’re asking for permanent injunction that would deny or prevent or prohibit TASER from deploying even offering for sale, but the TASER Axon Signal Technology and that's really what we want. We don’t want them to pirate use our technology against us. We developed it. We patented it. We believe it's fastly becoming standard for the industry so we just want them to stop using our technology.

Look Brian, we're one of the first to come out of the first solid state In-Car Video systems in the country back in 2006. And again, we've always been proud at ourselves as being innovators in this field. And so again, I think we've done it again with the VuLink, the RFID features that we'd be able to bring. Our cloud storage, redacting on and on and on. I mean we've got a beautiful package we just hope that the departments that are out there will do the right thing by -- they're tax payers and go out for a bid and take a look at what everyone has and let us in the game.

All right. Listen that pretty much answers my questions. Congratulations guys of being debt free. I'm sure it's a very good feeling.

It is.

It is.

Well, we look forward to hearing more about your progress and I appreciate your time gentlemen, thank you.

Thank you, Brian.

The next question is from Bryan Lubitz at Aegis Capital.

All right, guys, I'm back and you guys have been very gracious so far. So, I won't bombard you with another 20. I just wanted this to be as quickly, Tom you alluded to we doubled our cash position and obviously we're debt free now, correct?

We are, yes.

Okay. And if I remember correctly one of the earlier caller said, he had asking in terms of how much it would cost us to fight this litigation with TASER at about $1 million, so with your cash burn being what it is, do you guys have any plans at all to raise more capital in the near term future?

Brian, we don't -- we do not have any plans to access the capital market certainly not debt markets. But we do have almost 2 million warrants outstanding that with the register direct offering that we did last year. If and when those are exercised that could bring us another $20 some million worth of capital.

What's the price on that exercise?

13.60s in that range. We got our ways to go before that it makes sense to exercise. But I think our goal internally is to improve the business, improve the market price the stock to where those warrants are exercised and with that, I think we're set for the foreseeable future in terms of liquidity needs. But to answer your immediate question, we have no immediate plans or even near term plans of accessing the debt or equity markets.

Okay. So what I'm looking at is this, we've doubled our cash, all of our debt is cut out you guys are not planning to dilute the shareholders moving forward and any exercise is 13.5 or better. Are we just dependant on, for example, in the law enforcement part, these bills getting passed to make it mandatory -- you guys have such a great story, what's holding us back from reaching that next level? And to follow that because you have such a great story these fundamentals look great financials are better than they ever have been, sales are up, are you guys planning on going out there and sitting down with more analysts, more Wall Street guys to tell the story and to get it out there for you?

Yes. Bryan, you touched on a very good comment there. And that is one of the things is, a tremendous amount of states and larger municipalities are getting to the point where they've got procedures in place and guidelines in place to implement body cameras. I mean believe it or not I think that this market is just now starting to get a little more exciting as far as in the body camera side of it because there are some departments out there that just haven't deployed or not interested in deploying yet because they don't have the policies in place and that is occurring. I think something over in Missouri where they were talking about again mandate and I know of others that are talking about mandating it, but along with that you need to have the procedures that what is going to be required of them. I think Washington State I read something yesterday where Washington State has passed a bill that sort of gives you the guidelines on how they're going to be utilize the body cameras. So real excited about 2016 and the opportunities ahead of us. And yes, you're right our story continues to get sexier all the time and we're going to do a better job of getting out there and telling the -- our investors, potential investors and the marketplace our story, at the same time, it would be real nice when our numbers can also do a lot of the talking for us.

Yes. And obviously, the existing shareholders as well. And the last one from me for you guys. We are the provider for Ferguson, Missouri, is that correct, they use our body cameras?

Correct.

Okay. I just want to clarify that. So Ferguson, Missouri, this is where it all started the spotlight on us. They used Digital Ally cameras?

Correct.

Awesome, guys. Great job. And I look forward to speaking to you in the future. Have a great day.

Thank you, guys.

Thanks Brian.

Listen, I think we are going to wrap this up. We've been on the call a little over an hour. Really appreciate everyone's participation, great questions that helped us cover areas that we were not hit in our opening remarks. But, again, like I said, it stops at there and want to revisit 2015, when you know how many hurdles that we had to over come. And again, I'm must really optimistic about 2016, and I think Tom's as well and everybody at Digital Ally, our team here is very excited. So, thanks for participating. If you have any other questions pop up, just give us a call here at corporate. Thank you all.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.