Interview With CEO Stan Ross
Question: Your innovative technology is used by customers around the globe. Let's start off the interview with a brief overview of your products, and maybe mention some of the traction that you've generated over the years.
Answer: You know, Digital Ally is probably one of the leaders in the in-car video and body-camera business. Matter of fact, we were the very first ones to come out with a completely solid state system that's totally encapsulated in the rearview mirror. So, we have over six thousand active law enforcement agencies. We've expanded our business to where not only are we doing let's say for law enforcement, but we're also doing a lot of in-car and even body-cameras for commercial companies as well.
Question:Stan, what's the essential value proposition? Why should investors own your stock today?
Answer:You know, Digital Ally has been very innovative in it's technologies, and we stand to reap a quite a few rewards from these innovations. And, where I'm going with this is that we've been very successful in some of our patents. And these patents are now features that are being requested throughout the industry. One in particular being what we call our VuLink product, which is an auto-activation device. So, if an officer would turn on his lights to be pulling someone over, not only does it activate the in-car system but it activates the bodycam. And so we have the patent on that, and matter of fact, it's been very successful to the point that I would say well in excess of ninety percent of agencies that are now requesting body-cameras and in-car systems are looking for auto-activation. So that's just one of many patents that we have and pretty excited about.
Question: Why has auto-activation become the standard for law enforcement agencies?
Answer: Well I tell you, you know, it's one thing for a department not to have a body-camera. It's another thing for a police officer, police officer, to have a body-camera, but did not turn it on. So auto-activation is very crucial. Two reasons: one, you want to make sure all of your equipment is properly working, and two, you also want to make sure that your officer is paying attention to the incident that he's dealing with and not having to look for a button to push to activate his equipment.
Question: Now several large players in this space have allegedly infringed upon your intellectual property. You're pursuing litigation against these companies and last year you saw several victories on this front. Can you tell us more about these lawsuits?
Answer: We've had a tough battle. I mean, we've had some very very large corporations that have sat there and elected to just walk all over our patent, and hoping that they would be able to figure out a way to have our product either be invalidated, or hopefully being able to design around it. And, as of today, they've been unsuccessful. Matter of fact, the successes that you're talking about, several of the companies that we do have litigation with, have tried to in front of the patent office to have our patents invalidated, and were unsuccessful. Not only did they try once, but they tried on multiple occassions. And, again we were very successful. To the point now, that no longer will these challenges be taking place in the patent office. We now have the ability to get in front of a judge and jury, and take them to the court room and actually look for damages. And then take that a step further, this also will send a very very strong message to the industry that the rightful owners of auto-activation, you know the design hat we have, is that of Digital Ally's. So we think that the industry will be coming around, we think the damages that we could be seeing from those that did violate are very large, and there's a lot of value in that.
Question: A leading a body-camera manufacturer ]recently signed a deal for your VuLink product. Really, a commitment to purchase at least ten thousand units in 2018. Maybe just refresh you talked a little bit about it, maybe just tell us again. What is VuLink and what is this say about your underlying patents?
Answer: Yeah, so, you know, this this company is actually a competitor of ours. They do body-cameras, they actually have the contract for the body-cameras in New York and other large municipalities. They only do right now body-cameras, to where we acutally in-car video as well. So there's other opportunities over and above the VuLink. And again the VuLiink, what we did is they approached us, I politely asked them, why are you not just walking all over our patent like everyone else is trying. And they quickly said, well we've done our homework, and so rather not go down that path. So we've been selling the VuLink, which in an auto-activation for their body-cameras, we've made it so that it will utilize their equipment. And we also have a situation to where if they would need in-car systems, we could partner up with them on that as well. They're a very nice company, a good competitor, a nice little product, and so we think it's a nice relationship.
Question: How big's the overall market opportunity?
Answer: Wow. You know, the latest numbers that I've seen, you know, just in the body-camera side of things, you're probably two-hundred, three-hundred million a year, when you look at the hardware and the storage costs associated with it. And then you throw in in-car systems, which typically an in-car system will run I'm going to say six times as much as a body camera. So again, you know, you could easily throw in a few more hundred million dollars far as the market. And that's just law enforcement. What we're most excited about is the recent development in our commercial division. So you've got taxi cab drivers, you've got ambulance drivers. There's a tremendous amount of opportunities on the commercial division.
Question: In summary, why should investors take an interest in Digital Ally today?
Answer: Well I think we got a real real strong portfolio of products that are patent protected, and we have a very good path far as growth in the commercial division to where if you liked what we've done in law enforcement, I think you're going to be very pleased with what you see in our commercial division. We already are one of the providers or the largest providers in ambulance services, we've gotten a very big foothold in taxi cabs, I mean even Royal Caribbean cruise lines uses our body-cameras. So we think that the commercial side of our business could get to a run rate equal to law enforcement by the end of this year.