Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 111

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 111
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. Revenue is recognized upon shipment of the
product and acceptance of the service or materials by the end customer for repair services. Revenue for extended warranty, cloud service
or other software-based products is over the term of the contract warranty or service period. A time-elapsed method is used to measure
progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to these
revenues is generally recognized on a straight-line basis over the contract term, as long as the other revenue recognition criteria have
been met.

    9

The Company’s multiple performance
obligations may include future in-car or body-worn camera devices to be delivered at defined points within a multi-year contract, and
in those arrangements, the Company allocates total arrangement consideration over the life of the multi-year contract to future deliverables
using management’s best estimate of selling price.

Revenue Cycle Management

The Company reports revenue cycle
management revenues on a net basis, as its primary source of revenue is its end-to-end service fees which is generally determined as a
percentage of the invoice amounts collected. These service fees are reported as monthly revenue upon completion of the Company’s
performance obligation to provide the agreed upon service.

Entertainment

The Company reports ticketing
revenue on a gross or net basis based on management’s assessment of whether the Company is acting as a principal or agent in the
transaction. The determination is based upon the evaluation of control over the event ticket, including the right to sell the ticket,
prior to its transfer to the ticket buyer.

The Company sells tickets held
in inventory, which consists of one performance obligation, being to transfer control of an event ticket to the buyer upon confirmation
of the order. The Company acts as the principal in these transactions as the ticket is owned by the Company at the time of the sale, therefore
controlling the ticket prior to transferring to the customer. In these transactions, revenue is recorded on a gross basis based on the
value of the ticket and is recognized when an order is confirmed. Payment is typically due upon delivery of the ticket.

The Company also acts as an intermediary
between buyers and sellers through online secondary marketplace. Revenues derived from this marketplace primarily consist of service fees
from ticketing operations, and consists of one primary performance obligation, which is facilitating the transaction between the buyer
and seller, being satisfied at the time the order has been confirmed. As the Company does not control the ticket prior to the transfer,
the Company acts as an agent in these