Company: DKI
Filing Date: 2025-04-25
Form Type: DRS/A
Source: 0001641172-25-006135
Chunk: 107

Company: DarkIris Inc.
Filing Date: 2025-04-25
Form: DRS/A
Chunk 107
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 recognition for performance obligation(s) in the contract with a customer. Revenue recorded with the Company acting in
the capacity of a principal is reported on a gross basis equal to the full amount of consideration to which we expect in
exchange for the good or service transferred. Revenue recorded with the Company acting in the capacity of an agent is reported on a net
basis, exclusive of any consideration provided to the principal party in the transaction.

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The Company principal business is the development,
publishing and operating mobile digital games via various third-party digital storefronts. Revenue is primarily derived from sales of
mobile in-app purchases, virtual goods and downloadable content that can be purchased by the end users, as desired. When control of the
promised products and services is transferred to the customers, the Company recognizes revenue in the amount that reflects the consideration
it expects to receive in exchange for these products and services. Revenue from delivery of products is recognized at a point in time
when the end consumers download the virtual goods and content.

Principal vs Agent Consideration

The Company offers certain software products
via third-party digital storefronts, such as the Apple App Store and the Google Play Store. For sales of our software products via third-party
digital storefronts and retail distributor, we determine whether or not we are acting as the principal in the sale to the end user, which
we consider in determining if revenue should be reported based on the gross transaction price to the end user or based on the transaction
price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or service before
it is transferred to the customer. Key indicators that we use in evaluating these sales transactions include, but are not limited to,
the following:

| ● | The underlying contract terms and conditions between the various parties                   
 to the transaction;                                                                        |
| ● | Which                                                                                      
 party is primarily responsible for fulfilling the promise to provide the specified good or 
 service; and                                                                               |
| ● | Which                                                                                      
 party has discretion in establishing the price for the specified good or service.          |

Based on evaluation of the above indicators, for sales arrangements via the Apple App Store, the Google Play Store, and other third party digital platforms, the Company has discretion in establishing the price for the specified good or service and the Company determined that the Company is the principal to the end user and thus report revenue on a gross basis and mobile platform fees charged by these digital storefronts are expensed as incurred and reported within cost of revenues.

For