Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 94

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 94
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 context of the contract, whereby the transfer of the services and the
products is separately identifiable from other promises in the contract. Our performance obligations consist of (i) products, (ii) professional
services, and (iii) extended warranties.

The transaction price is determined
based on the consideration to which we expect to be entitled in exchange for transferring services to the customer. Variable consideration
is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under
the contract will not occur. None of our contracts contain a significant financing component.

If the contract contains a single
performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple
performance obligations require an allocation of the transaction price to each performance obligation based on the relative standalone
selling price (“SSP”).

Revenue for our video solutions
segment is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service
to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount that reflects the consideration
that we expect to receive in exchange for our services. We generate all our revenue from contracts with customers.

Revenue for our revenue cycle
management segment is recorded on a net basis, as its primary source of revenue is its end-to-end service fees. These service fees are
reported as revenue monthly, upon completion of our performance obligation to provide the agreed upon services.

Revenue for our entertainment
segment is recorded on a gross or net basis based on management’s assessment of whether we are 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.

We sell our 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.
We act as the principal in these transactions as we own the ticket at the time of sale, therefore we control 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.

We also act as an intermediary
between buyers and sellers through the online secondary marketplace. Revenues derived from this marketplace primarily consist of service
fees from entertainment operations, and consists of one primary performance obligation, which is facilitating the transaction