Company: DKI
Filing Date: 2025-07-29
Form Type: F-1/A
Source: 0001641172-25-021310
Chunk: 214

Company: DarkIris Inc.
Filing Date: 2025-07-29
Form: F-1/A
Chunk 214
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 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 the six months ended March 31, 2025 and 2024, there was no revenue recognized on a net basis where the Company is acting as an agent.

| F-11 |

Contract balances and remaining performance obligations

Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs.

The Company’s contract liabilities include unused in-game credit of $790,730 and $665,471, and game revenue sharing of $38,968 and $40,330 from distribution as of March 31, 2025 and September 30, 2024, respectively, consist primarily of the unsatisfied performance obligations as of the balance sheet dates. For the six months ended March 31, 2025 and 2024, $705,801 and $328,914 were recognized in revenue, respectively.

Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making Company, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company has determined that there is only one reportable operating segment.

Cost of revenue

Cost of revenue consists primarily of platform handling fees, revenue sharing with game developers, and cloud server costs.

Selling expenses

Selling expenses mainly include advertising expenses for promoting mobile digital games.

Government grants

Government subsidy income represent cash subsidies received from PRC government. Cash subsidies which have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized when received.