Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 189

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 189
---
 customer;

    (ii)
    Identify the performance obligations in the contract;

    (iii)
    Determine the transaction price;

    (iv)
    Allocate the transaction price to the performance obligations in the contract; and

    (v)
    Recognize revenue when a performance obligation is satisfied.

55

We consider the terms and conditions
of the contract and our customary business practices in identifying our contracts under ASC 606. We determine we have a contract when
the customer order is approved, we can identify each party’s rights regarding the services to be transferred, we can identify the
payment terms for the services, we have determined the customer has the ability and intent to pay and the contract has commercial substance.
At contract inception we evaluate whether the contract includes more than one performance obligation. We apply judgment in determining
the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment
experience or, in the case of a new customer, credit and financial information pertaining to the customer.

Performance obligations promised
in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of
being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily
available from third parties or from us, and are distinct in the 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