Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 203

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 203
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 SEGMENTS

The
Company adopted ASU 2023-07 in 2024 and applied the amendment retrospectively to all periods presented in the Company’s condensed
consolidated financial statements. Segment financial information is prepared in accordance with GAAP and our significant accounting policies
described in Note 1. Resources are allocated and performance is assessed using segment operating income by our Chief Executive Officer,
whom we have determined to be our Chief Operating Decision Maker (“CODM”). Our CODM utilizes segment operating income when
making decisions about allocating capital and personnel to the segments, predominantly in the annual budget and quarterly forecasting
processes. In addition, our CODM uses operating income, including comparison of actual results to budget and forecast, in assessing the
performance of each segment and in evaluating product pricing, distribution strategies and marketing investments. Our CODM reviews balance
sheet information at a consolidated level. We compute segment operating income based on net sales revenue, less cost of goods sold, SG&A,
asset impairment charges and restructuring charges. The SG&A used to compute each segment’s operating income is directly associated
with the segment. We do not allocate non-operating income and expense, including interest or income taxes, to operating segments.

We
operate in three strategic business segments. The Video Solutions Segment encompasses our law, commercial, and shield divisions. This
segment includes both service and product revenues through our subscription models offering cloud and warranty solutions, and hardware
sales for video and health safety solutions. The Revenue Cycle Management Segment provides working capital and back-office services to
a variety of healthcare organizations throughout the country, as a monthly service fee. The Entertainment Segment acts as an intermediary
between ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary
sellers to then sell through various platforms.

The
Company’s corporate administration activities are reported in the corporate line item. These activities primarily include expense
related to certain corporate officers and support staff, certain accounting staff, expense related to the Company’s Board of Directors,
stock option expense for options granted to corporate administration employees, certain consulting expenses, investor relations activities,
and a portion of the Company’s legal, auditing and professional fee expenses. Corporate identifiable assets primarily consist of
cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes.

Summarized
financial information for the Company’s reportable business segments is provided for the three months ended September 30, 2025,
and 2024: