Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 251

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 251
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 warrant derivative liabilities;

    ●
    Stock-based
    Compensation Expense; and

    ●
    Accounting
    for Income Taxes.

Revenue
Recognition / Allowances for Doubtful Accounts. Revenue is recognized for the shipment of products or delivery of service when
all five of the following conditions are met:

    (i)
    Identify
    the contract with the 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.

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.

53

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