Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 19

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 of the multi-year
contract to future deliverables using management’s best estimate of selling price.

    8

Revenue
Cycle Management

The
Company reports revenue cycle management revenues on a net basis, as its primary source of revenue is its end-to-end service fees which
is generally determined as a percentage of the invoice amounts collected. These service fees are reported as monthly revenue upon completion
of the Company’s performance obligation to provide the agreed upon service.

Entertainment

The
Company reports ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as
a principal or agent in the transaction. The determination is based upon the evaluation of control over the underlying ticket, including
the right to sell the ticket, prior to its transfer to the ticket buyer.

The
Company sells 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. The Company acts as the principal in these transactions as the ticket is owned by the Company
at the time of the sale, therefore controlling 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.

The
Company also acts as an intermediary between buyers and sellers through online secondary marketplace. Revenues derived from this marketplace
primarily consist of service fees from ticketing operations, and consists of one primary performance obligation, which is facilitating
the transaction between the buyer and seller, being satisfied at the time the order has been confirmed. As the Company does not control
the ticket prior to the transfer, the Company acts as an agent in these transactions. Revenue is recognized on a net basis, net of the
amount due to the seller when an order is confirmed, the seller is then obligated to deliver the tickets to the buyer per the seller’s
listing. Payment is due at the time of sale.

Other

Deferred
revenue includes payments received in advance of performance under the contract and are reported separately as current liabilities and
non-current liabilities in the Condensed Consolidated Balance Sheets. Such amounts consist of extended warranty contracts, prepaid cloud
services and prepaid installation services and are generally recognized as the respective performance obligations are satisfied. During
the nine months ended September 30, 2025, the Company recognized revenue of $4,189,321 related to its deferred revenue. Total deferred
revenue