Company: DKI
Filing Date: 2025-03-17
Form Type: DRS
Source: 0001493152-25-010539
Chunk: 198

Company: DarkIris Inc.
Filing Date: 2025-03-17
Form: DRS
Chunk 198
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 be purchased by the end users, as desired. When control of the promised products and services is transferred to the customers, the Company recognizes revenue in the amount that reflects the consideration it expects to receive in exchange for these products and services. Revenue from delivery of products is recognized at a point in time when the end consumers download the virtual goods and content.

Principal vs Agent Consideration

The Company offers certain software products via third-party digital storefronts, such as the Apple App Store and the Google Play Store. For sales of our software products via third-party digital storefronts and retail distributor, we determine whether or not we are acting as the principal in the sale to the end user, which we consider in determining if revenue should be reported based on the gross transaction price to the end user or based on the transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or service before it is transferred to the customer. Key indicators that we use in evaluating these sales transactions include, but are not limited to, the following:

| ● | The                                                                                        
 underlying contract terms and conditions between the various parties to the transaction;   |
| ● | Which                                                                                      
 party is primarily responsible for fulfilling the promise to provide the specified good or 
 service; and                                                                               |
| ● | Which                                                                                      
 party has discretion in establishing the price for the specified good or service.          |

Based on evaluation of the above indicators, for sales arrangements via the Apple App Store, the Google Play Store, and other third party digital platforms, the Company has discretion in establishing the price for the specified good or service and the Company determined that the Company is the principal 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 years ended September 30, 2024 and 2023, 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 $665,471 and $328,914, and game revenue sharing of $40,330 and nil from distribution as of September 30, 2024 and 2023, respectively, consist primarily of the unsatisfied performance obligations as of the balance sheet dates. During the year ended September 30,