Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 203

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 8
Chunk 203
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, for which we recognize our net service fees.

44

Entertainment
Operating Segment - We also entered the live entertainment and events ticketing services through the formation of our wholly
owned subsidiary, TicketSmarter and its completed acquisitions of Goody Tickets, LLC and TicketSmarter, LLC, on September 1, 2021.
TicketSmarter provides ticket sales, partnerships, and mainly, ticket resale services through its online ticketing marketplace for
live events, TicketSmarter.com. TicketSmarter offers tickets for over 125,000 live events throughout the country through its
platform, including concerts, sporting events, theatres, and performing arts. We also began offering production and promotion
services in relation to live music events in third-party venues throughout the country through our Kustom Entertainment, Inc. subsidiary. These services begin with the logistical
matters of an event, including artist booking and research, ticketing, staging, on-site operations, vendor sourcing, and day of
production.

Our entertainment operating
segment consists of entertainment services provided through TicketSmarter and its online platform, TicketSmarter.com. Revenues of this
segment include ticketing service charges generally determined as a percentage of the face value of the underlying ticket and ticket sales
from our ticket inventory which are recognized when the underlying tickets are sold. Entertainment direct expenses include the cost of
tickets purchased for resale by the Company and held as inventory, credit card fees, ticketing platform expenses, website maintenance
fees, as well as other administrative costs.

Off-Balance Sheet Arrangements

We do not have any off-balance
sheet debt, nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with
any unconsolidated entities or other persons that may have a material current or future effect on financial conditions, changes in the
financial conditions, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue
or expenses other than the following:

We are a party to operating
leases and license agreements that represent commitments for future payments, and we have issued purchase orders in the ordinary course
of business that represent commitments to future payments for goods and services.

Comparison of the Three Months Ended June
30, 2025 and 2024

Summary Financial Data

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

    Three Months Ended June 30,