Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 190

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 8
Chunk 190
---
 liabilities recognized during the measurement period that ended March 1, 2025, the amounts of assets
or liabilities previously recognized on a preliminary basis are now final.

NOTE 17. OPERATING 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.

    38

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