Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 173

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 173
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    Sales to international customers are made through independent distributors who purchase products from us at a wholesale price and sell to the end user (typically law enforcement agencies or a commercial customer) at a retail price. The distributor retains the margin as compensation for its role in the transaction. The distributor generally maintains product inventory, customer receivables and all related risks and rewards of ownership. Revenue is recorded when the product is shipped to the distributor consistent with the terms of the distribution agreement.

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    Repair parts and services for domestic and international customers are generally handled by our inside customer service employees. Revenue is recognized upon shipment of the repair parts and acceptance of the service or materials by the end customer.

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Our revenue cycle management operating segment sells
its services to customers in the following manner:

    ●
    Our revenue cycle management operating segment generates service revenues through relationships with medium to large healthcare organizations, in which the underlying service revenue is recognized upon execution of services. Service revenues are generally determined as a percentage of the dollar amount of medical billings collected by the customer. 

Our entertainment operating segment sells our products
and services to customers in the following manner:

    ●
    Our entertainment operating segment generates product revenues from the sale of tickets directly to consumers for a particular event that the entertainment operating segment has previously purchased and held in inventory for ultimate resale to the end consumer. Service sales through TicketSmarter are driven largely in part to the usage of the TicketSmarter.com marketplace by buyers and sellers, in which the Company collects service fees for each transaction completed through this platform.

We may discount our prices on
specific orders based upon the size of the order, the specific customer and the competitive landscape.

Product revenues by operating
segment is as follows:

    Three Months Ended March 31, 

    2025  
    2024 
  
    Product Revenues: 

    Video Solutions 
    $54,231  
    $721,188 
  
    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     667,119  
     844,658 
  
    Total Product Revenues 
    $721,350  
    $1,565,846 

Product revenues for the three months ended March
31, 2025 and 2024 were $721,350 and $1,565,846, respectively, a decrease of $844,496 (53.9%), due to the following factors:

    ●
    Revenues