Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 305

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 305
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 customer that
are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources
that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the
services and the products is separately identifiable from other promises in the contract. Our performance obligations consist of (i)
products, (ii) professional services, and (iii) extended warranties.

The
transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring services to
the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future
reversal of cumulative revenue under the contract will not occur. None of our contracts contain a significant financing component.

53

If
the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation
based on the relative standalone selling price (“SSP”).

Revenue
for our video solutions segment is recognized at the time the related performance obligation is satisfied by transferring the control
of the promised service to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount
that reflects the consideration that we expect to receive in exchange for our services. We generate all our revenue from contracts with
customers.

Revenue
for our revenue cycle management segment is recorded on a net basis, as its primary source of revenue is its end-to-end service fees.
These service fees are reported as revenue monthly, upon completion of our performance obligation to provide the agreed upon services.

Revenue
for our entertainment segment is recorded on a gross or net basis based on management’s assessment of whether we are acting as
a principal or agent in the transaction. The determination is based upon the evaluation of control over the event ticket, including the
right to sell the ticket, prior to its transfer to the ticket buyer.

We
sell our 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. We act as the principal in these transactions as we own the ticket at the time of sale, therefore
we control 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