NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Depreciation expense for the three months ended September 30, 2024 and 2023 was $190,332 and $235,999, respectively. Depreciation expense for the nine months ended September 30, 2024 and 2023 was $424,637 and $648,624, respectively. As of September 30, 2024, there was $619,793 of net property and equipment located in Israel.

As of September 30, 2024, the Company reclassed $2,289,539 of docking stations and drones, net into inventory, as OAS has shifted their focus from service revenue, selling a data subscription service to its customers based on the information collected by their autonomous systems, to product revenue, primarily selling their Optimus System™ and Iron Drone Raider™.

In connection with the American Robotics sublease effective January 15, 2024, see Note – 2 Summary of Significant Account Policies, Leases, the Company recorded an impairment charge of $1,127,769, related to the Leasehold improvements and Furniture and fixtures associated with the Asset Group, was recognized in Operating expenses in the Consolidated Statements of Operations for the year ending December 31, 2023, included in our 2023 Form 10-K. There was no indication of impairment for the nine months ended September 30, 2024.