NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Depreciation expense for the years ended December 31, 2024 and 2023 was $602,304 and $844,833, respectively. For the years ended December 31, 2024 and 2023, the Company recognized a loss on disposal of Computer equipment of $1,578 and $52,595, respectively. Loss on disposal of assets is included in Other income (expense), net in the Company’s Consolidated Statements of Operations for the years ended December 31, 2024 and 2023. As of December 31, 2024, there was $600,339 of net property and equipment located in Israel.

In 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 December 2023, the Company identified a change in circumstances in connection with the American Robotics sublease effective January 15, 2024, see Note – 2 Summary of Significant Account Policies, Leases, which indicated that the carrying amount of the right of use assets, leasehold improvements, and remaining furniture and fixtures in Waltham, Massachusetts (the “Asset Group”) may not be recoverable. As a result, the Company recorded an impairment charge of $1,127,769 related to the leasehold improvements and furniture and fixtures associated with the Asset Group, which is included in General and administrative expenses in the Company’s Consolidated Statements of Operations for the year ended December 31, 2023. There was no indication of impairment for the year ended December 31, 2024.