(11) MONITORING EQUIPMENT

The Company leases monitoring equipment to agencies for offender tracking under contractual service agreements. The monitoring equipment is depreciated using the straight-line method over an estimated useful life of between three to five years for monitoring devices. Monitoring equipment as of June 30, 2026 and September 30, 2025 is as follows:

Depreciation expense for the three months ended June 30, 2026 and 2025 was $443,340 and $446,796, respectively. Depreciation expense for the nine months ended June 30, 2026 and 2025 was $1,379,024 and $1,339,318, respectively. This expense was classified as a cost of revenue in the Condensed Consolidated Statements of Operations.

During the three months ended June 30, 2026 and 2025, the Company recorded charges of $49,090 and $42,999, respectively, for devices that were lost, stolen or damaged, and $3,525 and $45,588 for devices that were sold. During the nine months ended June 30, 2026 and 2025, the Company recorded charges of $197,215 and $162,108, respectively, for devices that were lost, stolen or damaged, and $3,525 and $106,109 for devices that were sold. Product sales and lost, stolen and damaged items are expensed in Monitoring, products and other related services in the Condensed Consolidated Statements of Operations.