Note 3 - Revenue Recognition

12 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(3) Revenue Recognition

Monitoring and Other Related Services. Monitoring services include two components: (i) lease contracts pursuant to which the Company provides monitoring services and lease devices to distributors or end users and the Company retains ownership of the leased device; and (ii) monitoring services purchased by distributors or end users who have previously purchased monitoring devices and opt to use the Company’s monitoring services. Sales of devices and leased GPS devices are required to use the Company’s monitoring service and both the GPS leased devices and monitoring services are accounted for as a single performance obligation. Monitoring revenue is recognized ratably over time, as the customer simultaneously receives and consumes the benefit of these services as they are performed. Payment due or received from the customers prior to rendering the associated services are recorded as deferred revenue.

The balance of accounts receivable at September 30, 2023 of $4,536,916 includes an unbilled balance of $490,848. The balance of accounts receivable at September 30, 2022 of $6,236,555 includes an unbilled balance of $777,514, and the balance of accounts receivable at October 1, 2021 of $7,163,615 includes an unbilled balance of $420,697. The balance of the deferred revenue at September 30, 2023, September 30, 2022 and October 1, 2021 was $431, $3,299, and $22,500 respectively, and were included in accrued liabilities on the Consolidated Balance Sheets. The Company recognized $12,928 and $120,958 of deferred revenue in the fiscal years ended September 30, 2023 and September 30, 2022, respectively. 

Product Sales and Other. The Company sells devices and replacement parts to customers under certain contracts, as well as law enforcement software licenses and maintenance, and analytical software. Revenue from the sale of devices and parts is recognized upon their transfer of control to the customer, which is generally upon delivery. Delivery is considered complete at either the time of shipment or arrival at destination, based on the agreed upon terms within the contract. Payment terms are generally 30 days from the invoice date.

Multiple Element Arrangements. The majority of our revenue transactions do not have multiple elements. However, on occasion, the Company may enter revenue transactions that have multiple elements. These may include different combinations of products or services that are included in a single billable rate. These products or services are delivered over time as the customer utilizes our services. In cases where obligations in a contract are distinct and thus require separation into multiple performance obligations, revenue recognition guidance requires that contract consideration be allocated to each distinct performance obligation based on its relative standalone selling price. The value allocated to each performance obligation is then recognized as revenue when the revenue recognition criteria for each distinct promise or bundle of promises has been met. There were no multiple element arrangements for the years ended September 30, 2023 and 2022.

The standalone selling price for each performance obligation is an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the good or service. When there is only one performance obligation associated with a contract, the entire sale value is attributed to that obligation. When a contract contains multiple performance obligations the transaction value is first allocated using the observable price, which is generally a list price, net of applicable discount, or the price used to sell in similar circumstances. In circumstances when a selling price is not directly observable, the Company will estimate the standalone selling price using information available to us. 

The following tables present the Company’s revenue disaggregated by geography, based on management’s assessment of available data:

	Year Ended September 30, 2023					Year Ended September 30, 2022
	Total Revenue		% of Total Revenue			Total Revenue		% of Total Revenue
United States	$	24,295,601		71	%	$	26,427,402		72	%
Latin America		9,370,160		27	%		9,389,482		25	%
Other		810,104		2	%		1,151,615		3	%
Total	$	34,475,865		100	%	$	36,968,499		100	%

The above table includes total revenue for the Company, of which monitoring and other related services is the majority (approximately 97% for fiscal years ended September 30, 2023 and 2022) of the Company’s revenue. Latin America includes Bahamas, Chile, Mexico, Puerto Rico and the U.S. Virgin Islands. Other includes Canada, New Zealand, Saudi Arabia, South Africa, the United Kingdom and Vietnam.