Deferred Contract Costs

3 Months Ended

Mar. 31, 2026

Note 3. Deferred Contract Costs

Deferred contract costs consisted of the following as of:

	March 31, 2026			December 31, 2025
Deferred Contract Costs - Short-Term	$	374,375		$	310,673
Deferred Contract Costs - Long-Term Adjustment		93,594			161,047
Expense as of March 31, 2026		(93,594	)		(97,345	)
Total Short-Term Contract	$	374,375		$	374,375

Deferred Contract Costs - Long-Term	$	488,695		$	738,368
Deferred Contract Costs - Short-Term Adjustment		(93,593	)		(161,047	)
Expense as of March 31, 2026		-			(88,626	)
Total Long-Term Contract	$	395,102		$	488,695

Total Deferred Contract Costs	$	769,477		$	863,070

During the year ended December 31, 2025, the Company entered into a customer agreement that includes development services and a three-year step-priced arrangement. The consideration under the agreement is structured to recover development and other fulfillment costs over the full contract term. In accordance with ASC 340-40, the Company capitalized costs incurred that (i) relate directly to the contract, (ii) generate or enhance resources that will be used in satisfying performance obligations in future periods, and (iii) are expected to be recovered through the transaction price. Capitalized costs primarily include internal and third-party development labor and materials.

Deferred contract costs are amortized on a systematic basis consistent with the pattern of transfer of the related services, which the Company currently estimates to be over the three-year contractual term. The Company evaluates deferred contract costs for impairment each reporting period.

At March 31, 2026 and 2025, deferred contract costs totaled $769,477 and $0, respectively, of which $374,375 and $0 were classified as current. Amortization expense recognized in cost of revenues was $93,594 and $0 for the years ended March 31, 2026 and 2025, respectively. No impairment losses were recognized during the periods presented.