CONTRACT ASSETS AND LIABILITIES

6 Months Ended

Mar. 31, 2026

NOTE 16 – CONTRACT ASSETS AND LIABILITIES

Project contracts typically provide for a schedule of billings on percentage of completion of specific tasks inherent in the fulfillment of the Company’s performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statements of operations can and usually does differ from amounts that can be billed to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceeds cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in the unaudited condensed consolidated balance sheets under the caption “Contract assets.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized are reflected as a current liability in the unaudited condensed consolidated balance sheets under the caption “Contract liabilities.” Conditional retainage represents the portion of the contract price withheld until the work is substantially complete for assurance of the Company’s obligations to complete the job.

The following is a summary of the Company’s uncompleted contracts:

	March 31, 2025			September 30, 2025
Costs incurred on uncompleted contracts	$	21,695,817		$	10,344,923
Estimated gross profit		6,457,872			4,025,531
		28,153,689			14,370,454
Applicable billings to date		(28,293,504	)		(15,045,345	)
Net earnings in excess of billings/(billing in excess of costs)	$	(139,815	)	$	(674,891	)

For the three and six months ended March 31, 2026, and 2025, the Company recognized revenue of $130,471 and $342,725, and $1,402,348 and $1,103,156, respectively, that was previously included in the beginning balance of contract liabilities.

The following table summarizes the net activity of the contract assets and contract liabilities for the three and six months ended March 31, 2026, and 2025.

	March 31, 2026			March 31, 2025			March 31, 2026			March 31, 2025
	For the three months ended						For the six months ended
	March 31, 2026			March 31, 2025			March 31, 2026			March 31, 2025
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
Contract asset, beginning balance	$	1,697,691		$	1,541,241		$	980,164		$	985,207
Changes in revenue billed, contract price or cost estimates		(151,007	)		(384,621	)		566,520			171,413
Contract assets acquired in acquisition		661,885			-			661,885			-
Contract asset, net, ending balance	$	2,208,569		$	1,156,620		$	2,208,569		$	1,156,620
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts
Contract liability, beginning balance		(1,542,262	)	$	(1,279,187	)		(1,655,055	)	$	(1,254,204	)
Changes in revenue billed, contract price or cost estimates		(273,585	)		(645,238	)		(160,792	)		(670,221	)
Contract liabilities acquired in acquisition		(532,537	)		-			(532,537	)		-
Contract liability, ending balance	$	(2,348,384	)	$	(1,924,425	)	$	(2,348,384	)	$	(1,924,425	)
Net Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts
Net billings in excess of costs, beginning balance	$	155,429		$	262,054		$	(674,891	)	$	(268,997	)
Changes in revenue billed, contract price or cost estimates		(424,592	)		(1,029,859	)		405,728			(498,808	)
Net billings in excess of costs acquired in acquisition		129,348			-			129,348			-
Net (earnings in excess of billings)/costs in excess of billings, ending balance	$	(139,815	)	$	(767,805	)	$	(139,815	)	$	(767,805	)