Note 5 — Solar project portfolio and deferred-construction obligation

The Company owns the residential solar systems it develops and capitalizes them at milestone-weighted cost under ASC 360 (gross profit excluded), recognized as projects advance through five milestones (NTP, designs, permit, install, PTO). The matching construction obligation is a deferred-construction liability payable on receipt of the Investment Tax Credit; additions are non-cash. Systems for which revenue has not yet been recognized remain capitalized; revenue is recognized as described in Note 7, and on recognition the capitalized milestone-weighted cost of the related systems is released to cost of revenue. The three and six months ended March 31, 2026 include cost releases of $1,289,448 and $1,486,889 respectively (schedule-listed projects at their scheduled 67% cost; other Thrive-funded projects at the 62% cost assessed by management; both pending project-level remittance detail and installer-invoice support) and a $49,064 impairment of capitalized costs on the four projects declined in financing underwriting (ASC 340-40-35-3).