NOTE 8 – CONTRACTS IN PROGRESS

Costs and estimated earnings in excess of billings on uncompleted contracts represent accumulated project expenses and fees which have not been invoiced to customers as of the balance sheet date. These amounts are stated on the consolidated balance sheets as Unbilled Receivables and as of July 31, 2025 and October 31, 2024, these were $2,723,141 and $1,657,827, respectively.

Deferred Revenue as of July 31, 2025 and October 31, 2024, was $1,215,065 and $1,225,634, respectively, and consist of billings in excess of costs and payments received for future obligations such as supply of products or services or our warranty or Through Life Support (“TLS”) obligations undertaken as part of our contracts.

Sales of equipment include a provision for warranty obligations or TLS services. The contractual components relating to warranty and TLS are treated as deferred revenue over the corresponding period of the Company’s obligations under these deferred arrangements and are amortized over the relevant warranty or TLS period (12 months is our standard warranty contract obligation or for TLS 24, 36 or 60 months, depending on the contract) from the date of sale.

Deferred Revenue (“Current”) includes invoices paid by our customers in advance of delivery of products or services contracted, including technical support services to be delivered within twelve months, provision for warranty obligations which may arise in the twelve month period or the current portion of TLS obligations. Deferred Revenue was $1,215,065 and $1,225,634 as of July 31, 2025 and October 31, 2024, respectively.

CODA OCTOPUS GROUP, INC.

Notes to the Unaudited Consolidated Financial Statements

July 31, 2025 and October 31, 2024

NOTE 8 – CONTRACTS IN PROGRESS (Continued)

Deferred Revenue (“Current”) consisted of the following as of July 31, 2025 and October 31, 2024:

 SCHEDULE OF DEFERRED REVENUE

Deferred Revenue (“Non-Current”) includes customer prepaid TLS services for future performance. Deferred Revenue (“Non-Current”) was $75,064 and $56,121 as of July 31, 2025 and October 31, 2024 respectively.