NOTE 7 – 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 date of the balance sheet. These amounts are stated on the consolidated balance sheets as Unbilled Receivables of $3,733,116 and $3,406,693 as of July 31, 2017 and October 31, 2016, respectively.

Our Deferred Revenue of $315,880 and $464,541 as of July 31, 2017 and October 31, 2016, respectively, consists of billings in excess of costs and revenues received as part of our warranty and Through Life Support obligations upon completing a sale of our products– elaborated further in the last paragraph of this note.

Billings in excess of cost and estimated earnings on uncompleted contracts represent project invoices billed to customers that have not been earned as of the date of the balance sheets. These amounts are stated on the balance sheets as a component of Deferred Revenue of $0 as of July 31, 2017 and October 31, 2016, respectively.

Revenue received as part of sales of equipment includes a provision for warranty and is recorded as deferred revenue and Through Life Support (a support package offering three and five years hardware, software and technical support of products purchased). These amounts are amortized according to the contractual period in question which is over 12 months for warranty obligations and 36 months or 60 months for Through Life Support obligations, according to the package purchased by our customers. The short-term portions of the deferred revenues were $267,369 and $464,541 as of July 31, 2017 and October 31, 2016, respectively. The long-term portions of the deferred revenues were $48,511 and $0 as of July 31, 2017 and October 31, 2016 respectively.