NOTE 2 – CONTRACTS RECEIVABLE AND RETAINAGE

The principal customers of the Company include major and large independent oil and gas companies, marine companies, and their contractors. Of our contracts receivable balance at September 30, 2013, $54.5 million, or 72.3%, is with three customers. Projects for these three customers consist of a deepwater hull and deck for one customer, two separate deepwater deck facilities for another customer, and jacket, piles, deck and piping destined for the West African continental shelf for a third customer.

During the three month period ended September 30, 2013, the Company included a reserve for bad debt in the amount of $0.8 million in connection with a vessel upgrade and outfitting project.