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Summary of Significant Accounting Policies (Policies)
6 Months Ended
Dec. 31, 2022
Summary of Significant Accounting Policies  
Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

These estimates and assumptions include estimates for reserves of uncollectible accounts, accruals for potential liabilities, assumptions made in valuing equity instruments issued for services or acquisitions, and realization of deferred tax assets.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivable. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company does not anticipate incurring any losses related to these credit risks. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and intends to maintain allowances for anticipated losses, as required.

Cash denominated in Euros and British Pounds with an aggregate US Dollar equivalent of $1,406,009 and $483,232 at December 31, 2022 and June 30, 2022, respectively, was held by Reprints Desk in accounts at financial institutions located in Europe.

The Company has no customers that represent 10% of revenue or more for the three and six months ended December 31, 2022 and 2021.

The Company has no customers that accounted for greater than 10% of accounts receivable at December 31, 2022 and June 30, 2022.

The following table summarizes vendor concentrations:

Three Months Ended

 

Six Months Ended

 

December 31, 

 

December 31, 

 

    

2022

  

  

2021

2022

  

  

2021

Vendor A

21

%

21

%

21

%

20

%

Vendor B

13

%

14

%

12

%

13

%

Revenue Recognition

Revenue Recognition

The Company accounts for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from two sources: annual licenses that allow customers to access and utilize certain premium features of our cloud-based SaaS research intelligence platform (“Platforms”) and the transactional sale of STM content managed, sourced and delivered through the Platform (“Transactions”).

Graphic

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

identify the contract with a customer;
identify the performance obligations in the contract;
determine the transaction price;
allocate the transaction price to performance obligations in the contract; and
recognize revenue as the performance obligation is satisfied.

Platforms

We charge a subscription fee that allows customers to access and utilize certain premium features of our Platform. Revenue is recognized ratably over the term of the subscription agreement, which is typically one year, provided all other revenue recognition criteria have been met. Billings or payments received in advance of revenue recognition are recorded as deferred revenue.

Transactions

We charge a transactional service fee for the electronic delivery of single articles, and a corresponding copyright fee for the permitted use of the content. We recognize revenue from single article delivery services upon delivery to the customer provided all other revenue recognition criteria have been met.

Revenue by Geographical Region

The following table summarizes revenue by geographical region:

Three Months Ended

 

December 31, 

 

2022

 

2021

United States

$

5,061,779

    

58.1

%  

$

4,603,421

58.5

%

Europe

 

2,963,155

 

34.0

%  

 

2,717,935

 

34.5

%

Rest of World

 

691,732

 

7.9

%  

 

550,931

 

7.0

%

Total

$

8,716,666

 

100

%  

$

7,872,287

 

100

%

Accounts Receivable by Geographical Region

The following table summarizes accounts receivable by geographical region:

As of December 31, 2022

 

As of June 30, 2022

United States

    

$

3,068,940

    

58.5

%  

$

3,255,976

62.0

%

Europe

 

1,645,037

 

31.4

%  

 

1,665,111

 

31.7

%

Rest of World

 

529,409

 

10.1

%  

 

330,458

 

6.3

%

Total

$

5,243,386

 

100

%  

$

5,251,545

 

100

%

Cost of Revenue

Cost of Revenue

Platforms

Cost of Platform revenue consists primarily of personnel costs of our operations team, and to a lesser extent managed hosting providers and other third-party service and data providers.

Transactions

Cost of Transaction revenue consists primarily of the respective copyright fee for the permitted use of the content, less a discount in most cases, and to a much lesser extent, personnel costs of our operations team and third-party service providers.

Stock-Based Compensation

Stock-Based Compensation

The Company periodically issues stock options and restricted stock awards to employees and non-employees for services. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.

Under ASC 718, Repurchase or Cancellation of equity awards, the amount of cash or other assets transferred (or liabilities incurred) to repurchase an equity award shall be charged to equity, to the extent that the amount paid does not exceed the fair value of the equity instruments repurchased at the repurchase date. Any excess of the repurchase price over the fair value of the instruments repurchased shall be recognized as additional compensation cost.

Foreign Currency

Foreign Currency

The accompanying condensed consolidated financial statements are presented in United States dollars, the functional currency of the Company. Capital accounts of foreign subsidiaries are translated into US Dollars from foreign currency at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rate as of the balance sheet date. Income and expenditures are translated at the average exchange rate of the period. Although the majority of our revenue and costs are in US dollars, the costs of Reprints Desk Latin America and ResSoL LA are in Mexican Pesos. As a result, currency exchange fluctuations may impact our revenue and the costs of our operations. We currently do not engage in any currency hedging activities.

Gains and losses from foreign currency transactions, which result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated, are included in selling, general and administrative expenses and amounted to gain of $84,179 and $11,663 for the three and six months ended December 31, 2022, respectively and losses of $11,982 and $23,225 for the three and six months ended December 31, 2021, respectively. Cash denominated in Euros and British Pounds with an aggregate US Dollar equivalent of $1,406,009 and $483,232 at December 31, 2022 and June 30, 2022, respectively, was held in accounts at financial institutions located in Europe.

The following table summarizes the exchange rates used:

Six Months Ended

 

Year Ended

December 31, 

 

June 30, 

    

2022

    

2021

 

2022

    

2021

Period end Euro : US Dollar exchange rate

1.07

1.13

1.05

1.19

Average period Euro : US Dollar exchange rate

 

1.01

 

1.17

1.13

 

1.19

Period end GBP : US Dollar exchange rate

1.21

1.35

1.21

1.38

Average period GBP : US Dollar exchange rate

 

1.17

 

1.37

1.34

 

1.34

 

 

 

Period end Mexican Peso : US Dollar exchange rate

 

0.05

 

0.05

0.05

 

0.05

Average period Mexican Peso : US Dollar exchange rate

 

0.05

 

0.05

0.05

 

0.05

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is antidilutive. At December 31, 2022 potentially dilutive securities include options to acquire 3,070,224 shares of common stock and unvested restricted common stock of

2,300,283. At December 31, 2021 potentially dilutive securities include options to acquire 3,272,850 shares of common stock and unvested restricted common stock of 345,726. The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period.

The computation of basic and diluted net loss per common share is the same for the three and six months ended December 31, 2022 and 2021 because all stock options, warrants, and unvested restricted common stock are anti-dilutive.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning July 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Deferred Revenue

Deferred Revenue

Contract liabilities, such as deferred revenue, exist where the Company has the obligation to transfer services to a customer for which the entity has received consideration, or when the consideration is due, from the customer.

Cash payments received or due in advance of performance are recorded as deferred revenue. Deferred revenue is primarily comprised of cloud-based software subscriptions which are generally billed in advance. The deferred revenue balance is presented as a current liability on the Company's consolidated balance sheets.