Note 2.   Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles (“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 consolidated 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, the valuation of goodwill and intangible assets related to the Company’s acquisitions, accruals for contingent earnout liabilities, assumptions made in valuing equity instruments issued for services or acquisitions, and realization of deferred tax assets.

Cash and Cash Equivalents

The Company defines cash equivalents as all highly liquid debt instruments purchased with an original maturity of three months or less. In all periods presented, cash equivalents consist primarily of money market funds.

Allowance for Credit Losses

The Company’s trade accounts receivable are recorded at amounts billed to customers and presented on the consolidated balance sheet net of the allowance for estimated credit losses, and typically due within 30 days. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses, the Company’s forecast and an overall assessment of trade accounts receivable outstanding. The Company established an allowance for doubtful accounts of $103,217 and $182,324 as of June 30, 2026 and 2025, respectively. The Company recorded a credit to bad debt expense of approximately $23,000 in the year ended June 30, 2026 and a bad debt expense of approximately $141,000 in the year ended June 30, 2025. The Company had write-offs of approximately $56,000 and $49,000 in the years ended June 30, 2026 and 2025, respectively, which reduced the allowance for doubtful accounts.

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, British Pounds and Japanese Yen with an aggregate US Dollar equivalent of $779,978 and $426,658 at June 30, 2026 and 2025, respectively, was held by Reprints Desk in accounts at financial institutions.

The Company has no customers that represent 10% of revenue or more for the years ended June 30, 2026 and 2025.

The Company has no customers that represent 10% of accounts receivable at June 30, 2026 and 2025.

The following table summarizes vendor concentrations for content cost:

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Software Costs

Based on its nature, the Company’s software development costs are expensed as incurred. The finalization of the Company’s project development process precipitates the rapid commercialization and deployment of new products and enhancements. The Company continuously reviews its projects, processes and the nature of its software development costs to determine if there are changes that would meet the requirements for capitalization under Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software.

Research and Development Costs

The Company’s research and development costs are primarily comprised of technology and product development  personnel and cloud computing service costs. The total research and development costs during the years ended June 30, 2026 and 2025 were $3,132,876 and $2,530,959, respectively and were included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income.

Advertising Costs

The Company’s advertising costs are expensed as incurred in accordance with ASC 720-35, Advertising Costs. The total advertising expense during the years ended June 30, 2026 and 2025 were $1,567,919 and $1,630,259, respectively, and were included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of 3 to 5 years. Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. Gains and losses on disposals are included in the consolidated statements of operations and comprehensive income.

Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. For the years ended June 30, 2026 and 2025, the Company did not recognize any impairments for its property and equipment.

Long-lived Assets

The Company reviews all long-lived assets, including property and equipment and finite-lived intangible assets, for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations and comprehensive income. For the years ended June 30, 2026 and 2025, the Company did not recognize any impairments for its long-lived assets.

Revenue Recognition

The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“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 or monthly licenses that allow customers to access and utilize certain premium features of our cloud-based SaaS research intelligence platforms and the transactional sale of STM content managed, sourced and delivered through the Platform. In the years ended June 30, 2026 and 2025, the Company recognized revenue of $9,254,008 and $7,248,767 that was included in the deferred revenue at the beginning of each respective period. This revenue was recorded for the fulfillment of performance obligations related to cloud-based software subscriptions. Deferred revenue and accounts receivable, net were $9,023,848, and $6,879,800 as of June 30, 2024, respectively.

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:

Platforms

We charge a subscription fee that allows customers to access and utilize certain premium features of our Platforms. 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:

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Accounts Receivable, Net by Geographical Region

The following table summarizes accounts receivable, net by geographical region:

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Business Combinations

The Company accounts for its business combinations using the acquisition method of accounting where the purchase consideration is allocated to the tangible and intangible assets acquired, and liabilities assumed, based on their respective fair values as of the acquisition date. The excess of the fair value of the purchase consideration over the estimated fair values of the net assets acquired is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration of future growth and margins, future changes in technology, brand awareness and discount rates. Fair value estimates are based on the assumptions that management believes a market participant would use in pricing the asset or liability. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive income.

Intangible Assets

Amortizable finite-lived identifiable intangible assets consist of developed technology, customer relationships, customer lists and intellectual property licenses acquired in prior acquisitions and are stated at cost less accumulated amortization. The developed technology, customer relationships and customer lists are being amortized over the estimated useful lives of 3 to 10 years.

Goodwill

Goodwill consists of the excess of the cost of ResoluteAI and Scite over the fair value of amounts assigned to assets acquired and liabilities assumed. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. The Company operates in a single reporting unit at the consolidated level. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform an annual impairment test for its reporting unit on June 30 of each fiscal year. The Company did not record any impairment losses for the years ended June 30, 2026 or 2025.

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 short-term and long-term liability on the Company's consolidated balance sheets based on when the revenue is expected to be recognized.

Cost of Revenue

Platforms

Cost of Platform revenue consists primarily of personnel costs of our operations team, and 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.

Segment Reporting

The Company operates in a single segment which derives its revenue from subscription fees from its cloud-based SaaS Platforms and transactional service fees for the electronic delivery of singles articles, and a corresponding copyright fee for the permitted use of the content and it is based on how the chief operating decision maker (“CODM”) views and evaluates the Company’s operations in making operational and strategic decisions and assessments of financial performance. The Company’s President has been identified as the CODM.

The CODM regularly reviews revenue, certain significant expense categories, net income and select balance sheet items in evaluating segment performance. The significant segment expense categories and other segment items provided to the CODM and included in the measure of segment profit or loss are presented below.

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Segment net income includes other income, accreted interest expense, change in fair value of contingent earnout liability and provision for income taxes.

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The CODM also reviews the following balance sheet items at period-end as part of performance monitoring and resource allocation decisions:

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Because the Company operates as a single reportable segment, the amounts above reconcile directly to the corresponding consolidated financial statement line items.

Stock-Based Compensation

The Company periodically issues stock options, warrants and restricted stock to employees and non-employees for services, in capital raising transactions, and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic 718 of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of stock option and warrant awards to employees and directors on the date of grant using an option-pricing model. Depending on the type of restricted stock award, the fair value of our restricted stock is estimated based on the market price of the Company’s common stock on the date of grant or with the assistance of a valuation specialist, using the Monte Carlo simulations on a binomial model with a derived service period. The Company recognizes compensation expense on the straight-line basis over the requisite service period for awards subject to time vesting conditions and the graded tranche basis for awards subject to market vesting conditions. Forfeitures are accounted for as they occur. The Company recognizes stock-based compensation within its consolidated statements of operations and comprehensive income with classification depending on the nature of the services rendered.

Under ASC 718, for 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

The accompanying consolidated financial statements are presented in United States dollars, the reporting 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 a loss of $54,697 and a gain of $202,527 for the years ended June 30, 2026 and 2025, respectively.

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Net Income Per Share

Basic net income per share is computed by dividing net income 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.

The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share:

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Weighted average stock options excluded due to anti-dilution were 1,505,037 and 645,770 during the years ended June 30, 2026 and 2025. Shares of unvested restricted stock that were considered antidilutive were 913,792 and 1,223,342 during the years ended June 30, 2026 and 2025, respectively.

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Fair Value of Financial Instruments

Under FASB ASC Topic 820, Fair Value Measurements and Disclosures, fair value is defined as the price at which an asset could be exchanged or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or parameters are not available, valuation models are applied. A fair value hierarchy prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs, other than the quoted prices in active markets, are observable either directly or indirectly.

Level 3 – Unobservable inputs based on the Company’s assumptions.

The Company is required to use observable market data if such data is available without undue cost and effort.

The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities at fair value as of June 30, 2026 and 2025:

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On December 1, 2023, the Company acquired 100% of the outstanding stock of Scite, Inc. a Delaware corporation (“Scite”). The total purchase consideration for Scite, net of cash acquired, was approximately $21.1 million. The consideration included an initial payment of $7.2 million in cash, $6.5 million in stock, a holdback of $0.2 million and a contingent earnout that had an initial fair value of $7.2 million. The Company’s contingent earnout liability balance was $14.0 million at June 30, 2025 and $7.3 million at June 30, 2026.

Our contingent earnout liability related to the Scite acquisition is in the “Level 3” category for valuation purposes. As of June 30, 2026 and 2025, the contingent earnout liability fair value was estimated using the ending business to consumer annual recurring revenue figures as of May 30, 2025 and a 9% discount rate less payments made.

The Company finalized the calculation of the earnout for former shareholders of Scite at $15.4 million and recorded the final adjustment as of June 30, 2025. The earnout is comprised of a mix of cash and stock, with 62% of the earnout to be paid in cash and 38% in the Company’s common stock. The first of eight quarterly installment payments was disbursed in August 2025, with subsequent payments scheduled to continue quarterly until the final payment in May 2027. After June 30, 2025, the Company records accreted interest expense on the unpaid earnout liability. Prior to June 30, 2025, the change in fair value (which includes an interest component) was based on the assistance of a valuation specialist, using a Monte Carlo simulation of discounted cash flows based on management's forecast.

The following table summarizes the Company’s contingent earnout liability activity:

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The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments.

Income Taxes

The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Recently Issued Accounting Pronouncements

In December 2023, the FASB amended ASC 740, Income Taxes (issued under Accounting Standards Update (ASU) 2023-09, “Improvements to Income Tax Disclosures”). This ASU requires additional disclosures related to the rate reconciliation, income taxes paid and other amendments intended to enhance effectiveness and comparability. The Company adopted this accounting pronouncement for the year ended June 30, 2026, using the prospective method of adoption. As a result, we have enhanced our income tax disclosures for the fiscal year ended June 30, 2026 and going forward. Because ASU 2023-09 relates solely to disclosure requirements, adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

In November 2024, the FASB issued ASU No. 2024-03 “Income Statement - Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40)” which requires disclosure each reporting period, in the notes to the financial statements, of specified information about certain costs and expenses. The new requirements will be effective for the Company for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its annual disclosures.

In September 2025, the FASB issued ASU 2025-06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”, which eliminates project stages and requires capitalizing costs when management has committed to funding the project and it is probable of completion. In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is a significant uncertainty associated with the development activities of the software. The new requirements will be effective for the Company for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The guidance may be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-06.

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.