Notes to SEFA
Basis of Presentation: Parallax Advanced Research Corporation and Affiliate (collectively, the Organization) prepares its consolidated financial information in accordance with accounting principles generally accepted in the United States of America (US GAAP). All intercompany accounts and transactions have been eliminated in consolidation for the Schedule of Expenditures and Federal Awards for the year ended June 30, 2025 unless otherwise stated. The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activities of Parallax Advanced Research Corporation and its affiliate under programs funded by the federal government for the year ended June 30, 2025. The Schedule has been prepared on the accrual basis in accordance with US GAAP and includes all federal awards and contracts entered into directly between the Organization and agencies and departments of the federal government, as well as funds passed through to the Organization by other recipients, and is in accordance with Uniform Guidance U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Negative amounts reported on the Schedule are adjustments or credits made in the normal course of business to amounts reported as expenditures in prior fiscal years. Because the Schedule presents only a selected portion of the Organization's operations, it is not intended to and does not present its financial position, changes in net assets, or cash flows. Research and Development Cluster (“R&D cluster”): OMB Uniform Guidance defines research and development as follows: research is a systematic study directed toward fuller scientific knowledge or understanding of the subject studied: development is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The Organization’s work is closely aligned with the R&D cluster of programs in accordance with 2 CFR 200.17 and 2 CFR 200.87. Accordingly, the schedule of expenditures of federal awards reports all reportable programs in the R&D cluster. Subrecipient: Certain funds are passed through to subgrantee organizations by the Organization. Expenditures incurred by the subgrantees and reimbursed by the Organization are presented in the Schedule. The Organization is also the subrecipient of funds, which have been reported as expenditures and listed as pass-through funds.
Expenditures consist of direct and indirect costs. Direct costs are those that can be identified specifically with a project. Indirect costs are costs of services and resources that benefit both sponsored and non-sponsored projects but are necessary for the operation of the Organization. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization uses indirect cost rates to charge indirect costs to individual projects. The rates are the result of a number of complex cost allocation procedures that the Organization uses to allocate its indirect costs to both sponsored and non-sponsored activities. These indirect rates are reviewed and approved by the applicable cognizant agencies for the funds.
Due to the nature of research and development that the Organization performs on behalf of the federal government, various contracts and project information is considered classified, which includes “Top Secret,” “Secret,” or “Confidential.” As a result, the Schedule reflects summarized data by agency in order to properly safeguard various information as required by the federal government.