Research Solutions, Inc 10-Q for FY2022 Q1

About this 10-Q

Headline figures

Research Solutions, Inc. (RSSS)

10-Q 2021-11-12 For: 2021-09-30

Added on April 06, 2026

Research Solutions, Inc filed this 10-Q on November 12, 2021, covering the quarter ended September 30, 2021 (FY2022 Q1).

September 30,

June 30,

Customer A

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.74M; down 0.1% from $7.75M a year earlier
Net loss: $372K; compared with net income of $14.65K a year earlier
Diluted EPS: -$0.01; compared with $0.00 a year earlier

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Nevada	11-3797644
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Address not applicable¹	N/A
(Address of principal executive offices)	(Zip Code)

Title of each Class		Trading Symbol(s)		Name of each Exchange on which registered
Common stock, $0.001 par value		RSSS		The NASDAQ Stock Market LLC

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer þ	Smaller reporting company þ
	Emerging growth company ☐


Title of Class		Number of Shares Outstanding on November 5, 2021
Common Stock, $0.001 par value		26,744,119

PART I — FINANCIAL INFORMATION	3
Item 1. Condensed Consolidated Financial Statements (unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	27

PART II — OTHER INFORMATION	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6. Exhibits	29

SIGNATURES	31


	September 30,
	2021		June 30,
	(unaudited)		2021
Assets
Current assets:
Cash and cash equivalents	$	10,871,336	$	11,004,337
Accounts receivable, net of allowance of $47,695 and $51,495, respectively		4,702,686		4,717,453
Prepaid expenses and other current assets		207,813		270,252
Prepaid royalties		265,156		904,921
Total current assets		16,046,991		16,896,963

Other assets:
Property and equipment, net of accumulated depreciation of $825,050 and $824,123, respectively		21,187		20,755
Deposits and other assets		876		906
Total assets	$	16,069,054	$	16,918,624

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	6,461,726	$	6,687,188
Deferred revenue		4,438,591		4,804,351
Total current liabilities		10,900,317		11,491,539

Commitments and contingencies

Stockholders’ equity:
Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock; $0.001 par value; 100,000,000 shares authorized; 26,594,119 and 26,498,215 shares issued and outstanding, respectively		26,594		26,498
Additional paid-in capital		27,098,585		26,982,052
Accumulated deficit		(21,833,890)		(21,461,888)
Accumulated other comprehensive loss		(122,552)		(119,577)
Total stockholders’ equity		5,168,737		5,427,085
Total liabilities and stockholders’ equity	$	16,069,054	$	16,918,624


	Three Months Ended
	September 30,
	2021		2020

Revenue:
Platforms	$	1,509,874	$	1,141,688
Transactions		6,232,630		6,606,737
Total revenue		7,742,504		7,748,425

Cost of revenue:
Platforms		245,656		203,952
Transactions		4,836,473		5,094,897
Total cost of revenue		5,082,129		5,298,849
Gross profit		2,660,375		2,449,576

Operating expenses:
Selling, general and administrative		3,023,987		2,428,938
Depreciation and amortization		2,896		3,723
Total operating expenses		3,026,883		2,432,661

Income (loss) from operations		(366,508)		16,915

Other income		276		235

Income (loss) from operations before provision for income taxes		(366,232)		17,150
Provision for income taxes		(5,770)		(2,505)

Net income (loss)		(372,002)		14,645

Other comprehensive income (loss):
Foreign currency translation		(2,975)		1,165
Comprehensive income (loss)	$	(374,977)	$	15,810

Income (loss) per common share:
Basic	$	(0.01)	$	—
Diluted	$	(0.01)	$	—

Weighted average common shares outstanding:
Basic		26,277,116		25,898,900
Diluted		26,277,116		26,511,180


				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity

Balance, July 1, 2021	26,498,215	$	26,498	$	26,982,052	$	(21,461,888)	$	(119,577)	$	5,427,085

Fair value of vested stock options	—		—		71,999		—		—		71,999

Fair value of vested restricted common stock	115,909		116		98,995		—		—		99,111

Repurchase of common stock	(21,365)		(22)		(54,459)		—		—		(54,481)

Common stock issued upon exercise of stock options	1,360		2		(2)		—		—		—

Net loss for the period	—		—		—		(372,002)		—		(372,002)

Foreign currency translation	—		—		—		—		(2,975)		(2,975)

Balance, September 30, 2021	26,594,119	$	26,594	$	27,098,585	$	(21,833,890)	$	(122,552)	$	5,168,737


	As of September 30, 2021				As of June 30, 2021
United States	$	2,658,100	56.5	%	$	2,798,224	59.3	%
Europe		1,852,354	39.4	%		1,650,030	35.0	%
Rest of World		192,232	4.1	%		269,199	5.7	%
Total	$	4,702,686	100	%	$	4,717,453	100	%


	Three Months Ended		Year Ended
	September 30,		June 30,
	2021	2020	2021	2020
Period end Euro : US Dollar exchange rate	1.16	1.17	1.19	1.12
Average period Euro : US Dollar exchange rate	1.18	1.16	1.19	1.11

Period end Mexican Peso : US Dollar exchange rate	0.05	0.04	0.05	0.04
Average period Mexican Peso : US Dollar exchange rate	0.05	0.04	0.05	0.05


	All Options			Vested Options			Unvested Options
		Weighted			Weighted			Weighted
		Average			Average			Average
		Exercise			Exercise			Exercise
	Shares	Price		Shares	Price		Shares	Price
Outstanding at June 30, 2021	3,258,408	$	1.68	2,930,474	$	1.60	327,934	$	2.46
Granted	64,121		2.66	—		—	64,121		2.66
Options vesting	—		—	98,000		2.46	(98,000)		2.46
Exercised	(5,834)		2.40	(5,834)		2.40	—		—
Forfeited	—		—	—		—	—		—
Repurchased	—		—	—		—	—		—
Outstanding at September 30, 2021	3,316,695	$	1.70	3,022,640	$	1.63	294,055	$	2.47


	Option		Remaining
	Exercise	Options	Contractual	Options
	Price	Outstanding	Life (in years)	Exercisable
$	0.59	8,150	0.75	8,150
	0.60	5,000	0.75	5,000
	0.65	6,150	0.75	6,150
	0.70	225,000	4.18	225,000
	0.77	49,500	1.83	49,500
	0.80	16,000	3.89	16,000
	0.90	25,667	2.56	25,667
	0.97	6,000	0.75	6,000
	1.00	28,249	2.18	28,249
	1.02	2,000	0.75	2,000
	1.05	315,529	4.76	315,529
	1.07	33,898	1.04	33,898
	1.09	75,000	3.87	75,000
	1.10	105,000	3.75	105,000
	1.15	128,400	1.35	128,400
	1.20	274,000	5.80	274,000
	1.25	32,000	1.37	32,000
	1.30	243,000	0.43	243,000
	1.50	185,000	1.22	185,000
	1.59	25,000	6.61	25,000
	1.80	94,050	1.88	94,050
	1.85	17,800	1.55	17,800
	1.95	200,000	6.76	200,000
	2.13	216,708	9.14	200,000
	2.17	36,000	9.62	—
	2.40	332,833	7.13	331,999
	2.43	61,250	9.68	31,250
	2.45	173,000	8.85	72,083
	2.49	88,435	8.59	56,250
	2.50	20,000	7.63	16,666
	2.64	30,882	9.85	—
	2.67	33,194	9.97	—
	2.99	8,000	8.62	4,000
	3.13	208,000	8.12	205,333
	3.50	8,000	8.37	4,666
	Total	3,316,695		3,022,640


		Weighted
		Average
	Number of	Exercise
	Warrants	Price
Outstanding, June 30, 2021	50,000	$	1.19
Granted	—		—
Exercised	—		—
Repurchased	—		—
Expired/Cancelled	—		—
Outstanding, September 30, 2021	50,000	$	1.19
Exercisable, June 30, 2021	50,000	$	1.19
Exercisable, September 30, 2021	50,000	$	1.19


			Remaining
	Warrant	Warrants	Contractual	Warrants
	Exercise Price	Outstanding	Life (in years)	Exercisable
$	1.19	50,000	0.22	50,000
	Total	50,000		50,000


	Three Months Ended
	September 30,
	2021		2020
Expected dividend yield	0	%	0	%
Risk-free interest rate	0.92 - 1.01	%	0.37	%
Expected life (in years)	6		6
Expected volatility	56	%	63	%


	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
	2021		2021		2021		2020		2020		2020		2020		2019
Revenue:
Platforms	$	1,509,874	$	1,429,160	$	1,344,183	$	1,220,535	$	1,141,688	$	1,066,630	$	1,017,789	$	949,825
Transactions		6,232,630		6,788,494		6,996,349		6,229,200		6,606,737		6,819,150		7,029,617		6,580,613
Total revenue		7,742,504		8,217,654		8,340,532		7,449,735		7,748,425		7,885,780		8,047,406		7,530,438

Cost of revenue:
Platforms		245,656		257,320		233,696		217,003		203,952		153,241		177,919		162,508
Transactions		4,836,473		5,218,118		5,404,196		4,841,150		5,094,897		5,224,006		5,330,473		5,094,130
Total cost of revenue		5,082,129		5,475,438		5,637,892		5,058,153		5,298,849		5,377,247		5,508,392		5,256,638

Gross profit:
Platforms		1,264,218		1,171,840		1,110,487		1,003,532		937,736		913,389		839,870		787,317
Transactions		1,396,157		1,570,376		1,592,153		1,388,050		1,511,840		1,595,144		1,699,144		1,486,483
Total gross profit		2,660,375		2,742,216		2,702,640		2,391,582		2,449,576		2,508,533		2,539,014		2,273,800

Operating expenses:
Sales and marketing		522,951		521,220		566,713		487,571		498,374		692,096		626,956		638,837
Technology and product dev.		821,460		732,371		664,195		624,747		622,961		537,830		536,238		548,719
General and administrative		1,497,223		1,354,244		1,233,603		1,118,750		1,161,061		1,132,483		1,230,580		1,270,375
Depreciation and amortization		2,896		2,694		2,066		3,039		3,723		3,746		5,510		6,840
Stock-based comp. expense		171,110		221,589		179,345		435,949		170,791		143,054		142,237		523,632
Foreign currency transaction loss (gain)		11,243		(890)		6,648		(17,469)		(24,249)		4,214		8,648		(5,456)
Total operating expenses		3,026,883		2,831,228		2,652,570		2,652,587		2,432,661		2,513,423		2,550,169		2,982,947
Other income (expenses and income taxes)		(5,494)		136		(322)		399		(2,270)		4,331		23,101		25,721
Income (loss) from continuing operations		(372,002)		(88,876)		49,748		(260,606)		14,645		(559)		11,946		(683,426)
Gain on sale of discontinued operations		—		—		—		—		—		—		—		91,254
Net income (loss)		(372,002)		(88,876)		49,748		(260,606)		14,645		(559)		11,946		(592,172)

Basic income (loss) per common share:
Income (loss) per share from continuing operations	$	(0.01)	$	—	$	—	$	(0.01)	$	—	$	—	$	—	$	(0.03)
Income per share from discontinued operations	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Net income (loss) per share	$	(0.01)	$	—	$	—	$	(0.01)	$	—	$	—	$	—	$	(0.03)
Basic weighted average common shares outstanding		26,277,116		26,145,794		26,027,665		25,988,117		25,898,900		25,815,163		24,960,394		24,185,966

Diluted income (loss) per common share:
Income (loss) per share from continuing operations	$	(0.01)	$	—	$	—	$	(0.01)	$	—	$	—	$	—	$	(0.03)
Income per share from discontinued operations	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


Category	Impact			Key Drivers
Platforms	↑	$	368,186	Increased due to additional deployments to new and existing customers, and expansion from existing customers. 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	↓	$	(374,107)	Decreased primarily due to lower order volume.


	Three Months Ended
	September 30,
	2021		2020		% Change *
As a percentage of revenue:
Platforms	16.3	%	17.9	%	(1.6)	%
Transactions	77.6	%	77.1	%	0.5	%
Total	65.6	%	68.4	%	(2.8)	%


	Three Months Ended September 30,
	2021		2020		$ Change		% Change

Revenue:
Platforms	$	1,509,874	$	1,141,688	$	368,186	32.2	%
Transactions		6,232,630		6,606,737		(374,107)	(5.7)	%
Total revenue		7,742,504		7,748,425		(5,921)	(0.1)	%

Cost of revenue:
Platforms		245,656		203,952		41,704	20.4	%
Transactions		4,836,473		5,094,897		(258,424)	(5.1)	%
Total cost of revenue		5,082,129		5,298,849		(216,720)	(4.1)	%

Gross profit:
Platforms		1,264,218		937,736		326,482	34.8	%
Transactions		1,396,157		1,511,840		(115,683)	(7.7)	%
Total gross profit		2,660,375		2,449,576		210,799	8.6	%

Operating expenses:
Sales and marketing		522,951		498,374		24,577	4.9	%
Technology and product development		821,460		622,961		198,499	31.9	%
General and administrative		1,497,223		1,161,061		336,162	29.0	%
Depreciation and amortization		2,896		3,723		(827)	(22.2)	%
Stock-based compensation expense		171,110		170,791		319	0.2	%
Foreign currency transaction loss (gain)		11,243		(24,249)		35,492	146.4	%
Total operating expenses		3,026,883		2,432,661		594,222	24.4	%

Income (loss) from operations		(366,508)		16,915		(383,423)	(2,266.8)	%

Other income		276		235		41	17.4	%

Income (loss) from operations before provision for income taxes		(366,232)		17,150		(383,382)	(2,235.5)	%
Provision for income taxes		(5,770)		(2,505)		(3,265)	(130.3)	%

Net income (loss)	$	(372,002)	$	14,645		(386,647)	(2,640.1)	%


	Impact as percentage
Category	of revenue			Key Drivers
Platforms	↓	1.6	%	Decreased primarily due to proportionally lower personnel costs.
Transactions	↑	0.5	%	Increased primarily due to proportionally higher personnel costs.


				Total Number of Shares	Approximate Dollar Value
	Total Number	Average		Purchased as Part of	of Shares that May Yet Be
	of Shares	Price Paid		Publicly Announced	Purchased Under the
Period	Purchased¹	per Share		Plans or Programs	Plans or Programs
July 2021	—		—	—	$	349,263
August 2021	—		—	—	$	349,263
September 2021	21,365	$	2.55	—	$	294,782
Total	21,365	$	2.55	—		—

Exhibit Number	Description
10.1	Amended and Restated Executive Employment Agreement dated October 4, 2021, among Research Solutions, Inc., Reprints Desk, Inc. and Roy W. Olivier.++
10.2	Employment Agreement dated October 4, 2021, between Research Solutions, Inc. and William A. Nurthen.++
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer *
32.2	Section 1350 Certification of Chief Financial Officer *
101.INS	INLINE XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


	RESEARCH SOLUTIONS, INC.

	By:	/s/ Roy W. Olivier
		Roy W. Olivier
Date: November 12, 2021		Chief Executive Officer and President (Principal Executive Officer)

	By:	/s/ William Nurthen
		William Nurthen
Date: November 12, 2021		Chief Financial Officer (Principal Financial and Accounting Officer)

AGREED:

RESEARCH SOLUTIONS, INC.	ROY W. OLIVIER

BY:
NAME: Eugene Robin TITLE: Comp. Committee Chairman	(signature)


/s/ Roy W. Olivier
Roy W. Olivier
Chief Executive Officer and President (Principal Executive Officer)
November 12, 2021