Research Solutions, Inc 10-Q for FY2025 Q2

Research Solutions, Inc. (RSSS)

10-Q 2025-02-14 For: 2024-12-31

Added on April 06, 2026

About this 10-Q

Research Solutions, Inc filed this 10-Q on February 14, 2025, covering the quarter ended December 31, 2024 (FY2025 Q2).

Headline figures

Quarter ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.91M; up 15.5% from $10.31M a year earlier
Net loss: $1.98M; compared with a net loss of $53.63K a year earlier
Diluted EPS: -$0.07; 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 February 7, 2025
Common Stock, $0.001 par value		32,646,827

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	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	37
Item 4. Controls and Procedures	37

PART II — OTHER INFORMATION	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6. Exhibits	40

SIGNATURES	41


	December 31,
	2024		June 30,
	(unaudited)		2024
Assets
Current assets:
Cash and cash equivalents	$	7,701,155	$	6,100,031
Accounts receivable, net of allowance of $129,895 and $68,579, respectively		7,116,055		6,879,800
Prepaid expenses and other current assets		742,166		643,553
Prepaid royalties		589,068		1,067,237
Total current assets		16,148,444		14,690,621

Non-current assets:
Property and equipment, net of accumulated depreciation of $932,773 and $922,558, respectively		63,355		88,011
Intangible assets, net of accumulated amortization of $2,129,868 and $1,535,310, respectively		10,230,439		10,764,261
Goodwill		16,345,888		16,315,888
Deposits and other assets		867		981
Total assets	$	42,788,993	$	41,859,762

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	8,104,118	$	8,843,612
Deferred revenue		8,853,415		9,023,848
Contingent earnout liability, current portion		3,963,956		—
Total current liabilities		20,921,489		17,867,460

Non-current liabilities:
Contingent earnout liability, long-term portion		10,741,044		12,298,114
Total liabilities		31,662,533		30,165,574

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; 32,640,407 and 32,295,373 shares issued and outstanding, respectively		32,640		32,295
Additional paid-in capital		38,836,646		38,089,958
Accumulated deficit		(27,620,476)		(26,309,246)
Accumulated other comprehensive loss		(122,350)		(118,819)
Total stockholders’ equity		11,126,460		11,694,188
Total liabilities and stockholders’ equity	$	42,788,993	$	41,859,762


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023

Revenue:
Platforms	$	4,601,257	$	3,125,584	$	8,930,902	$	5,725,776
Transactions		7,312,962		7,188,158		15,027,799		14,648,937
Total revenue		11,914,219		10,313,742		23,958,701		20,374,713

Cost of revenue:
Platforms		619,842		486,185		1,167,009		868,799
Transactions		5,473,284		5,343,755		11,204,723		10,990,546
Total cost of revenue		6,093,126		5,829,940		12,371,732		11,859,345
Gross profit		5,821,093		4,483,802		11,586,969		8,515,368

Operating expenses:
Selling, general and administrative		5,422,013		4,748,050		10,229,103		9,818,948
Depreciation and amortization		306,233		155,749		618,328		215,369
Total operating expenses		5,728,246		4,903,799		10,847,431		10,034,317

Income (loss) from operations		92,847		(419,997)		739,538		(1,518,949)

Other income		348,999		108,194		417,524		248,505
Change in fair value of contingent earnout liability		(2,406,886)		268,232		(2,406,886)		268,232

Loss before provision for income taxes		(1,965,040)		(43,571)		(1,249,824)		(1,002,212)
Provision for income taxes		(15,194)		(10,057)		(61,406)		(39,459)

Net loss		(1,980,234)		(53,628)		(1,311,230)		(1,041,671)

Other comprehensive income (loss):
Foreign currency translation		2,637		6,349		(3,531)		5,403
Comprehensive loss	$	(1,977,597)	$	(47,279)	$	(1,314,761)	$	(1,036,268)

Loss per common share:
Net loss per share, basic and diluted	$	(0.07)	$	-	$	(0.04)	$	(0.04)
Weighted average common shares outstanding, basic and diluted		30,421,808		28,092,945		30,384,339		27,564,404


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

Balance, September 30, 2024	32,513,172	$	32,513	$	38,491,610	$	(25,640,242)	$	(124,987)	$	12,758,894

Stock options expense	—		—		59,189		—		—		59,189

Restricted common stock expense	—		—		475,133		—		—		475,133

Grant of restricted common stock	340,000		340		(340)		—		—		—

Forfeited restricted common stock	(180,000)		(180)		180		—		—		—

Repurchase of common stock	(48,132)		(48)		(189,111)		—		—		(189,159)

Common stock issued upon exercise of stock options	15,367		15		(15)		—		—		—

Net loss for the period	—		—		—		(1,980,234)		—		(1,980,234)

Foreign currency translation	—		—		—		—		2,637		2,637

Balance, December 31, 2024	32,640,407	$	32,640	$	38,836,646	$	(27,620,476)	$	(122,350)	$	11,126,460

Balance, July 1, 2024	32,295,373	$	32,295	$	38,089,958	$	(26,309,246)	$	(118,819)	$	11,694,188

Stock options expense	—		—		88,045		—		—		88,045

Restricted common stock expense	—		—		864,266		—		—		864,266

Grant of restricted common stock	590,000		590		(590)		—		—		—

Forfeited restricted common stock	(228,584)		(229)		229		—		—		—

Repurchase of common stock	(53,889)		(54)		(205,224)		—		—		(205,278)

Common stock issued upon exercise of stock options	37,507		38		(38)		—		—		—

Net loss for the period	—		—		—		(1,311,230)		—		(1,311,230)

Foreign currency translation	—		—		—		—		(3,531)		(3,531)

Balance, December 31, 2024	32,640,407	$	32,640	$	38,836,646	$	(27,620,476)	$	(122,350)	$	11,126,460


	As of December 31, 2024				As of June 30, 2024
United States	$	3,786,975	53.2	%	$	4,125,696	60.0	%
Europe		2,417,901	34.0	%		2,082,900	30.2	%
Rest of World		911,179	12.8	%		671,204	9.8	%
Total	$	7,116,055	100	%	$	6,879,800	100	%


	Six Months Ended		Year Ended
	December 31,		June 30,
	2024	2023	2024	2023
Period end Euro: US Dollar exchange rate	1.04	1.10	1.07	1.09
Average period Euro: US Dollar exchange rate	1.09	1.08	1.08	1.05

Period end GBP: US Dollar exchange rate	1.25	1.27	1.26	1.27
Average period GBP: US Dollar exchange rate	1.29	1.25	1.26	1.20

Period end Mexican Peso: US Dollar exchange rate	0.05	0.06	0.05	0.06
Average period Mexican Peso: US Dollar exchange rate	0.05	0.06	0.06	0.05


	As of December 31, 2024								As of June 30, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets
Total assets	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Liabilities
Contingent earnout liability	$	—		—	$	14,705,000	$	14,705,000	$	—		—	$	12,298,114	$	12,298,114
Total liabilities	$	—	$	—	$	14,705,000	$	14,705,000	$	—	$	—	$	12,298,114	$	12,298,114


	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, 2024	2,788,625	$	1.93	2,529,856	$	1.85	258,769	$	2.73
Granted	260,000		2.79	—		—	260,000		2.79
Options vesting	—		—	108,306		2.73	(108,306)		2.73
Exercised	(111,821)		2.03	(111,821)		2.03	—		—
Forfeited	—		—	—		—	—		—
Outstanding at December 31, 2024	2,936,804	$	2.00	2,526,341	$	1.87	410,463	$	2.77


	Option		Remaining
	Exercise	Options	Contractual	Options
	Price	Outstanding	Life (in years)	Exercisable
$	0.70	225,000	0.93	225,000
	0.80	16,000	0.64	16,000
	0.90	15,000	0.59	15,000
	1.00	15,000	0.19	15,000
	1.05	300,000	1.64	300,000
	1.09	40,000	1.39	40,000
	1.10	105,000	0.50	105,000
	1.20	247,000	2.89	247,000
	1.59	25,000	3.36	25,000
	2.10	238,767	7.11	238,767
	2.13	211,500	5.88	211,500
	2.15	200,000	7.94	200,000
	2.17	28,000	6.36	28,000
	2.19	5,000	7.05	5,000
	2.40	274,000	3.87	274,000
	2.43	61,250	6.43	61,250
	2.45	72,000	5.59	72,000
	2.49	68,000	5.41	68,000
	2.50	20,000	4.38	20,000
	2.64	7,353	6.60	7,353
	2.67	21,000	6.71	21,000
	2.73	257,934	8.94	107,471
	2.79	260,000	9.87	—
	2.99	8,000	5.36	8,000
	3.13	208,000	4.87	208,000
	3.50	8,000	5.12	8,000
	Total	2,936,804		2,526,341


				Weighted
				Average
	Number of			Grant Date
	Shares	Fair Value		Fair Value
Non-vested, June 30, 2024	1,957,726	$	3,075,449	$	1.57
Granted	590,000		1,309,240		2.22
Vested	(226,041)		(571,261)		2.53
Forfeited	(228,584)		(332,450)		1.45
Non-vested, December 31, 2024	2,093,101	$	3,480,978	$	1.66


	Pro Forma (Unaudited)				Pro Forma (Unaudited)
	Three Months ended December 31,				Six Months ended December 31,
	2024		2023		2024		2023

Revenue	$	11,914,219	$	11,033,441	$	23,958,701	$	21,834,349
Cost of revenue		6,093,126		5,877,494		12,371,732		11,967,550
Gross profit		5,821,093		5,155,947		11,586,969		9,866,799

Total operating expenses		5,728,246		5,524,052		10,847,431		11,197,427

Income (loss) from operations		92,847		(368,105)		739,538		(1,330,628)

Other income (expense)		(2,057,887)		376,426		(1,989,362)		516,737

Income (loss) from operations before provision for income taxes		(1,965,040)		8,321		(1,249,824)		(813,891)
Provision for income taxes		(15,194)		(10,057)		(61,406)		(39,459)

Pro Forma Net loss	$	(1,980,234)	$	(1,736)	$	(1,311,230)	$	(853,350)
Pro Forma Net loss per weighted average share, basic and diluted	$	(0.07)	$	—	$	(0.04)	$	(0.03)


	Six Months Ended
	December 31,
	2024		2023
Expected dividend yield	—	%	—	%
Risk-free interest rate	4.26	%	4.00	%
Expected life (in years)	6		5
Expected volatility	46	%	50	%


In thousands	ResoluteAI		Scite
Fair value of consideration
Cash	$	2,774	$	7,217
Holdback cash paid		125		175
Common Stock (2,729,014 shares at $2.40 per share)		—		6,549
Contingent earn-out		1,867		7,194
Total purchase price		4,766		21,135

Allocation of the consideration to the fair value of assets acquired and liabilities assumed:
Cash and cash equivalents		59		—
Accounts receivable		132		109
Prepaid expenses		43		—
Accounts payable and accrued expenses		(33)		—
Deferred revenue		(649)		(997)
Other current liabilities		(60)		(18)
Net tangible assets		(508)		(906)

Intangible assets:
Developed technology		2,000		8,800
Customer relationships		100		70
Net identifiable intangible assets		2,100		8,870

Goodwill		3,174		13,171

Fair value of net assets acquired	$	4,766	$	21,135


Category	Impact			Key Drivers
Platforms	↑	$	1,475,673	Increased due to additional deployments to new and existing customers, expansion from existing customers and additional revenue from the Scite acquisition. Revenue is recognized ratably over the term of the subscription agreement, which is typically one year for commercial customers and monthly for individual subscribers, provided all other revenue recognition criteria have been met. Billings or payments received in advance of revenue recognition are recorded as deferred revenue.
Transactions	↑	$	124,804	Increased primarily due to organic growth in copyright revenues.


Category	Impact			Key Drivers
Platforms	↑	$	3,205,126	Increased due to additional deployments to new and existing customers, expansion from existing customers and additional revenue from the Scite acquisition. Revenue is recognized ratably over the term of the subscription agreement, which is typically one year for commercial customers and monthly for individual subscribers, provided all other revenue recognition criteria have been met. Billings or payments received in advance of revenue recognition are recorded as deferred revenue.
Transactions	↑	$	378,862	Increased primarily due to organic growth in copyright revenues.


	Impact as percentage
Category	of revenue			Key Drivers
Platforms	↓	2.1	%	Decreased primarily due to lower personnel costs, slightly offset by higher hosting costs.
Transactions	↑	0.5	%	Increased primarily due to lower copyright margins.


				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
October 1-31, 2024	—		—	—	$	330,774
November 1-30, 2024	—		—	—	$	330,774
December 1-31, 2024	48,132	$	3.93	—	$	891,615
Total	48,132	$	3.93	—		—


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number	Filed Herewith
2.1	Share Exchange Agreement between Research Solutions, Inc. and Reprints Desk Inc. dated as of November 13, 2006.	SB-2	12/28/2007	2.1
2.2	Agreement and Plan of Merger by and among Reprints Desk, Inc., Research Solutions Acquisition Corp 1, Research Solutions, Inc., as Parent Guarantor, Resolute Innovation, Inc. and Shareholder Representative Services LLC dated as of July 28, 2023.	8-K	7/31/2023	2.1
2.3	Agreement of Merger and Plan of Reorganization, by and among the Research Solutions, Inc., Research Solutions Acquisition 2, LLC, Scite, Inc., and the Stockholder Representative, dated as of November 24, 2023.	8-K	11/24/2023	2.1
3.1.1	Articles of Incorporation.	SB-2	12/28/2007	3.1
3.1.2	Articles of Merger Effective March 4, 2013.	8-K	3/6/2013	3.1
3.2	Amended and Restated Bylaws.	8-K	10/17/2012	3.2
10.1	Employment Agreement dated October 4, 2024, between Research Solutions, Inc. and Roy W. Olivier.				X
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 Document
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 (formatted as inline XBRL and contained in Exhibit 101)


	RESEARCH SOLUTIONS, INC.

	By:	/s/ Roy W. Olivier
		Roy W. Olivier
Date: February 14, 2025		Chief Executive Officer and President (Principal Executive Officer)

	By:	/s/ William Nurthen
		William Nurthen
Date: February 14, 2025		Chief Financial Officer (Principal Financial and Accounting Officer)


/s/ Roy W. Olivier
Roy W. Olivier
Chief Executive Officer and President (Principal Executive Officer)
February 14, 2025