Research Solutions, Inc 10-Q for FY2022 Q2

About this 10-Q

Headline figures

Research Solutions, Inc. (RSSS)

10-Q 2022-02-14 For: 2021-12-31

Added on April 06, 2026

Research Solutions, Inc filed this 10-Q on February 14, 2022, covering the quarter ended December 31, 2021 (FY2022 Q2).

December 31,

June 30,

Customer A

Quarter ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.87M; up 5.7% from $7.45M a year earlier
Net loss: $481.59K; compared with a net loss of $260.61K a year earlier
Diluted EPS: -$0.02; compared with -$0.01 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 8, 2022
Common Stock, $0.001 par value		27,103,037

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	30
Item 4. Controls and Procedures	30

PART II — OTHER INFORMATION	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6. Exhibits	32

SIGNATURES	34


	December 31,
	2021		June 30,
	(unaudited)		2021
Assets
Current assets:
Cash and cash equivalents	$	10,679,714	$	11,004,337
Accounts receivable, net of allowance of $75,655 and $51,495, respectively		4,618,340		4,717,453
Prepaid expenses and other current assets		325,861		270,252
Prepaid royalties		655,146		904,921
Total current assets		16,279,061		16,896,963

Other assets:
Property and equipment, net of accumulated depreciation of $829,554 and $824,123, respectively		40,918		20,755
Deposits and other assets		880		906
Total assets	$	16,320,859	$	16,918,624

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	6,514,905	$	6,687,188
Deferred revenue		4,741,238		4,804,351
Total current liabilities		11,256,143		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; 26,817,056 and 26,498,215 shares issued and outstanding, respectively		26,817		26,498
Additional paid-in capital		27,475,741		26,982,052
Accumulated deficit		(22,315,475)		(21,461,888)
Accumulated other comprehensive loss		(122,367)		(119,577)
Total stockholders’ equity		5,064,716		5,427,085
Total liabilities and stockholders’ equity	$	16,320,859	$	16,918,624


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2021		2020		2021		2020

Revenue:
Platforms	$	1,604,829	$	1,220,535	$	3,114,703	$	2,362,223
Transactions		6,267,458		6,229,200		12,500,088		12,835,937
Total revenue		7,872,287		7,449,735		15,614,791		15,198,160

Cost of revenue:
Platforms		231,668		217,003		477,324		420,955
Transactions		4,802,959		4,841,150		9,639,432		9,936,047
Total cost of revenue		5,034,627		5,058,153		10,116,756		10,357,002
Gross profit		2,837,660		2,391,582		5,498,035		4,841,158

Operating expenses:
Selling, general and administrative		3,315,249		2,649,548		6,339,236		5,078,486
Depreciation and amortization		4,260		3,039		7,156		6,762
Total operating expenses		3,319,509		2,652,587		6,346,392		5,085,248

Loss from operations		(481,849)		(261,005)		(848,357)		(244,090)

Other income		264		399		540		634

Loss from operations before provision for income taxes		(481,585)		(260,606)		(847,817)		(243,456)
Provision for income taxes		—		—		(5,770)		(2,505)

Net loss		(481,585)		(260,606)		(853,587)		(245,961)

Other comprehensive income (loss):
Foreign currency translation		185		5,516		(2,790)		6,681
Comprehensive loss	$	(481,400)	$	(255,090)	$	(856,377)	$	(239,280)

Loss per common share:
Net loss per share, basic and diluted	$	(0.02)	$	(0.01)	$	(0.03)	$	(0.01)
Weighted average common shares outstanding, basic and diluted		26,351,947		25,988,117		26,314,532		25,943,509


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

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

Fair value of vested stock options	—		—		55,669		—		—		55,669

Fair value of vested restricted common stock	135,088		135		244,735		—		—		244,870

Repurchase of common stock	(5,951)		(6)		(13,325)		—		—		(13,331)

Common stock issued upon exercise of stock options	43,800		44		30,627		—		—		30,671

Common stock issued upon exercise of warrants	50,000		50		59,450		—		—		59,500

Net loss for the period	—		—		—		(481,585)		—		(481,585)

Foreign currency translation	—		—		—		—		185		185

Balance, December 31, 2021	26,817,056	$	26,817	$	27,475,741	$	(22,315,475)	$	(122,367)	$	5,064,716

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	—		—		127,668		—		—		127,668

Fair value of vested restricted common stock	250,997		251		343,730		—		—		343,981

Repurchase of common stock	(27,316)		(28)		(67,784)		—		—		(67,812)

Common stock issued upon exercise of stock options	45,160		46		30,625		—		—		30,671

Common stock issued upon exercise of warrants	50,000		50		59,450		—		—		59,500

Net loss for the period	—		—		—		(853,587)		—		(853,587)

Foreign currency translation	—		—		—		—		(2,790)		(2,790)

Balance, December 31, 2021	26,817,056	$	26,817	$	27,475,741	$	(22,315,475)	$	(122,367)	$	5,064,716


	As of December 31, 2021				As of June 30, 2021
United States	$	2,637,206	57.1	%	$	2,798,224	59.3	%
Europe		1,750,037	37.9	%		1,650,030	35.0	%
Rest of World		231,097	5.0	%		269,199	5.7	%
Total	$	4,618,340	100	%	$	4,717,453	100	%


	Six Months Ended		Year Ended
	December 31,		June 30,
	2021	2020	2021	2020
Period end Euro : US Dollar exchange rate	1.13	1.23	1.19	1.12
Average period Euro : US Dollar exchange rate	1.17	1.17	1.19	1.11

Period end Mexican Peso : US Dollar exchange rate	0.05	0.05	0.05	0.04
Average period Mexican Peso : US Dollar exchange rate	0.05	0.05	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	64,076		2.66	—		—	64,076		2.66
Options vesting	—		—	134,295		2.46	(134,295)		2.46
Exercised	(49,634)		0.90	(49,634)		0.90	—		—
Forfeited	—		—	—		—	—		—
Repurchased	—		—	—		—	—		—
Outstanding at December 31, 2021	3,272,850	$	1.71	3,015,135	$	1.65	257,715	$	2.47


	Option		Remaining
	Exercise	Options	Contractual	Options
	Price	Outstanding	Life (in years)	Exercisable
$	0.70	225,000	3.93	225,000
	0.77	25,000	2.63	25,000
	0.80	16,000	3.64	16,000
	0.90	25,667	2.31	25,667
	0.97	6,000	0.50	6,000
	1.00	28,249	1.93	28,249
	1.02	2,000	0.50	2,000
	1.05	315,529	4.51	315,529
	1.07	33,898	0.79	33,898
	1.09	75,000	3.62	75,000
	1.10	105,000	3.50	105,000
	1.15	128,400	1.10	128,400
	1.20	274,000	5.55	274,000
	1.25	32,000	1.12	32,000
	1.30	243,000	0.18	243,000
	1.50	185,000	0.97	185,000
	1.59	25,000	6.36	25,000
	1.80	94,050	1.63	94,050
	1.85	17,800	1.29	17,800
	1.95	200,000	6.51	200,000
	2.13	216,708	8.88	206,960
	2.17	35,955	9.36	—
	2.40	332,833	6.87	332,833
	2.43	61,250	9.43	31,250
	2.45	173,000	8.59	86,500
	2.49	88,435	8.34	66,666
	2.50	20,000	7.38	18,333
	2.64	30,882	9.60	—
	2.67	33,194	9.72	—
	2.99	8,000	8.37	4,667
	3.13	208,000	7.87	206,000
	3.50	8,000	8.12	5,333
	Total	3,272,850		3,015,135


		Weighted
		Average
	Number of	Exercise
	Warrants	Price
Outstanding, June 30, 2021	50,000	$	1.19
Granted	—		—
Exercised	(50,000)		1.19
Repurchased	—		—
Expired/Cancelled	—		—
Outstanding, December 31, 2021	—	$	—
Exercisable, June 30, 2021	50,000	$	1.19
Exercisable, December 31, 2021	—	$	—


	Dec 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2021		2021		2021		2021		2020		2020		2020		2020
Revenue:
Platforms	$	1,604,829	$	1,509,874	$	1,429,160	$	1,344,183	$	1,220,535	$	1,141,688	$	1,066,630	$	1,017,789
Transactions		6,267,458		6,232,630		6,788,494		6,996,349		6,229,200		6,606,737		6,819,150		7,029,617
Total revenue		7,872,287		7,742,504		8,217,654		8,340,532		7,449,735		7,748,425		7,885,780		8,047,406

Cost of revenue:
Platforms		231,668		245,656		257,320		233,696		217,003		203,952		153,241		177,919
Transactions		4,802,959		4,836,473		5,218,118		5,404,196		4,841,150		5,094,897		5,224,006		5,330,473
Total cost of revenue		5,034,627		5,082,129		5,475,438		5,637,892		5,058,153		5,298,849		5,377,247		5,508,392

Gross profit:
Platforms		1,373,161		1,264,218		1,171,840		1,110,487		1,003,532		937,736		913,389		839,870
Transactions		1,464,499		1,396,157		1,570,376		1,592,153		1,388,050		1,511,840		1,595,144		1,699,144
Total gross profit		2,837,660		2,660,375		2,742,216		2,702,640		2,391,582		2,449,576		2,508,533		2,539,014

Operating expenses:
Sales and marketing		518,357		522,951		521,220		566,713		487,571		498,374		692,096		626,956
Technology and product dev.		868,236		821,460		732,371		664,195		624,747		622,961		537,830		536,238
General and administrative		1,616,135		1,497,223		1,354,244		1,233,603		1,118,750		1,161,061		1,132,483		1,230,580
Depreciation and amortization		4,260		2,896		2,694		2,066		3,039		3,723		3,746		5,510
Stock-based comp. expense		300,539		171,110		221,589		179,345		435,949		170,791		143,054		142,237
Foreign currency transaction loss (gain)		11,982		11,243		(890)		6,648		(17,469)		(24,249)		4,214		8,648
Total operating expenses		3,319,509		3,026,883		2,831,228		2,652,570		2,652,587		2,432,661		2,513,423		2,550,169
Other income (expenses and income taxes)		264		(5,494)		136		(322)		399		(2,270)		4,331		23,101
Net income (loss)		(481,585)		(372,002)		(88,876)		49,748		(260,606)		14,645		(559)		11,946

Basic income (loss) per common share:
Net income (loss) per share	$	(0.02)	$	(0.01)	$	—	$	—	$	(0.01)	$	—	$	—	$	—
Basic weighted average common shares outstanding		26,351,947		26,277,116		26,145,794		26,027,665		25,988,117		25,898,900		25,815,163		24,960,394

Diluted income (loss) per common share:
Net income (loss) per share	$	(0.02)	$	(0.01)	$	—	$	—	$	(0.01)	$	—	$	—	$	—
Diluted weighted average common shares outstanding		26,351,947		26,277,116		26,145,794		26,565,892		25,988,117		26,511,180		25,815,163		25,717,403


	Six Months Ended
	December 31,
	2021		2020
Expected dividend yield	0	%	0	%
Risk-free interest rate	0.92 - 1.01	%	0.37 - 0.51	%
Expected life (in years)	6		5 - 6
Expected volatility	56	%	60 - 63	%


				Weighted
				Average
	Number of			Grant Date
	Shares	Fair Value		Fair Value
Non-vested, June 30, 2021	245,252	$	481,953	$	2.47
Granted	250,997		643,842		2.57
Vested	(150,523)		(343,981)		2.51
Forfeited	—		—		—
Non-vested, December 31, 2021	345,726	$	781,814	$	2.52


Category	Impact			Key Drivers
Platforms	↑	$	384,294	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	↑	$	38,258	Increased primarily due to higher copyright revenues.


Category	Impact			Key Drivers
Platforms	↑	$	752,480	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	↓	$	335,849	Decreased primarily due to lower order volume.


	Three Months Ended December 31,
	2021		2020		$ Change		% Change

Revenue:
Platforms	$	1,604,829	$	1,220,535	$	384,294	31.5	%
Transactions		6,267,458		6,229,200		38,258	0.6	%
Total revenue		7,872,287		7,449,735		422,552	5.7	%

Cost of revenue:
Platforms		231,668		217,003		14,665	6.8	%
Transactions		4,802,959		4,841,150		(38,191)	(0.8)	%
Total cost of revenue		5,034,627		5,058,153		(23,526)	(0.5)	%

Gross profit:
Platforms		1,373,161		1,003,532		369,629	36.8	%
Transactions		1,464,499		1,388,050		76,449	5.5	%
Total gross profit		2,837,660		2,391,582		446,078	18.7	%

Operating expenses:
Sales and marketing		518,357		487,571		30,786	6.3	%
Technology and product development		868,236		624,747		243,489	39.0	%
General and administrative		1,616,135		1,118,750		497,385	44.5	%
Depreciation and amortization		4,260		3,039		1,221	40.2	%
Stock-based compensation expense		300,539		435,949		(135,410)	(31.1)	%
Foreign currency transaction loss (gain)		11,982		(17,469)		29,451	168.6	%
Total operating expenses		3,319,509		2,652,587		666,922	25.1	%

Loss from operations		(481,849)		(261,005)		(220,844)	(84.6)	%

Other income		264		399		(135)	(33.8)	%

Net loss	$	(481,585)	$	(260,606)		(220,979)	(84.8)	%


	Six Months Ended December 31,
	2021		2020		$ Change		% Change

Revenue:
Platforms	$	3,114,703	$	2,362,223	$	752,480	31.9	%
Transactions		12,500,088		12,835,937		(335,849)	(2.6)	%
Total revenue		15,614,791		15,198,160		416,631	2.7	%

Cost of revenue:
Platforms		477,324		420,955		56,369	13.4	%
Transactions		9,639,432		9,936,047		(296,615)	(3.0)	%
Total cost of revenue		10,116,756		10,357,002		(240,246)	(2.3)	%

Gross profit:
Platforms		2,637,379		1,941,268		696,111	35.9	%
Transactions		2,860,656		2,899,890		(39,234)	(1.4)	%
Total gross profit		5,498,035		4,841,158		656,877	13.6	%


Operating expenses:
Sales and marketing		1,041,308		985,945		55,363	5.6	%
Technology and product development		1,689,696		1,247,708		441,988	35.4	%
General and administrative		3,113,358		2,279,812		833,546	36.6	%
Depreciation and amortization		7,156		6,762		394	5.8	%
Stock-based compensation expense		471,649		606,739		(135,090)	(22.3)	%
Foreign currency transaction loss (gain)		23,225		(41,718)		64,943	155.7	%
Total operating expenses		6,346,392		5,085,248		1,261,144	24.8	%

Loss from operations		(848,357)		(244,090)		(604,267)	(247.6)	%

Other income		540		634		(94)	(14.8)	%

Loss from operations before provision for income taxes		(847,817)		(243,456)		(604,361)	(248.2)	%
Provision for income taxes		(5,770)		(2,505)		(3,265)	(130.3)	%

Net loss	$	(853,587)	$	(245,961)	$	(607,626)	(247.0)	%


	Impact as percentage
Category	of revenue			Key Drivers
Platforms	↓	3.4	%	Decreased primarily due to proportionally lower personnel costs.
Transactions	↓	1.1	%	Decreased primarily due to proportionally lower copyright expenses and 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
October 2021	—		—	—	$	294,782
November 2021	—		—	—	$	294,782
December 2021	5,951	$	2.24	—	$	281,451
Total	5,951	$	2.24	—		—

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. Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 12, 2021.++
10.2	Employment Agreement dated October 4, 2021, between Research Solutions, Inc. and William A. Nurthen. Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed November 12, 2021.++
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: February 14, 2022		Chief Executive Officer and President (Principal Executive Officer)

	By:	/s/ William Nurthen
		William Nurthen
Date: February 14, 2022		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, 2022