Research Solutions, Inc 10-Q for FY2023 Q1

About this 10-Q

Headline figures

Research Solutions, Inc. (RSSS)

10-Q 2022-11-14 For: 2022-09-30

Added on April 06, 2026

Research Solutions, Inc filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2023 Q1).

September 30,

June 30,

Customer A

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.68M; up 12.2% from $7.74M a year earlier
Net income: $214.57K; compared with a net loss of $372K a year earlier
Diluted EPS: $0.01; compared with -$0.01 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

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 4, 2022
Common Stock, $0.001 par value		29,297,082

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	28
Item 4. Controls and Procedures	28

PART II — OTHER INFORMATION	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6. Exhibits	30

SIGNATURES	32


	September 30,
	2022		June 30,
	(unaudited)		2022
Assets
Current assets:
Cash and cash equivalents	$	10,387,689	$	10,603,175
Accounts receivable, net of allowance of $71,122 and $94,144, respectively		5,169,789		5,251,545
Prepaid expenses and other current assets		205,118		276,026
Prepaid royalties		136,012		846,652
Total current assets		15,898,608		16,977,398

Other assets:
Property and equipment, net of accumulated depreciation of $846,894 and $840,996, respectively		45,849		47,985
Non-refundable deposit for asset acquisition		297,450		—
Deposits and other assets		894		893
Total assets	$	16,242,801	$	17,026,276

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	5,566,975	$	6,604,032
Deferred revenue		5,357,148		5,538,526
Total current liabilities		10,924,123		12,142,558

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; 27,330,878 and 27,075,648 shares issued and outstanding, respectively		27,331		27,076
Additional paid-in capital		28,298,171		28,072,855
Accumulated deficit		(22,879,707)		(23,094,272)
Accumulated other comprehensive loss		(127,117)		(121,941)
Total stockholders’ equity		5,318,678		4,883,718
Total liabilities and stockholders’ equity	$	16,242,801	$	17,026,276


	Three Months Ended
	September 30,
	2022		2021

Revenue:
Platforms	$	2,019,967	$	1,509,874
Transactions		6,664,676		6,232,630
Total revenue		8,684,643		7,742,504

Cost of revenue:
Platforms		230,473		245,656
Transactions		5,104,922		4,836,473
Total cost of revenue		5,335,395		5,082,129
Gross profit		3,349,248		2,660,375

Operating expenses:
Selling, general and administrative		3,163,807		3,023,987
Depreciation and amortization		5,812		2,896
Total operating expenses		3,169,619		3,026,883

Income (loss) from operations		179,629		(366,508)

Other income		39,069		276

Income (loss) from operations before provision for income taxes		218,698		(366,232)
Provision for income taxes		(4,133)		(5,770)

Net income (loss)		214,565		(372,002)

Other comprehensive income (loss):
Foreign currency translation		(5,176)		(2,975)
Comprehensive income (loss)	$	209,389	$	(374,977)

Basic income (loss) per common share:
Net income (loss) per share	$	0.01	$	(0.01)
Basic weighted average common shares outstanding		26,718,171		26,277,116

Diluted income (loss) per common share:
Net income (loss) per share	$	0.01	$	(0.01)
Diluted weighted average common shares outstanding		27,779,841		26,277,116


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

Balance, July 1, 2022	27,075,648	$	27,076	$	28,072,855	$	(23,094,272)	$	(121,941)	$	4,883,718

Fair value of vested stock options	—		—		40,706		—		—		40,706

Fair value of vested restricted common stock	222,334		222		134,433		—		—		134,655

Fair value of vested unrestricted common stock	36,509		36		68,236		—		—		68,272

Repurchase of common stock	(9,659)		(9)		(18,053)		—		—		(18,062)

Common stock issued upon exercise of stock options	6,046		6		(6)		—		—		—

Net income for the period	—		—		—		214,565		—		214,565

Foreign currency translation	—		—		—		—		(5,176)		(5,176)

Balance, September 30, 2022	27,330,878	$	27,331	$	28,298,171	$	(22,879,707)	$	(127,117)	$	5,318,678


	As of September 30, 2022				As of June 30, 2022
United States	$	2,820,384	54.6	%	$	3,255,976	62.0	%
Europe		2,002,207	38.7	%		1,665,111	31.7	%
Rest of World		347,198	6.7	%		330,458	6.3	%
Total	$	5,169,789	100	%	$	5,251,545	100	%


	Three Months Ended		Year Ended
	September 30,		June 30,
	2022	2021	2022	2021
Period end Euro : US Dollar exchange rate	0.98	1.16	1.05	1.19
Average period Euro : US Dollar exchange rate	1.01	1.18	1.13	1.19

Period end GBP : US Dollar exchange rate	1.11	1.35	1.21	1.38
Average period GBP : US Dollar exchange rate	1.19	1.38	1.34	1.34

Period end Mexican Peso : US Dollar exchange rate	0.05	0.05	0.05	0.05
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, 2022	3,182,872	$	1.79	2,999,974	$	1.75	182,898	$	2.49
Granted	—		—	—		—	—		—
Options vesting	—		—	51,123		2.54	(51,123)		2.54
Exercised	(22,500)		1.48	(22,500)		1.48	—		—
Forfeited	(35,000)		2.43	(33,750)		2.40	(1,250)		3.27
Repurchased	—		—	—		—	—		—
Outstanding at September 30, 2022	3,125,372	$	1.79	2,994,847	$	1.76	130,525	$	2.46


	Option		Remaining
	Exercise	Options	Contractual	Options
	Price	Outstanding	Life (in years)	Exercisable
$	0.70	225,000	3.18	225,000
	0.77	25,000	1.88	25,000
	0.80	16,000	2.89	16,000
	0.90	15,000	2.85	15,000
	1.00	15,000	2.44	15,000
	1.05	305,000	3.90	305,000
	1.07	33,898	0.04	33,898
	1.09	50,000	3.65	50,000
	1.10	105,000	2.75	105,000
	1.15	104,400	0.35	104,400
	1.20	274,000	4.80	274,000
	1.25	32,000	0.37	32,000
	1.50	185,000	0.22	185,000
	1.59	25,000	5.61	25,000
	1.80	74,050	0.98	74,050
	1.85	16,000	0.64	16,000
	1.95	200,000	5.76	200,000
	2.10	238,767	9.36	238,767
	2.13	216,708	8.14	211,138
	2.17	35,955	8.62	17,978
	2.19	5,000	9.31	—
	2.40	312,833	6.13	312,833
	2.43	61,250	8.68	46,250
	2.45	168,000	7.85	126,000
	2.49	78,435	7.67	72,836
	2.50	20,000	6.63	20,000
	2.64	30,882	8.85	12,867
	2.67	33,194	8.97	13,831
	2.99	8,000	7.62	6,666
	3.13	208,000	7.12	208,000
	3.50	8,000	7.37	7,333
	Total	3,125,372		2,994,847


				Weighted
				Average
	Number of			Grant Date
	Shares	Fair Value		Fair Value
Non-vested, June 30, 2022	400,092	$	775,453	$	2.38
Granted	222,334		431,328		1.94
Vested	(54,186)		(134,655)		2.60
Forfeited	—		—		—
Non-vested, September 30, 2022	568,240	$	1,072,126	$	2.18


	Sept. 30,		June 30,		Mar. 31,		Dec 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
	2022		2022		2022		2021		2021		2021		2021		2020
Revenue:
Platforms	$	2,019,967	$	1,886,845	$	1,786,224	$	1,604,829	$	1,509,874	$	1,429,160	$	1,344,183	$	1,220,535
Transactions		6,664,676		6,675,164		6,971,128		6,267,458		6,232,630		6,788,494		6,996,349		6,229,200
Total revenue		8,684,643		8,562,009		8,757,352		7,872,287		7,742,504		8,217,654		8,340,532		7,449,735

Cost of revenue:
Platforms		230,473		240,214		219,051		231,668		245,656		257,320		233,696		217,003
Transactions		5,104,922		5,038,653		5,299,804		4,802,959		4,836,473		5,218,118		5,404,196		4,841,150
Total cost of revenue		5,335,395		5,278,867		5,518,855		5,034,627		5,082,129		5,475,438		5,637,892		5,058,153

Gross profit:
Platforms		1,789,494		1,646,631		1,567,173		1,373,161		1,264,218		1,171,840		1,110,487		1,003,532
Transactions		1,559,754		1,636,511		1,671,324		1,464,499		1,396,157		1,570,376		1,592,153		1,388,050
Total gross profit		3,349,248		3,283,142		3,238,497		2,837,660		2,660,375		2,742,216		2,702,640		2,391,582

Operating expenses:
Sales and marketing		521,216		691,368		543,496		518,357		522,951		521,220		566,713		487,571
Technology and product dev.		875,290		1,049,430		971,959		868,236		821,460		732,371		664,195		624,747
General and administrative		1,519,424		1,663,671		1,629,371		1,616,135		1,497,223		1,354,244		1,233,603		1,118,750
Depreciation and amortization		5,812		5,507		4,988		4,260		2,896		2,694		2,066		3,039
Stock-based comp. expense		175,361		225,501		399,234		300,539		171,110		221,589		179,345		435,949
Foreign currency transaction loss (gain)		72,516		91,279		29,394		11,982		11,243		(890)		6,648		(17,469)
Total operating expenses		3,169,619		3,726,756		3,578,442		3,319,509		3,026,883		2,831,228		2,652,570		2,652,587
Other income (expenses and income taxes)		34,936		5,347		(585)		264		(5,494)		136		(322)		399
Net income (loss)		214,565		(438,267)		(340,530)		(481,585)		(372,002)		(88,876)		49,748		(260,606)

Basic income (loss) per common share:
Net income (loss) per share	$	0.01	$	(0.02)	$	(0.01)	$	(0.02)	$	(0.01)	$	—	$	—	$	(0.01)
Basic weighted average common shares outstanding		26,718,171		26,576,054		26,512,195		26,351,947		26,277,116		26,145,794		26,027,665		25,988,117

Diluted income (loss) per common share:
Net income (loss) per share	$	0.01	$	(0.02)	$	(0.01)	$	(0.02)	$	(0.01)	$	—	$	—	$	(0.01)
Diluted weighted average common shares outstanding		27,779,841		26,576,054		26,512,195		26,351,947		26,277,116		26,145,794		26,565,892		25,988,117


Category	Impact			Key Drivers
Platforms	↑	$	510,093	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	↑	$	432,046	Increased primarily due to higher paid order volume.


	Three Months Ended
	September 30,
	2022		2021		% Change *
As a percentage of revenue:
Platforms	11.4	%	16.3	%	(4.9)	%
Transactions	76.6	%	77.6	%	(1.0)	%
Total	61.4	%	65.6	%	(4.2)	%


	Impact as percentage
Category	of revenue			Key Drivers
Platforms	↓	4.9	%	Decreased primarily due to lower software expense and lower personnel costs.
Transactions	↓	1.0	%	Decreased primarily due to proportionally lower personnel costs.


	Three Months Ended
	September 30,
	2022		2021		% Change*
As a percentage of revenue:
Platforms	88.6	%	83.7	%	4.9	%
Transactions	23.4	%	22.4	%	1.0	%
Total	38.6	%	34.4	%	4.2	%


	Three Months Ended September 30,
	2022		2021		$ Change		% Change

Revenue:
Platforms	$	2,019,967	$	1,509,874	$	510,093	33.8	%
Transactions		6,664,676		6,232,630		432,046	6.9	%
Total revenue		8,684,643		7,742,504		942,139	12.2	%

Cost of revenue:
Platforms		230,473		245,656		(15,183)	(6.2)	%
Transactions		5,104,922		4,836,473		268,449	5.6	%
Total cost of revenue		5,335,395		5,082,129		253,266	5.0	%

Gross profit:
Platforms		1,789,494		1,264,218		525,276	41.5	%
Transactions		1,559,754		1,396,157		163,597	11.7	%
Total gross profit		3,349,248		2,660,375		688,873	25.9	%

Operating expenses:
Sales and marketing		521,216		522,951		(1,735)	(0.3)	%
Technology and product development		875,290		821,460		53,830	6.6	%
General and administrative		1,519,424		1,497,223		22,201	1.5	%
Depreciation and amortization		5,812		2,896		2,916	100.7	%
Stock-based compensation expense		175,361		171,110		4,251	2.5	%
Foreign currency transaction loss		72,516		11,243		61,273	545.0	%
Total operating expenses		3,169,619		3,026,883		142,736	4.7	%

Income (loss) from operations		179,629		(366,508)		546,137	149.0	%

Other income		39,069		276		38,793	14,055.4	%

Income (loss) from operations before provision for income taxes		218,698		(366,232)		584,930	159.7	%
Provision for income taxes		(4,133)		(5,770)		1,637	28.4	%

Net income (loss)	$	214,565	$	(372,002)		586,567	157.7	%


				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 1-31, 2022	—		—	—	$	255,345
August 1-31, 2022	—		—	—	$	255,345
September 1-30, 2022	9,659	$	1.87	—	$	237,283
Total	9,659	$	1.87	—		—

Exhibit Number	Description
3.1.1	Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to the registrant’s Registration Statement on Form SB-2 filed on December 28, 2007.)
3.1.2	Articles of Merger Effective March 4, 2013. (Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on March 6, 2013.)
3.2	Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed on October 17, 2012.)
10.1	Asset Purchase Agreement dated September 28, 2022, between Reprints Desk, Inc. and FIZ Karlsruhe – Leibniz-Institut für Informationsinfrastruktur GmbH.
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 14, 2022		Chief Executive Officer and President (Principal Executive Officer)

	By:	/s/ William Nurthen
		William Nurthen
Date: November 14, 2022		Chief Financial Officer (Principal Financial and Accounting Officer)

Proportion of Transferred Revenues	Base Amount Plus
● 100 %	250,000 Euro
● 90 %	195,000 Euro
● 81,41 %	147,755 Euro
● 75 %	112,500 Euro
● 50 %		0,00 Euro
● 25 %	0,00 Euro

Account Holder:	FIZ Karlsruhe – Leibniz-Institut für Informationsinfrastruktur GmbH
Bank:	Baden-Württembergische Bank/LBBW, Stuttgart, Germany
BIC:	SOLADEST
IBAN:	DE54 6005 0101 7495 5020 06

FIZ Karlsruhe – Leibniz-Institut für Informationsinfrastruktur GmbH:
	__________________________		__________________________
Name:	Sabine Brünger-Weilandt	Name:	ppa. Andreas Schwartz
Position:	President and CEO	Position:	Vice President Administration

Date: _____________________ Reprints Desk, Inc.:
	__________________________
Name:	William Nurthen
Position:	Chief Financial Officer

Affiliate	means, with regard to any person or entity, any person or entity that, at the relevant point in time, controls, is controlled by, or is under common control with, such person or entity. As used in this definition, “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a person or entity, whether through (i) ownership of voting securities or other interests, (ii) the ability to appoint a majority of the board of directors or other management body, or (iii) contract or otherwise.
Agreement	as defined in the Preamble
Authority	means in any jurisdiction any legislative, executive or judicial unit of any governmental entity (supranational, federal, state or local) or any department, commission, agency, bureau, subdivision, branch, office, council, official, court or other regulatory, administrative or judicial authority thereof as well as any governmental or non-governmental self-regulatory organization, agency or authority.
Base Amount	as defined in Section 4.1.1
Base Amount Plus	as defined in Section 4.2.1
Bonus Amount	as defined in Section 4.3.1
Bonus Information	as defined in Section 4.3.1
Business Day	means a day that is not a Saturday, a Sunday or a statutory public holiday in Karlsruhe, Germany.
BGB	means the German Civil Code (Bürgerliches Gesetzbuch).
Document Purchases	as defined in Section 2
Effective Date	as defined in Section 3.1.1
HGB	means the German Commercial Code (Handelsgesetzbuch).
Neutral Expert	as defined in Section 4.3.2

Notice	means any notification in the form according to Section 12; the term “Notify” shall be construed accordingly.
Parties	as defined in the Recitals
Paying Party	as defined in Section 3.1.2
Purchase Price	as defined in Section 4.3.1
Purchaser	as defined in the Recitals
Purchaser Account	as defined in Section 5.1.2
Receiving Party	as defined in Section 3.1.2
Seller	as defined in the Recitals
Seller Account	as defined in Section 5.1.1
Sold Contracts	as defined in Section 3.1.1
Tax	means any taxes (Steuern) according to Section 3 German Fiscal Code (Abgabenordnung) as well as equivalent taxes under the statutory law provisions of any foreign jurisdiction, in each case including interest, penalties and other ancillary charges and irrespective of whether owed as a primary or as a secondary liability, but excluding deferred taxes.
Taxing Authority	means any competent public Authority in charge of imposing or collecting any Tax.
Third Party	means any person or entity who or which is neither a Party to this Agreement nor an Affiliate of a Party to this Agreement.
Third Party Claim	as defined in Section 7.2.3
Transaction	as defined in the Preamble
Transfer Tax	means all federal, state, local or foreign transfer, sales, use, ad valorem, receipts, excise, documentary, registration, real property transfer, mortgage recording, stamp duty or similar Taxes (excluding, for the avoidance of doubt, VAT), together with any interest, addition or penalties with respect thereto and any interest in respect of such additions or penalties.
Transferred Contract	as defined in Section 4.2.1
TTMR	as defined in Section 4.4.2
VAT	means (i) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112) and (ii) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in

	addition to, such tax referred to in (i) above, or imposed elsewhere.
Warranties	as defined in Section 6.1.1


/s/ Roy W. Olivier
Roy W. Olivier
Chief Executive Officer and President (Principal Executive Officer)
November 14, 2022