8-K
Research Solutions, Inc. (RSSS)
UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORTPursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report:
(Date of earliest event reported)
September 28, 2022
Research Solutions, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or other Jurisdiction of Incorporation)
| 1-39256 | 11-3797644 |
|---|---|
| (Commission File Number) | (IRS Employer Identification No.) |
N/A
(Address of Principal Executive Offices and zip code)
(310) 477-0354
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| 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 |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.01. | Entry into a Material Definitive Agreement. |
|---|
On September 28, 2022, Reprints Desk, Inc. (“Reprints Desk”), the Registrant’s wholly-owned subsidiary, entered into an Asset Purchase Agreement (the “APA”) with FIZ Karlsruhe – Leibniz-Institut für Informationsinfrastruktur GmbH (“FIZ”). Under the APA, FIZ will assign and transfer to Reprints Desk, effective as of December 31, 2022 (the “Effective Date”), certain contracts (the “Sold Contracts”) related to FIZ’s document procurement and delivery business under its “AutoDoc” platform (the “Asset Sale”). In consideration of the Asset Sale, Reprints Desk agreed to pay FIZ a base amount of €300,000 within five business days following the date of the APA, and to pay FIZ up to an additional €250,000 on September 30, 2023 based on the trailing 12 month’s (“TTM”) revenue of customers that consent to have their Sold Contract assumed by Reprints Desk as a transferred contract, compared to the TTM revenue of all Sold Contracts. For AutoDoc customers that have (i) consented to have their Sold Contract assumed by Reprints Desk and (ii) place an order by June 30, 2023, Reprints Desk shall additionally pay FIZ the net collected service fees FIZ would have received from these customers had they continued to be contracted with FIZ for the period from January 1, 2023 through December 31, 2025. These payments will not include supplier fees, copyright fees, and any other fees that normally would not have been retained by FIZ, and will be made quarterly with the first payment commencing April 30, 2023.
Under the APA, FIZ made certain warranties to Reprints Desk regarding the terms and conditions of the Sold Contracts, pending litigation and regulatory permits, and agreed in the event of FIZ’s breach of its warranties (with respect to claims made with 15 months after the Effective Date) to put Reprints Desk in the position Reprints Desk would have been in if the relevant warranty had been correct. If restitution is not possible due to the nature of the breach, or if restitution is not effected within 60 days following notice of the breach, Reprints Desk is entitled to request that FIZ pay (up to a maximum amount of €150,000) the necessary sums to Reprints Desk to compensate Reprints Desk for applicable losses.
Under the APA, FIZ also agreed for a period of two years after the Effective Date (i) not to accept document purchases from counterparties to the transferred contracts and to refer such parties exclusively to Reprints Desk for document purchases, (ii) not to compete with the services provided under the Sold Contracts, and (iii) to refrain from actively referring any of its customers to document delivery services comparable to the AutoDoc platform (excluding hyperlinks on FIZ’s website to certain publishers and “Open Access” platforms). The APA is governed under the laws of Germany with disputes settled in accordance with the Arbitration Rules of the German Institution of Arbitration without recourse to the ordinary courts of law.
On October 4, 2022, the Registrant announced the Asset Sale in a press release entitled “Research Solutions Announces the Acquisition of Customers From FIZ Karlsruhe”. A copy of the press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits: |
| --- | --- |
| Exhibit Number | Description |
| --- | --- |
| 99.1 | Press Release issued October 4, 2022 entitled “Research Solutions Announces the Acquisition of Customers From FIZ Karlsruhe”. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RESEARCH SOLUTIONS, INC. | ||
|---|---|---|
| Date: October 4, 2022 | By: | /s/ William Nurthen |
| William Nurthen | ||
| Chief Financial Officer & Secretary |
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Exhibit 99.1
FOR IMMEDIATE RELEASE
Research Solutions Announces the Acquisitionof Customers From FIZ Karlsruhe
HENDERSON, Nev., October 4, 2022 — Research Solutions, Inc. (NASDAQ: RSSS), a pioneer in providing cloud-based workflow solutions for R&D driven organizations, announced today that it will acquire selected customer contracts for the AutoDoc service of FIZ Karlsruhe (“FIZ”), the only European full-service document delivery supplier with central billing and international delivery. AutoDoc has about 700 global customers, approximately 400 of which are active on a TTM basis. AutoDoc provides services in more than 30 countries, the top three of which are Germany, Japan, and the US.
“The acquisition of FIZ Karlsruhe's AutoDoc customers provides us with an increase in transaction revenues and a cross-sell opportunity to upgrade those customers to our full Article Galaxy Platform,” said Roy W. Olivier, President and Chief Executive Officer of Research Solutions. “This transaction serves to expand our customer base, both in size and geography, while we continue to look at larger M&A opportunities that can add recurring revenue and Adjusted EBITDA to the business, while accelerating our product and business strategy.”
FIZ will be terminating their AutoDoc offering and the transaction provides the opportunity for any customer that has transacted through AutoDoc in the last three years to have their contract assumed by Research Solutions. AutoDoc's customers have been notified they can opt to have Research Solutions assume their contract effective January 1^st^, 2023.
"Given the assumed contracts will not transfer over to us until January 1, 2023, we will not recognize revenue from this transaction until the start of our fiscal third quarter,” said Research Solutions Chief Financial Officer, William Nurthen. "We will provide further details on expected revenues from the transaction as we gain more insights into the contracts that will be assumed.”
About Research Solutions
Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the company's SaaS research platform, to streamline access to the latest scientific research and data with 24/7 customer support. For more information and details, please visit www.researchsolutions.com
Important Cautions Regarding Forward-Looking Statements
Certain statements in this press release may contain "forward-looking statements" regarding future events and our future results. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the markets in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "targets," "goals," "projects", "intends," "plans," "believes," "seeks," "estimates," "endeavors," "strives," "may," or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in the Company's most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Examples of forward-looking statements in this release include statements regarding additional customers, potential acquisitions and the Company's prospects for growth, profitability, and cash flow. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. For more information, please refer to the Company's filings with the Securities and Exchange Commission.
Contact
Steven Hooser or John Beisler
Three Part Advisors
(214) 872-2710
shooser@threepa.com; jbeisler@threepa.com