リサーチソリューションズの適時開示・決算・その他

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report:

(Date of earliest event reported)

November 14, 2024

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 Capital Market

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 2.02

Results of Operations and Financial Condition.

On November 14, 2024, the Registrant announced its financial results for the first quarter ended September 30, 2024. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

Item 9.01.

Financial Statements and Exhibits

(d)           Exhibits.

	Exhibit Number	Description

	99.1	Press Release issued November 14, 2024 entitled “Research Solutions Reports Fiscal First Quarter 2025 Results”.

	104	Cover Page Interactive Data File (embedded as Inline XBRL document).

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: November 14, 2024	By:	/s/ William Nurthen
		William Nurthen
		Chief Financial Officer

EX-99.1 2 tm2428446d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Research Solutions Reports Fiscal First Quarter 2025 Results

Reports 60% Increase in ARR to $17.6 Million, Positive Net Income and Cash Flow, Adjusted

EBITDA of $1.3 Million

HENDERSON, Nev., November 14, 2024 — Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, reported financial results for its fiscal first quarter ended September 30, 2024.

Fiscal First Quarter 2025 Summary

Total revenue of $12.0 million, a 20% increase from the prior-year quarter

Platform revenue up 67% to $4.3 million. Platform revenue accounted for 36% of the revenue as compared to 26% in the prior year.

Annual Recurring Revenue (“ARR”) up 60% to $17.6 million, which includes approximately $12.2 million of B2B recurring revenue and $5.4 million of B2C recurring revenue.

Gross profit up 43% from the prior-year quarter. Total gross margin improved 780 basis points to 47.9%, a new Company record, representative of the Company’s continued mix shift towards Platform revenue.

Net income of $669,000 or $0.02 per diluted share, compared to a net loss of ($988,000) or ($0.04) per share in the prior-year quarter.

Adjusted EBITDA of $1.3 million, an 11% margin, compared to ($441,000) in the prior-year quarter. On a trailing twelve-months (“TTM”) basis the Company has now generated Adjusted EBITDA of almost $4 million, which represents a 8.5% margin.

Cash flow from operations of positive $0.8 million compared to a burn of $0.8 million in the prior-year quarter. On a TTM basis, the Company has now generated over $5.1 million in cash flow from operations, which is approximately 1.3x the Company’s TTM Adjusted EBITDA.

“Our first quarter results reflect our continued ability to expand the profitability and cash flow of the business as our Platform offering continues to represent a larger percentage of total revenue. Our margins improved significantly, and we generated strong year-over-year net income and Adjusted EBITDA growth,” said Roy W. Olivier, President and CEO of Research Solutions. “Our sequential ARR growth was impacted by seasonality, primarily in our B2C platform business. From a B2B perspective, we continue to develop additional features that improve the value proposition to our end users that lead to better efficiency and cost savings as budgetary constraints continue to present some challenges to our legacy Platform growth. I remain confident that our products continue to serve as a critical piece to the research process and look forward to growth in both our B2B and B2C user bases.”

Fiscal First Quarter 2025 Results

Total revenue was $12 million, a 20% increase from $10.1 million in the year-ago quarter as both Platform and Transaction revenue increased from the prior period.

Platform subscription revenue increased 67% to $4.3 million compared to $2.6 million in the year-ago quarter. The increase was primarily due to the Scite acquisition as well as to an increase in the total number of paid Platform deployments and upsells to existing customers. The quarter ended with annual recurring revenue of $17.6 million, up 60% year-over-year (see the Company’s definition of annual recurring revenue below).

Transaction revenue was $7.7 million, compared to $7.5 million in the first quarter of fiscal 2024. The increase was due to organic growth in copyright revenues. The Transaction customer count for the quarter was 1,390, compared to 1,395 customers in the prior-year quarter (see the Company's definition of active customer accounts and transactions below).

Total gross margin improved 780 basis points from the prior-year quarter to 47.9%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platforms business as well as increased margins in both the Platforms and the Transactions business.

Total operating expenses were $5.1 million, unchanged compared to the first quarter of 2024.

Net income in the first quarter was $669,000, or $0.02 per diluted share, compared to net loss of ($988,000), or ($0.04) per share, in the prior-year quarter. Adjusted EBITDA was $1.3 million, compared to ($441,000) in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Conference Call

Research Solutions President and CEO Roy W. Olivier and CFO Bill Nurthen will host the conference call, followed by a question-and-answer period.

Date: Thursday, November 14, 2024

Time: 5:00 p.m. ET (2:00 p.m. PT)

Dial-in number: 1-203-518-9708

Conference ID: RESEARCH

The conference call will be broadcast live and available for replay until December 14, 2024 by dialing 1-412-317-6671 and using the replay ID 11157176, and via the investor relations section of the Company's website at http://researchsolutions.investorroom.com/.

Fiscal First Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter

	Quarter Ended September 30,
	2024			2023			Change			% Change
Revenue:
Platforms	$	4,329,645		$	2,600,192		$	1,729,453			66.5	%
Transactions	$	7,714,837		$	7,460,779			254,058			3.4	%
Total Revenue		12,044,482			10,060,971			1,983,511			19.7	%
Gross Profit:
Platforms		3,782,478			2,217,577			1,564,901			70.6	%
Transactions		1,983,398			1,813,988			169,410			9.3	%
Total Gross Profit		5,765,876			4,031,565			1,734,311			43.0	%
Gross profit as a % of revenue:
Platforms		87.4	%		85.3	%		2.1	%
Transactions		25.7	%		24.3	%		1.4	%
Total Gross Profit		47.9	%		40.1	%		7.8	%
Operating Expenses:
Sales and marketing		1,190,407			685,016			505,391			73.8	%
Technology and product development		1,372,758			1,244,579			128,179			10.3	%
General and administrative		1,930,176			2,542,869			(612,692	)		-24.1	%
Depreciation and amortization		312,095			59,620			252,475			423.5	%
Stock-based compensation		417,989			591,814			(173,825	)		-29.4	%
Foreign currency translation loss		(104,240	)		6,620			(110,860	)		NM
Total Operating Expenses		5,119,185			5,130,518			(11,332	)		-0.2	%
Income (loss) from operations		646,691			(1,098,952	)		1,745,643			158.8	%
Other Income (Expenses):
Other income		68,525			140,311			(71,786	)		-51.2	%
Provision for income taxes		(46,212	)		(29,402	)		(16,810	)		57.2	%
Total Other Income (Expenses):		22,313			110,909			(88,596	)		-79.9	%
Net income (loss)	$	669,004		$	(988,043	)		1,657,047			167.7	%
Adjusted EBITDA	$	1,272,535		$	(440,898	)	$	1,713,433			388.6	%

		Quarter Ended September 30,
		2024			2023			Change			% Change
Platforms:
B2B ARR (Annual recurring revenue*):
Beginning of Period	$	12,060,201		$	9,444,130		$	2,616,071			27.7	%
Incremental ARR		127,633			1,576,111			(1,448,478	)		-91.9	%
End of Period	$	12,187,834		$	11,020,241		$	1,167,593			10.6	%
Deployments:
Beginning of Period		1,021			835			186			22.3	%
Incremental Deployments		8			45			(37	)		-82.2	%
End of Period		1,029			880			149			16.9	%
ASP (Average sales price):
Beginning of Period	$	11,812		$	11,310		$	502			4.4	%
End of Period	$	11,844		$	12,523		$	(679	)		-5.4	%
B2C ARR (Annual recurring revenue*):
Beginning of Period	$	5,363,129		$	-		$	5,363,129
Incremental ARR		67,666			-			67,666			NM
End of Period	$	5,430,795		$	-		$	5,430,795			NM

Total ARR (Annualized recurring revenue):	$	17,618,629		$	11,020,241		$	6,598,388			59.9	%

Transaction Customers:
Corporate customers		1,074			1,090			(16	)		-1.5	%
Academic customers		316			305			11			3.6	%
Total customers		1,390			1,395			(5	)		-0.4	%

Active Customer Accounts, Transactions and Annual Recurring Revenue

The Company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month.

A transaction is an order for a unit of copyrighted content fulfilled or managed in the Platform.

The Company defines annual recurring revenue ("ARR") as the value of contracted Platform subscription recurring revenue normalized to a one-year period. For B2C ARR, this includes the annualized value of monthly subscriptions, meaning their monthly value multiplied by twelve. Deployments represent total product deployments across our customer base.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions' management evaluates and makes operating decisions using various financial metrics. In addition to the company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company's operating results.

The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense) including any change in fair value of contingent earnout liability, foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

	Quarter Ended September 30,
	2024			2023			Change			% Change
Net Income (loss)	$	669,004		$	(988,043	)	$	1,657,047			167.7	%
Add (deduct):
Other income (expense)		(68,525	)		(140,311	)		71,786			-51.2	%
Foreign currency translation loss		(104,240	)		6,620			(110,860	)		NM
Provision for income taxes		46,212			29,402			16,810			57.2	%
Depreciation and amortization		312,095			59,620			252,475			423.5	%
Stock-based compensation		417,989			591,814			(173,825	)		-29.4	%
Adjusted EBITDA	$	1,272,535		$	(440,898	)	$	1,713,433			388.6	%

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 Certain statements in this press release may contain "forward-looking statements" regarding future events and our future results.

Important Cautions Regarding Forward-Looking Statements

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 enhanced product offerings, additional customers, and the Company's prospects for growth. 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.

Research Solutions, Inc. and Subsidiaries

Consolidated Balance Sheets

	September 30,
	2024			June 30,
	(unaudited)			2024
Assets
Current assets:
Cash and cash equivalents	$	6,924,773		$	6,100,031
Accounts receivable, net of allowance of $101,949 and $68,579, respectively		6,298,606			6,879,800
Prepaid expenses and other current assets		649,497			643,553
Prepaid royalties		572,524			1,067,237
Total current assets		14,445,400			14,690,621

Non-current assets:
Property and equipment, net of accumulated depreciation of $927,386 and $922,558, respectively		71,659			88,011
Intangible assets, net of accumulated amortization of $1,834,897 and $1,535,310, respectively ($8,117,222 provisional)		10,497,023			10,764,261
Goodwill ($13,171,486 provisional)		16,345,888			16,315,888
Deposits and other assets		915			981
Total assets	$	41,360,885		$	41,859,762

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	8,257,821		$	8,843,612
Deferred revenue		8,046,056			9,023,848
Total current liabilities		16,303,877			17,867,460

Non-current liabilities:
Contingent earnout liability		12,298,114			12,298,114
Total liabilities		28,601,991			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; 32,513,172 and 32,295,373 shares issued and outstanding, respectively		32,513			32,295
Additional paid-in capital		38,491,610			38,089,958
Accumulated deficit		(25,640,242	)		(26,309,246	)
Accumulated other comprehensive loss		(124,987	)		(118,819	)
Total stockholders’ equity		12,758,894			11,694,188
Total liabilities and stockholders’ equity	$	41,360,885		$	41,859,762

Research Solutions, Inc. and Subsidiaries

Consolidated Statements of Operations and Other Comprehensive Loss

(Unaudited)

	Three Months Ended
	September 30,
	2024			2023
Revenue:
Platforms	$	4,329,645		$	2,600,192
Transactions		7,714,837			7,460,779
Total revenue		12,044,482			10,060,971

Cost of revenue:
Platforms		547,167			382,615
Transactions		5,731,439			5,646,791
Total cost of revenue		6,278,606			6,029,406
Gross profit		5,765,876			4,031,565

Operating expenses:
Selling, general and administrative		4,807,090			5,070,897
Depreciation and amortization		312,095			59,620
Total operating expenses		5,119,185			5,130,517

Income (loss) from operations		646,691			(1,098,952	)

Other income		68,525			140,311

Income (loss) from operations before provision for income taxes		715,216			(958,641	)
Provision for income taxes		(46,212	)		(29,402	)

Net income (loss)		669,004			(988,043	)

Other comprehensive income (loss):
Foreign currency translation		(6,168	)		(946	)
Comprehensive income (loss)	$	662,836		$	(988,989	)

Basic income (loss) per common share:
Net income (loss) per share	$	0.02		$	(0.04	)
Weighted average common shares outstanding		30,346,871			27,052,445

Diluted income (loss) per common share:
Net income (loss) per share	$	0.02		$	(0.04	)
Weighted average common shares outstanding		33,234,858			27,052,445

Research Solutions, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	September 30,
	2024			2023
Cash flow from operating activities:
Net income (loss)	$	669,004		$	(988,043	)
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		312,095			59,620
Fair value of vested stock options		28,856			17,471
Fair value of vested restricted common stock		389,133			574,343
Changes in operating assets and liabilities:
Accounts receivable		566,194			(112,965	)
Prepaid expenses and other current assets		(5,944	)		109,946
Prepaid royalties		494,713			35,140
Accounts payable and accrued expenses		(618,140	)		195,747
Deferred revenue		(992,792	)		(646,830	)
Net cash provided by (used in) operating activities		843,119			(755,571	)

Cash flow from investing activities:
Purchase of property and equipment		—			(33,825	)
Payment for acquisition of Resolute, net of cash acquired		—			(2,718,253	)
Net cash used in investing activities		—			(2,752,078	)

Cash flow from financing activities:
Common stock repurchase		(16,119	)		(46,135	)
Payment of contingent acquisition consideration		—			(110,190	)
Net cash used in financing activities		(16,119	)		(156,325	)

Effect of exchange rate changes		(2,258	)		705
Net increase (decrease) in cash and cash equivalents		824,742			(3,663,269	)
Cash and cash equivalents, beginning of period		6,100,031			13,545,333
Cash and cash equivalents, end of period	$	6,924,773		$	9,882,064

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	46,212		$	29,402

Non-cash investing and financing activities:
Contingent consideration accrual on asset acquisition	$	33,353		$	42,989

Contact

Steven Hooser or John Beisler

Three Part Advisors

(214) 872-2710

shooser@threepa.com; jbeisler@threepa.com

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