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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)
February 13, 2025
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/A1
(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. ¨
1 In November 2019, we became a fully remote company. Accordingly, we do not currently have principal executive offices. Our mailing address is 10624 E. Eastern Ave., Ste. A-614, Henderson, NV 89052.
| Item 2.02 | Results of Operations and Financial Condition. |
On February 13, 2025, the Registrant announced its financial results for the second quarter ended December 31, 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 February 13, 2025 entitled “Research Solutions Reports Fiscal Second 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: February 13, 2025 | By: | /s/ William Nurthen |
| William Nurthen | ||
| Chief Financial Officer | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Research Solutions Reports Fiscal Second Quarter 2025 Results
Reports 23 Percent Increase in ARR to $19.1 Million and 61 Net New Platform Deployments
HENDERSON, Nev., February 13, 2025 — Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, reported financial results for its fiscal second quarter ended December 31, 2024.
Fiscal Second Quarter 2025 Summary
| · | Total revenue of $11.9 million, a 15.5% increase from the prior-year quarter. |
| · | Platform revenue up 47% to $4.6 million. Platform revenue accounted for 39% of total revenue as compared to 30% in the prior-year quarter. |
| · | Annual Recurring Revenue (“ARR”) up 23% to $19.1 million, which includes approximately $12.7 million of B2B recurring revenue and $6.4 million of B2C recurring revenue. |
| · | Gross profit up 30% from the prior-year quarter. Total gross margin improved 540 basis points to 48.9%. |
| · | Net loss of $2.0 million or ($0.07) per share, compared to a net loss of ($54,000) or nil per share in the prior-year quarter. The quarter's results include a charge of approximately $2.4 million related to increasing the projected contingent earnout liability for Scite. |
| · | Adjusted EBITDA of $963,000 compared to $318,000 in the prior-year quarter. The result is inclusive of $112,000 in commission fees related to the sale of stock by the Company’s former Chairman. On a trailing twelve-months (“TTM”) basis, the Company has now generated Adjusted EBITDA of $4.6 million, which represents a 9.5% margin. |
| · | Cash flow from operations of over $1 million in the quarter, compared to $0.3 million in the prior-year quarter. |
“Our second quarter results benefited from the continued recognition of the advantages and savings our products offer within the research process and the conclusion of the election cycle, which removed some near-term economic uncertainty. We experienced strong growth in both B2B and B2C ARR. The 61 net new B2B platform deployments represent our best organic performance ever recorded in a quarter, and we also recorded a nearly $1 million sequential increase in B2C recurring revenue. The reported net loss in the quarter is related to the continued outperformance of Scite, which experienced strong academic B2B sales in the quarter in addition to B2C growth,” said Roy W. Olivier, President and CEO of Research Solutions. “Lastly, I am delighted that during the quarter our former Chairman largely exited his ownership position, eliminating an overhang that had weighed down the stock price for some time, enabling that stock to be diversified across multiple new shareholders.”
Fiscal Second Quarter 2025 Results
Total revenue was $11.9 million, a 15.5% increase from $10.3 million in the year-ago quarter as both platform and transaction revenue increased from the prior period.
Platform subscription revenue increased 47% to $4.6 million compared to $3.1 million in the year-ago quarter. The increase was primarily due to an increase in the total number of paid Platform deployments and B2C subscribers, as well as upsells to existing customers. The quarter ended with annual recurring revenue of $19.1 million, up 23% year-over-year (see the company’s definition of annual recurring revenue below).
Transaction revenue was $7.3 million, compared to $7.2 million in the second quarter of fiscal 2024. The increase was primarily due to increased copyright revenues. The transaction customer count for the quarter was 1,384, compared to 1,398 customers in the prior-year quarter (see the Company's definition of active customer accounts and transactions below).
Total gross margin improved 540 basis points from the prior-year quarter to 48.9%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platforms business as well as increased margins in that business.
Total operating expenses were $5.7 million, compared to $4.9 million in the second quarter of 2024. The increases were related to additional costs in Sales and Marketing and Technology and Product Development, which include having a full quarter of Scite expenses in the period, compared to one month in the prior-year quarter. There was also an increase in non-cash depreciation and amortization expense associated with the acquisitions completed in fiscal year 2024.
Net loss for the second quarter was $2.0 million, or ($0.07) per share, compared to net loss of ($54,000), or nil per share, in the prior-year quarter. The quarter's results include a provision of approximately $2.4 million related to increasing the projected contingent earnout liability for Scite. Adjusted EBITDA was $963,0000, compared to $318,000 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, February 13, 2025
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-203-518-9848
Conference ID: RESEARCH
The conference call will be broadcast live and available for replay until March 13, 2025 by dialing 1-412-317-6671 and using the replay ID 11157678, and via the investor relations section of the company's website at http://researchsolutions.investorroom.com/.
Fiscal Second Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter
| Quarter Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||||||||||||
| 2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | |||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||
| Platforms | $ | 4,601,257 | $ | 3,125,584 | $ | 1,475,673 | 47.2 | % | $ | 8,930,902 | $ | 5,725,776 | $ | 3,205,126 | 56.0 | % | ||||||||||||||||
| Transactions | $ | 7,312,962 | $ | 7,188,158 | 124,804 | 1.7 | % | $ | 15,027,799 | $ | 14,648,937 | 378,862 | 2.6 | % | ||||||||||||||||||
| Total Revenue | 11,914,219 | 10,313,742 | 1,600,477 | 15.5 | % | 23,958,701 | 20,374,713 | 3,583,988 | 17.6 | % | ||||||||||||||||||||||
| Gross Profit: | ||||||||||||||||||||||||||||||||
| Platforms | 3,981,415 | 2,639,399 | 1,342,016 | 50.8 | % | 7,763,893 | 4,856,977 | 2,906,916 | 59.9 | % | ||||||||||||||||||||||
| Transactions | 1,839,678 | 1,844,403 | (4,725 | ) | -0.3 | % | 3,823,076 | 3,658,391 | 164,685 | 4.5 | % | |||||||||||||||||||||
| Total Gross Profit | 5,821,093 | 4,483,802 | 1,337,291 | 29.8 | % | 11,586,969 | 8,515,368 | 3,071,601 | 36.1 | % | ||||||||||||||||||||||
| Gross profit as a % of revenue: | ||||||||||||||||||||||||||||||||
| Platforms | 86.5 | % | 84.4 | % | 2.1 | % | 86.9 | % | 84.8 | % | 2.1 | % | ||||||||||||||||||||
| Transactions | 25.2 | % | 25.7 | % | -0.5 | % | 25.4 | % | 25.0 | % | 0.5 | % | ||||||||||||||||||||
| Total Gross Profit | 48.9 | % | 43.5 | % | 5.4 | % | 48.4 | % | 41.8 | % | 6.6 | % | ||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
| Sales and marketing | 1,343,087 | 804,927 | 538,160 | 66.9 | % | 2,533,494 | 1,489,943 | 1,043,551 | 70.0 | % | ||||||||||||||||||||||
| Technology and product development | 1,506,849 | 1,336,558 | 170,291 | 12.7 | % | 2,879,607 | 2,581,137 | 298,470 | 11.6 | % | ||||||||||||||||||||||
| General and administrative | 2,008,201 | 2,023,848 | (15,648 | ) | -0.8 | % | 3,938,377 | 4,566,717 | (628,340 | ) | -13.8 | % | ||||||||||||||||||||
| Depreciation and amortization | 306,233 | 155,749 | 150,484 | 96.6 | % | 618,328 | 215,369 | 402,959 | 187.1 | % | ||||||||||||||||||||||
| Stock-based compensation | 534,322 | 596,455 | (62,133 | ) | -10.4 | % | 952,311 | 1,188,269 | (235,958 | ) | -19.9 | % | ||||||||||||||||||||
| Foreign currency translation loss | 29,554 | (13,738 | ) | 43,292 | NM | (74,686 | ) | (7,118 | ) | (67,568 | ) | 949.3 | % | |||||||||||||||||||
| Total Operating Expenses | 5,728,246 | 4,903,799 | 824,446 | 16.8 | % | 10,847,431 | 10,034,317 | 813,114 | 8.1 | % | ||||||||||||||||||||||
| Income (loss) from operations | 92,847 | (419,997 | ) | 512,844 | 122.1 | % | 739,538 | (1,518,949 | ) | 2,258,487 | 148.7 | % | ||||||||||||||||||||
| Other Income (Expenses): | ||||||||||||||||||||||||||||||||
| Other income | (2,057,887 | ) | 376,426 | (2,434,313 | ) | NM | (1,989,362 | ) | 516,737 | (2,506,099 | ) | NM | ||||||||||||||||||||
| Provision for income taxes | (15,194 | ) | (10,057 | ) | (5,137 | ) | 51.1 | % | (61,406 | ) | (39,459 | ) | (21,947 | ) | 55.6 | % | ||||||||||||||||
| Total Other Income (Expenses): | (2,073,081 | ) | 366,369 | (2,439,450 | ) | NM | (2,050,768 | ) | 477,278 | (2,528,046 | ) | NM | ||||||||||||||||||||
| Net income (loss) | $ | (1,980,234 | ) | $ | (53,628 | ) | (1,926,606 | ) | NM | $ | (1,311,230 | ) | $ | (1,041,671 | ) | (269,559 | ) | NM | ||||||||||||||
| Adjusted EBITDA | $ | 962,956 | $ | 318,469 | $ | 644,487 | 202.4 | % | $ | 2,235,491 | $ | (122,429 | ) | $ | 2,357,920 | -1926.0 | % | |||||||||||||||
| Quarter Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||||||||||||
| 2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | |||||||||||||||||||||||||
| Platforms: | ||||||||||||||||||||||||||||||||
| B2B ARR (Annual recurring revenue*): | ||||||||||||||||||||||||||||||||
| Beginning of Period | $ | 12,187,834 | $ | 11,020,241 | $ | 1,167,593 | 10.6 | % | $ | 12,060,201 | $ | 9,444,130 | $ | 2,616,071 | 27.7 | % | ||||||||||||||||
| Incremental ARR | 550,422 | 594,507 | (44,085 | ) | -7.4 | % | 678,055 | 2,170,618 | (1,492,563 | ) | -68.8 | % | ||||||||||||||||||||
| End of Period | $ | 12,738,256 | $ | 11,614,748 | $ | 1,123,508 | 9.7 | % | $ | 12,738,256 | $ | 11,614,748 | $ | 1,123,508 | 9.7 | % | ||||||||||||||||
| Deployments: | ||||||||||||||||||||||||||||||||
| Beginning of Period | 1,029 | 880 | 149 | 16.9 | % | 1,021 | 835 | 186 | 22.3 | % | ||||||||||||||||||||||
| Incremental Deployments | 61 | 62 | (1 | ) | -1.6 | % | 69 | 107 | (38 | ) | -35.5 | % | ||||||||||||||||||||
| End of Period | 1,090 | 942 | 148 | 15.7 | % | 1,090 | 942 | 148 | 15.7 | % | ||||||||||||||||||||||
| ASP (Average sales price): | ||||||||||||||||||||||||||||||||
| Beginning of Period | $ | 11,844 | $ | 12,523 | $ | (679 | ) | -5.4 | % | $ | 11,812 | $ | 11,310 | $ | 502 | 4.4 | % | |||||||||||||||
| End of Period | $ | 11,686 | $ | 12,330 | $ | (643 | ) | -5.2 | % | $ | 11,686 | $ | 12,330 | $ | (643 | ) | -5.2 | % | ||||||||||||||
| B2C ARR (Annual recurring revenue*): | ||||||||||||||||||||||||||||||||
| Beginning of Period | $ | 5,430,795 | $ | - | $ | 5,430,795 | NM | $ | 5,363,129 | $ | - | $ | 5,363,129 | NM | ||||||||||||||||||
| Incremental ARR | 940,586 | 3,954,090 | (3,013,504 | ) | NM | 1,008,252 | 3,954,090 | (2,945,838 | ) | NM | ||||||||||||||||||||||
| End of Period | $ | 6,371,381 | $ | 3,954,090 | $ | 2,417,291 | 61.1 | % | $ | 6,371,381 | $ | 3,954,090 | $ | 2,417,291 | 61.1 | % | ||||||||||||||||
| Total ARR (Annualized recurring revenue): | $ | 19,109,637 | $ | 15,568,838 | $ | 3,540,799 | 22.7 | % | $ | 19,109,637 | $ | 15,568,838 | $ | 3,540,799 | 22.7 | % | ||||||||||||||||
| Transaction Customers: | ||||||||||||||||||||||||||||||||
| Corporate customers | 1,051 | 1,065 | (14 | ) | -1.3 | % | 1,063 | 1,078 | (15 | ) | -1.3 | % | ||||||||||||||||||||
| Academic customers | 333 | 333 | - | 0.0 | % | 325 | 319 | 6 | 1.9 | % | ||||||||||||||||||||||
| Total customers | 1,384 | 1,398 | (14 | ) | -1.0 | % | 1,388 | 1,397 | (9 | ) | -0.6 | % | ||||||||||||||||||||
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.
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, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):
| Quarter Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||||||||||||
| 2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | |||||||||||||||||||||||||
| Net Income (loss) | $ | (1,980,234 | ) | $ | (53,628 | ) | $ | (1,926,606 | ) | NM | $ | (1,311,230 | ) | $ | (1,041,671 | ) | $ | (269,559 | ) | NM | ||||||||||||
| Add (deduct): | - | |||||||||||||||||||||||||||||||
| Other (income) expense | 2,057,887 | (376,426 | ) | 2,434,313 | NM | 1,989,362 | (516,737 | ) | 2,506,099 | NM | ||||||||||||||||||||||
| Foreign currency translation loss (gain) | 29,554 | (13,738 | ) | 43,292 | NM | (74,686 | ) | (7,118 | ) | (67,568 | ) | 949.3 | % | |||||||||||||||||||
| Provision for income taxes | 15,194 | 10,057 | 5,137 | 51.1 | % | 61,406 | 39,459 | 21,947 | 55.6 | % | ||||||||||||||||||||||
| Depreciation and amortization | 306,233 | 155,749 | 150,484 | 96.6 | % | 618,328 | 215,369 | 402,959 | 187.1 | % | ||||||||||||||||||||||
| Stock-based compensation | 534,322 | 596,455 | (62,133 | ) | -10.4 | % | 952,311 | 1,188,269 | (235,958 | ) | -19.9 | % | ||||||||||||||||||||
| Adjusted EBITDA | $ | 962,956 | $ | 318,469 | $ | 644,487 | 202.4 | % | $ | 2,235,491 | $ | (122,429 | ) | $ | 2,357,920 | 1926.0 | % | |||||||||||||||
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
| 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 | ||||
Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations and Other Comprehensive Loss
(Unaudited)
| 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 | ||||||||||||
Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flow from operating activities: | ||||||||
| Net loss | $ | (1,311,230 | ) | $ | (1,041,671 | ) | ||
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 618,328 | 215,369 | ||||||
| Stock options expense | 88,045 | 61,714 | ||||||
| Restricted common stock expense | 864,266 | 1,105,606 | ||||||
| Modification cost of accelerated vesting of restricted common stock | — | 20,949 | ||||||
| Adjustment to contingent earnout liability | 2,406,886 | (268,232 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (266,255 | ) | (681,502 | ) | ||||
| Prepaid expenses and other current assets | (98,613 | ) | (67,986 | ) | ||||
| Prepaid royalties | 478,169 | 121,100 | ||||||
| Accounts payable and accrued expenses | (737,670 | ) | 349,310 | |||||
| Deferred revenue | (170,433 | ) | (241,545 | ) | ||||
| Net cash provided by (used in) operating activities | 1,871,493 | (426,888 | ) | |||||
| Cash flow from investing activities: | ||||||||
| Purchase of property and equipment | (5,404 | ) | (55,763 | ) | ||||
| Payment for acquisition of Resolute, net of cash acquired | — | (2,718,253 | ) | |||||
| Payment for acquisition of Scite, net of cash acquired | — | (7,305,493 | ) | |||||
| Net cash used in investing activities | (5,404 | ) | (10,079,509 | ) | ||||
| Cash flow from financing activities: | ||||||||
| Common stock repurchase | (205,278 | ) | (68,748 | ) | ||||
| Payment of contingent acquisition consideration | (62,560 | ) | (278,195 | ) | ||||
| Net cash used in financing activities | (267,838 | ) | (346,943 | ) | ||||
| Effect of exchange rate changes | 2,873 | 5,666 | ||||||
| Net increase (decrease) in cash and cash equivalents | 1,601,124 | (10,847,674 | ) | |||||
| Cash and cash equivalents, beginning of period | 6,100,031 | 13,545,333 | ||||||
| Cash and cash equivalents, end of period | $ | 7,701,155 | $ | 2,697,659 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for income taxes | $ | 61,406 | $ | 39,459 | ||||
| Non-cash investing and financing activities: | ||||||||
| Contingent consideration accrual on asset acquisition | $ | 30,198 | $ | 36,364 | ||||
Contact
Steven Hooser or John Beisler
Three Part Advisors
(214) 872-2710
shooser@threepa.com; jbeisler@threepa.com
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