Research Solutions Inc
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 14, 2025
RSSS$1.820.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001558370-24-015749
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001558370-25-001010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 66 current paragraphs.
39 unchanged; 16 reworded; 10 added; 6 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 25 previous and 38 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Goodwill
Current report
We follow ASC 350 in accounting for goodwill, which states that goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. Our policy is to perform an annual impairment testing for its reporting unit on June 30 of each fiscal year.
Current report
Intangible Assets
Current report
We follow ASC 360 in accounting for finite-lived intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. For the period ended December 31, 2024 and June 30, 2024, we determined there were no indicators of impairment of its intangible assets.
Current report
Depending on the type of the restricted stock award, the fair value of our restricted common stock is estimated based on the market price of our common stock on the date of grant or with the assistance of a valuation specialist, using the Monte Carlo simulations on a binomial model with a derived service period. Compensation expense is recorded based upon the fair value derived from the market price of our common stock or the Monte Carlo simulations.
Current report
Total revenue increased $3,583,988, or 17.6%, for the six months ended December 31, 2024 compared to the prior year, due to the following:
Current report
Net Loss
Current report
Net loss increased $1,926,606, or 3,592%, for the three months ended December 31, 2024 compared to the prior year, primarily due to charges related to increasing the estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024.
Current report
Net loss increased $269,559, or 25.9%, for the six months ended December 31, 2024 compared to the prior year, primarily due to charges related to increasing the estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024, partially offset by increased gross profit as described above.
Current report
Net cash provided by operating activities was $1,871,493 for the six months ended December 31, 2024 and resulted primarily from an adjustment to contingent earnout liability of $2,406,886 and a decrease in prepaid royalties of $478,169, partially offset by a decrease in accounts payable and accrued expenses of $737,670 and an increase in accounts receivable of $266,255.
Removed paragraphs (6)
Previous report
Inflation Risk
Previous report
We do not believe that inflation has had a material effect on its operations to date, other than its impact on the general economy. However, there is a risk that our operating costs could become subject to inflationary and interest rate pressures in the future, which would have the effect of increasing our operating costs, and which would put additional stress on our working capital resources.
Previous report
Quarterly Information (Unaudited)
Previous report
The following table sets forth unaudited and quarterly financial data for the most recent eight quarters:
Previous report
Net Income (Loss)
Previous report
Net income increased $1,657,047, or 167.7%, for the three months ended September 30, 2024 compared to the prior year, primarily due to increased gross profit and decreased operating expenses as described above.
Reworded paragraphs (16)
Previous wording
The following discussion and analysis of our financial condition and results of operations for the three months ended September 30, 2024 and 2023 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Current wording
The following discussion and analysis of our financial condition and results of operations for the three and six months ended December 31, 2024 and 2023 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Previous wording
We are a vertical SaaS and artificial intelligence (“AI”) company providing software and related services to help research intensive organizations simplify the research process, save time and money. We offer various software platforms (“Platform” or “Platforms”) that are typically sold to corporate, academic, government and individual researchers as cloud-based software-as-a-service (“SaaS”) via auto-renewing license agreements. Corporate, academic, and government customers typically sign up under annual or multi-year agreements paid annually in advance. Individual researchers can sign up under an annual or a month-to-month agreement and are typically billed monthly. Our Platforms also facilitate the sale of published scientific, technical, and medical (“STM”) content sold as individual articles (“Transactions”) either stand alone or via one or more of the research Platform solutions we provide. When one or more of the Platform solutions are used to purchase Transactions, customers pay for those transactions through monthly billing or via credit card for individual researchers. In addition, our Platforms facilitate rights and permissions for customers to re-use content, ensuring copyright compliance for research, regulatory and marketing use cases as well as the utilization of content with AI applications and for the training of AI models. Our Platforms enable life science and other research-intensive organizations to simplify their research and development activities through our advanced search (i.e. Discovery Tools), tools to access and buy STM articles required to support their research (i.e. Access), as well as tools that manage that content across the enterprise and on an individual basis (i.e. Manage). The Platforms also include advanced AI (“Generative AI”) based assistants to help researchers understand the quality of the articles they are reviewing, speed up the review process, and to more fully understand how various research papers relate to each other. In addition to STM content, the Platforms provide additional context to the research process by including the ability to search and assimilate a variety of other types of data such as Patent, Clinical Trial, Regulatory and Competitive Intelligence data. They also typically deliver a return on investment to the customer by reducing the amount of time it takes a research organization to find, acquire and manage content, in addition to also driving down the ultimate cost per article and overall research costs over time.
Current wording
We are a vertical software-as-a-service (“SaaS”) and artificial intelligence (“AI”) company providing software and related services to help research-intensive organizations simplify the research process, save time and money. We offer various software platforms (“Platform” or “Platforms”) that are typically sold to corporate, academic, government and individual researchers as cloud-based SaaS via auto-renewing license agreements. Corporate, academic, and government customers typically sign up under annual or multi-year agreements paid annually in advance. Individual researchers can sign up under an annual or a month-to-month agreement and are typically billed monthly. Our Platforms also facilitate the sale of published scientific, technical, and medical (“STM”) content sold as individual articles (“Transactions”) either stand alone or via one or more of the research Platform solutions we provide. When one or more of the Platform solutions are used to purchase Transactions, customers pay for those transactions through monthly billing or via credit card for individual researchers. In addition, our Platforms facilitate rights and permissions for customers to re-use content, ensuring copyright compliance for research, regulatory and marketing use cases as well as the utilization of content with AI applications and for the training of AI models. Our Platforms enable life science and other research-intensive organizations to simplify their research and development activities through our advanced search (i.e. Discovery Tools), tools to access and buy STM articles required to support their research (i.e. Access), as well as tools that manage that content across the enterprise and on an individual basis (i.e. Manage). The Platforms also include advanced AI (“Generative AI”) based assistants to help researchers understand the quality of the articles they are reviewing, speed up the review process, and to more fully understand how various research papers relate to each other. In addition to STM content, the Platforms provide additional context to the research process by including the ability to search and assimilate a variety of other types of data such as Patent, Clinical Trial, Regulatory and Competitive Intelligence data. They also typically deliver a return on investment to the customer by reducing the amount of time it takes a research organization to find, acquire and manage content, in addition to also driving down the ultimate cost per article and overall research costs over time.
Previous wording
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ under different estimates and assumptions.
Current wording
The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ under different estimates and assumptions.
Previous wording
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We derive our revenues from two sources: annual or monthly licenses that allow customers to access and utilize certain premium features of our cloud-based SaaS research intelligence platforms (“Platform” or “Platforms”) and the transactional sale of STM content managed, sourced and delivered through the Platform (“Transactions”).
Current wording
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We derive our revenues from two sources: annual or monthly licenses that allow customers to access and utilize certain premium features of our cloud-based SaaS research intelligence platforms and the transactional sale of STM content managed, sourced and delivered through the Platform.
Previous wording
The fair value of our stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.
Current wording
The fair value of our stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options and future dividends. Compensation expense is recorded based upon the fair value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in current and future periods.
Previous wording
Comparison of the Three Months Ended September 30, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended December 31, 2024 and 2023
Previous wording
Total revenue increased $1,983,511, or 19.7%, for the three months ended September 30, 2024 compared to the prior year, due to the following:
Current wording
Total revenue increased $1,600,477, or 15.5%, for the three months ended December 31, 2024 compared to the prior year, due to the following:
Previous wording
Total cost of revenue as a percentage of revenue decreased 7.8%, from 59.9% for the previous year to 52.1%, for the three months ended September 30, 2024.
Current wording
Total cost of revenue as a percentage of revenue decreased 5.4%, from 56.5% for the previous year to 51.1%, for the three months ended December 31, 2024.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $6,924,773, compared to $6,100,031 as of June 30, 2024, an increase of $824,742. This increase was primarily due to cash provided by operating activities.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $7,701,155, compared to $6,100,031 as of June 30, 2024, an increase of $1,601,124. This increase was primarily due to cash provided by operating activities.
Previous wording
Net cash provided by operating activities was $843,119 for the three months ended September 30, 2024 and resulted primarily from a decrease in accounts receivable of $566,194 and a decrease in prepaid royalties of $494,713, partially offset by a decrease in deferred revenue of $992,792.
Current wording
Net cash used in operating activities was $426,888 for the six months ended December 31, 2023 and resulted primarily from an increase in accounts receivable of $681,502 and a decrease in deferred revenue of $241,545, partially offset by a decrease in prepaid royalties of $121,100.
Previous wording
Net cash used in investing activities was $0 for the three months ended September 30, 2024.
Current wording
Net cash used in investing activities was $5,404 for the six months ended December 31, 2024 and resulted from the purchase of property and equipment.
Previous wording
Net cash used in investing activities was $2,752,078 for the three months ended September 30, 2023 and resulted primarily from the payment for the ResoluteAI acquisition of $2,718,253.
Current wording
Net cash used in investing activities was $10,079,509 for the six months ended December 31, 2023 and resulted primarily from the payment for the Scite acquisition of $7,305,493 and the payment for the ResoluteAI acquisition of $2,718,253.
Previous wording
Net cash used in financing activities was $156,325 for the three months ended September 30, 2023 and resulted from the payment of contingent acquisition consideration of $110,190 and the repurchase of common stock of $46,135.
Current wording
Net cash used in financing activities was $267,838 for the six months ended December 31, 2024 and resulted from the payment of contingent acquisition consideration of $62,560 and the repurchase of common stock of $205,278.
Previous wording
Net cash used in financing activities was $16,119 for the three months ended September 30, 2024 and resulted from repurchase of common stock of $16,119.
Current wording
Net cash used in financing activities was $346,943 for the six months ended December 31, 2023 and resulted from the payment of contingent acquisition consideration of $278,195 and the repurchase of common stock of $68,748.
Previous wording
In addition to our GAAP results, we present Adjusted EBITDA as a supplemental measure of our performance. However, Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of liquidity. We define Adjusted EBITDA 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, income from discontinued operations and gain on sale of discontinued operations. Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Current wording
In addition to our GAAP results, we present Adjusted EBITDA as a supplemental measure of our performance. However, Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of liquidity. We define Adjusted EBITDA 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, income from discontinued operations and gain on sale of discontinued operations. Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Previous wording
Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the three months ended September 30, 2024 and 2023:
Current wording
Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the three and six months ended December 31, 2024 and 2023:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Total cost of revenue as a percentage of revenue decreased 6.6%, from 58.2% for the previous year to 51.6%, for the six months ended December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net cash used in operating activities was $755,571 for the three months ended September 30, 2023 and resulted primarily from a decrease in deferred revenue of $646,830 and an increase in accounts receivable of $112,965.