Research Solutions(US:RSSS)2022-09-23 21:00Financial Performance - Total revenue for the year ended June 30, 2022, increased by $1,177,807, or 3.7%, compared to the prior year, reaching $32,934,152[145]. - Total revenue for the year ended June 30, 2022, was $32,934,152, a 3.7% increase from $31,756,345 in 2021[216]. - Revenue from Platforms grew by $1,652,207, or 32.2%, while Transactions revenue decreased by $474,400, or 1.8%[144]. - Gross profit increased by $1,733,660, or 16.9%, to $12,019,674, with Platforms gross profit rising by 38.5%[148]. - The net loss for the year was $1,632,384, compared to a net loss of $285,089 in the previous year, representing an increase in loss of 472.6%[144]. - Operating loss increased significantly by 476.6%, reaching $(1,631,916) for the year ended June 30, 2022[144]. - The net loss for the year ended June 30, 2022, was $1,632,384, an increase of $1,347,295 or 472.6% compared to the prior year[151]. - The company reported a loss per share of $0.06 for the year ended June 30, 2022, compared to a loss per share of $0.01 in 2021[181]. Revenue Recognition and Accounting Policies - Revenue is derived from two main sources: annual licenses for the SaaS platform and transactional sales of STM content, with revenue recognized upon delivery of services[134]. - The company’s revenue recognition follows ASC 606, ensuring that revenue reflects the transfer of goods or services to customers[133]. Operating Expenses - Total operating expenses rose by $3,082,544, or 29.2%, to $13,651,590, driven by increases in technology and product development expenses by 40.3%[149]. - Sales and marketing expenses increased by 9.8% to $2,276,172, primarily due to higher consulting expenses[149]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $10,603,175 as of June 30, 2022, down by $401,162 from $11,004,337 in the previous year[154]. - Net cash used in operating activities was $417,200 for the year ended June 30, 2022, primarily due to an increase in deferred revenue of $734,175[155]. - Net cash used in investing activities was $44,288 for the year ended June 30, 2022, compared to $19,854 in the previous year[157]. - Net cash provided by financing activities was $63,270 for the year ended June 30, 2022, resulting from proceeds from the exercise of options and warrants[158]. - The company had no outstanding borrowings under its line of credit as of June 30, 2022, with approximately $2,500,000 of available credit[162]. Foreign Currency and Exchange Rates - The average period end exchange rate for the Euro to US Dollar was 1.13 for the year ended June 30, 2022, compared to 1.19 for the previous year, reflecting a strengthening of the US Dollar[142]. - The company does not currently engage in currency hedging activities, which may expose it to risks from currency exchange fluctuations[141]. - The company experienced a foreign currency transaction loss of $143,898, compared to a gain of $(35,960) in the prior year, marking a significant change of 500.2%[149]. - The Company recorded a foreign currency transaction loss of $143,898 for the year ended June 30, 2022, compared to a gain of $35,960 in 2021[223]. Accounts Receivable and Allowance for Doubtful Accounts - The company reported an allowance for doubtful accounts of $94,144 as of June 30, 2022, compared to $51,495 as of June 30, 2021, indicating an increase of approximately 83% year-over-year[140]. - Accounts receivable increased to $5,251,545 as of June 30, 2022, from $4,717,453 in 2021, indicating growth in sales but also potential collection challenges[181]. - Accounts receivable as of June 30, 2022, totaled $5,251,545, an increase of 11.3% from $4,717,453 in 2021[217]. Taxation - Provision for income taxes increased by $4,418 to $7,622 for the year ended June 30, 2022[164]. - The provision for income tax expense for the year ended June 30, 2022, was $7,622, which is an increase from $3,204 in 2021, representing a 138% rise[260]. - The total deferred tax assets increased to $5,124,208 as of June 30, 2022, compared to $4,746,592 in 2021, reflecting a growth of 8%[261]. - The net change in the valuation allowance for deferred tax assets for the year ended June 30, 2022, was an increase of $379,223[262]. - The company had federal net operating loss (NOL) carryforwards of approximately $15,040,000 as of June 30, 2022, slightly up from $15,030,000 in 2021[263]. Stock and Equity - The company’s additional paid-in capital rose to $28,072,855 as of June 30, 2022, compared to $26,982,052 in 2021, reflecting ongoing investment and capital raising efforts[184]. - The Company granted 307,843 options to employees during the year ended June 30, 2022, with a fair value of $342,566[239]. - The total fair value of options that vested during the year ended June 30, 2022, was $470,615, included in selling, general and administrative expenses[239]. - The total fair value of restricted common stock vested during the year ended June 30, 2022, was $557,496, compared to $376,338 in 2021, indicating a 48% increase[247]. - The Company issued 36,509 shares of unrestricted stock valued at $68,273 on July 30, 2022, which was expensed in the year ended June 30, 2022[266]. - On August 19, 2022, the company issued 222,334 shares of restricted stock valued at $431,300, which will be amortized over a three-year vesting period[267]. - The maximum number of shares that may be issued under the 2017 Omnibus Incentive Plan increased from 3,374,513 to 6,874,513 as approved by stockholders on November 17, 2021[234]. - As of June 30, 2022, there were 3,935,596 shares available for grant under the 2017 Omnibus Incentive Plan[235]. - The Company repurchased options underlying 243,750 shares of stock for $213,313 on March 31, 2021[241]. - During the year ended June 30, 2022, the company repurchased 40,221 shares of common stock at an average price of approximately $2.34 per share, totaling $93,918[251]. - As of June 30, 2022, $255,345 remains under the current authorization to repurchase outstanding common stock from employees[251]. Research and Development - The platform provides access to over 80 million existing STM articles and over one million newly published STM articles each year, enhancing research capabilities for customers[125]. - The company’s cloud-based SaaS research platform allows for electronic delivery of articles, typically within one hour, with many delivered in under one minute, improving efficiency for researchers[126]. - The company has added interactive app-like components to its platform, aimed at improving data gathering and extraction processes for researchers[123]. - The platform is designed to provide a return on investment by effectively managing transaction costs and saving researchers time[121]. - Research Solutions aims to expand its market presence by leveraging its platform's capabilities to provide a comprehensive solution for research-intensive organizations[190]. - The company continues to enhance its cloud-based SaaS research platform with new interactive app-like components to improve user experience and efficiency[192].