What changed in this filing

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Item 1A. Risk Factors

2020-09-24 compared with 2019-09-19 · 82 added, 95 removed, 435 unchanged (29% of the section changed)

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You should carefully consider the risks and uncertainties described below, together

with all of the other information in this prospectus, including our consolidated financial statements and related notes, before

investing in our common stock.

The following summarizes material risks that investors should carefully consider before deciding

to buy or maintain an investment in our common stock.

Any of the following risks, if they actually occur, would likely harm our

business, financial condition and results of operations.

As a result, the trading price of our common stock could decline, and

investors could lose the money they paid to buy our common stock.

with all of the other information in this report, including our consolidated financial statements and related notes, before investing

in our common stock.

The following summarizes material risks that investors should carefully consider before deciding to buy or

maintain an investment in our common stock.

Any of the following risks, if they actually occur, would likely harm our business,

financial condition and results of operations.

As a result, the trading price of our common stock could decline, and investors

could lose the money they paid to buy our common stock.

Risks Related to Our Business and Our

We have incurred

significant losses, and may be unable to maintain profitability.

If we continue to incur losses, we may have to curtail our operations,

which may prevent us from successfully operating and expanding our business.

We have historically

incurred significant losses, and may be unable to maintain profitability.

If we continue to incur significant losses, we may have

to curtail our operations, which may prevent us from successfully operating and expanding our business.

Historically, we have

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significant losses and experienced negative cash flow.

For our fiscal years ended June 30, 2019 and 2018, we incurred a net loss

of $959,958 and $1,678,741, respectively.

For our fiscal years ended June 30, 2020 and 2019, we incurred a net

loss of $662,242 and $959,958, respectively.

As of June 30, 2020, we had an accumulated deficit of $21,176,799.

We cannot predict

if we will be profitable.

We may continue to incur losses for an indeterminate period of time and may be unable to sustain profitability.

An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business.

be unable to sustain or increase our profitability on a quarterly or annual basis.

predict if we will be profitable.

We may continue to incur losses for an indeterminate period of time and may be unable to sustain

profitability.

An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our

We may be unable to sustain or increase our profitability on a quarterly or annual basis.

The loss of our

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in part upon the continued service of Peter Victor Derycz, who is our President and Chief Executive Officer.

Derycz is critical

to the overall management of our company as well as to the development of our technologies, our culture and our strategic direction

and is instrumental in developing and maintaining close ties with our customer base.

We also rely heavily on our senior management

team because they have substantial experience with our diverse service offerings and business strategies.

In addition, we rely

on our senior management team to identify internal expansion and external growth opportunities.

Our ability to retain senior management

and other key personnel is therefore very important to our future success.

We have employment agreements with our senior management,

but these employment agreements do not ensure that they will not voluntarily terminate their employment with us.

In addition, our

key personnel are subject to non-solicitation and confidential information restrictions.

We do not have key man insurance for any

of our current management or other key personnel.

The loss of any key personnel would require the remaining key personnel to divert

immediate attention to seeking a replacement.

Competition for senior management personnel is intense, and fit is important to us.

Our inability to find a suitable replacement for any departing executive officer or key employee on a timely basis could adversely

affect our ability to operate and grow our business.

critical to the overall management of our company as well as to the development of our technologies, our culture and our strategic

direction and is instrumental in developing and maintaining close ties with our customer base.

We also rely heavily on our senior

management team because they have substantial experience with our diverse service offerings and business strategies.

we rely on our senior management team to identify internal expansion and external growth opportunities.

Our ability to retain senior

management and other key personnel is therefore very important to our future success.

We have employment agreements with our senior

management, but these employment agreements do not ensure that they will not voluntarily terminate their employment with us.

addition, our key personnel are subject to non-solicitation and confidential information restrictions.

We do not have key man insurance

for any of our current management or other key personnel.

The loss of any key personnel would require the remaining key personnel

to divert immediate attention to seeking a replacement.

Competition for senior management personnel is intense, and fit is important

Our inability to find a suitable replacement for any departing executive officer or key employee on a timely basis could

adversely affect our ability to operate and grow our business.

We rely on our

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We currently have a

line of credit with Silicon Valley Bank, maturing on December 31, 2019, under which there were no outstanding borrowings as of

June 30, 2019.

Our loan agreement contains, and any agreements to refinance our debt likely will contain, financial and restrictive

We were in compliance with these covenants as of June 30, 2019, however, our failure to comply with these covenants

in the future may result in an event of default, which if not cured or waived, could result in the bank preventing us from accessing

availability under our line of credit and requiring us to repay any outstanding borrowings.

There can be no assurance that we will

be able to obtain waivers of future covenant violations or that such waivers will be available on commercially acceptable terms.

line of credit with Silicon Valley Bank, maturing on February 14, 2022, under which there were no outstanding borrowings as

of June 30, 2020.

Our loan agreement contains, and any agreements to refinance our debt likely will contain, financial and

restrictive covenants.

We were in compliance with these covenants as of June 30, 2020, however, our failure to comply with

these covenants in the future may result in an event of default, which if not cured or waived, could result in the bank preventing

us from accessing availability under our line of credit and requiring us to repay any outstanding borrowings.

There can be no assurance

that we will be able to obtain waivers of future covenant violations or that such waivers will be available on commercially acceptable

In addition, the indebtedness

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Acquisitions,

joint ventures or similar strategic relationships may disrupt or otherwise have a material adverse effect on our business and

financial results.

joint ventures or similar strategic relationships may disrupt or otherwise have a material adverse effect on our business and financial

As part of our strategy,

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potential costs of complying with rules and regulations of foreign jurisdictions.

Any adverse consequence resulting from the materialization

of the foregoing risks would adversely affect our financial performance and results of operations.

Any adverse consequence resulting from the

materialization of the foregoing risks would adversely affect our financial performance and results of operations.

Unfavorable general

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businesses may seek to reduce spending on our services, or shift away from our services to in-house alternatives.

pandemic could negatively impact our future operations and results.

We are subject to risks

and uncertainties as a result of the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic on our business is highly

uncertain and difficult to predict, as the responses that we, other businesses and governments are taking continue to evolve.

capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it

could cause a local and/or global economic recession.

Policymakers around the globe have responded with fiscal policy actions to

support the healthcare industry and economy as a whole.

The magnitude and overall effectiveness of these actions remain uncertain.

To date, we have not

experienced any significant changes in our business that would have a significant negative impact on our consolidated statements

of operations or cash flows.

The severity of the

impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration

and severity of the pandemic and the extent and severity of the impact on our customers, service providers and suppliers, all of

which are uncertain and cannot be predicted.

As of the date of issuance of our financial statements, the extent to which the COVID-19

pandemic may in the future materially impact our financial condition, liquidity or results of operations is uncertain.

Risks Relating to Ownership of Our Common

predict the extent to which an active public trading market for our common stock will develop or be sustained.

If an active public

trading market does not develop or cannot be sustained, you may be unable to liquidate your investment in our common stock.

We cannot predict

the extent to which an active public trading market for our common stock will develop or be sustained.

If an active public trading

market does not develop or cannot be sustained, you may be unable to liquidate your investment in our common stock.

We cannot predict the

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a return on your investment might only occur if the market price of our common stock appreciates.

power of a significant percentage of our common stock is held by our president and chief executive officer, and his brother-in-law,

who together are able to exert significant influence over the outcome of matters to be voted on by our stockholders.

of a significant percentage of our common stock is held by our president and chief executive officer, and his brother-in-law, who

together are able to exert significant influence over the outcome of matters to be voted on by our stockholders.

As of September 18,

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exercise of our warrants or options.

Because we are

subject to the “Penny Stock”

rules, the level of trading activity in our common stock may be reduced.

Our common stock is

currently quoted on the OTCQB tier of the OTC Markets Group Inc., under the symbol “RSSS.”

On September 13, 2019, the

last reported sale price of our common stock on the OTCQB was $2.64.

As a result, our common stock constitutes a “Penny Stock.”

Broker-dealer practices in connection with transactions in Penny Stocks are regulated by rules adopted by the Securities and Exchange

Commission, or SEC.

Penny Stocks are generally equity securities with a price per share of less than $5.00 (other than securities

registered on certain national exchanges).

The Penny Stock rules require a broker-dealer, prior to a transaction in Penny Stocks

not exempt from the rules, to deliver a standardized risk disclosure document that provides information about Penny Stocks and

the nature and level of risks in the Penny Stock market.

The broker-dealer must also provide the customer with current bid and

offer quotations for the Penny Stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly

accounting statements showing the market value of each Penny Stock held in the customer’s account.

In addition, the broker-dealer

must make a special written determination that the Penny Stock is a suitable investment for the purchaser and receive the purchaser’s

written agreement to the transaction.

These requirements may have the effect of reducing the level of trading activity in a Penny

Stock, such as our common stock, and investors in our common stock may find it difficult to sell their shares.

Because our common

stock is not currently listed on a national securities exchange, you may find it difficult to dispose of or obtain quotations for

our common stock.

Our common stock is

quoted on the OTCQB under the symbol “RSSS.”

Because our stock is quoted on the OTCQB rather than on a national securities

exchange, you may find it difficult to either dispose of, or to obtain quotations as to the price of, our common stock.

Failure to achieve

and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in a restatement

of our financial statements, cause investors to lose confidence in our financial statements and our company and have a material

adverse effect on our business and stock price.

and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in

a restatement of our financial statements, cause investors to lose confidence in our financial statements and our company and have

a material adverse effect on our business and stock price.

We produce our financial

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satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404.

Further, Section 404 requires annual

management assessments of the effectiveness of our internal controls over financial reporting.

Further, Section 404

requires annual management assessments of the effectiveness of our internal controls over financial reporting.

Testing and maintaining

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broad authority to determine voting, dividend, conversion, and other rights.

June 30, 2019 we had issued and outstanding 24,375,948 shares of common stock and we had 5,709,581 shares of common stock reserved

for future grants under our equity compensation plans and for issuances upon the exercise or conversion of currently outstanding

June 30, 2020 we had issued and outstanding 26,032,263 shares of common stock and we had 4,335,009 shares of common stock

reserved for future grants under our equity compensation plans and for issuances upon the exercise or conversion of currently outstanding

options, warrants and convertible securities.

As of June 30, 2020, we had no shares of preferred stock issued and outstanding.

Accordingly, as of June 30, 2019, we could issue up to 69,914,471 additional shares of common stock and 20,000,000 additional shares

of “blank check”

Accordingly, as of June 30, 2020, we could issue up to 69,632,728 additional shares of common stock and 20,000,000 additional

shares of “blank check”

preferred stock.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors