What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2020-09-24 compared with 2019-09-19 · 175 added, 175 removed, 318 unchanged (52% of the section changed)

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Market Information and Approximate Number of Holders of Common

Our common stock is

quoted on the OTCQB under the symbol "RSSS."

The following table sets forth, for the periods indicated, the

reported high and low bid quotations for our common stock as reported on the OTCQB.

The bid prices reflect inter-dealer quotations,

do not include retail markups, markdowns, or commissions, and do not necessarily reflect actual transactions

of March 23, 2020, our common stock is quoted on The NASDAQ Stock Market LLC’s Nasdaq Capital Market (the “NASDAQ”)

under the symbol "RSSS,"

and prior to that it was quoted on the OTCQB.

The following table sets forth, for

the periods indicated, the reported high and low bid quotations for our common stock as reported on the NASDAQ or the OTCQB.

bid prices reflect inter-dealer quotations, do not include retail markups, markdowns, or commissions, and do not necessarily reflect

actual transactions

Year Ended June 30, 2020:

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Fourth Quarter (April 1 –

June 30, 2018:

Year Ended June 30, 2019:

First Quarter (July 1 –

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Common Stock Repurchases

Effective as of February

8, 2018, the Compensation Committee of our Board of Directors authorized the repurchase, during calendar year 2018 on the last

day of each trading window and otherwise in accordance with our insider trading policies, of up to $300,000 of outstanding common

stock (at prices no greater than $3.00 per share) from our employees to satisfy their tax obligations in connection with the vesting

Effective as of November 13,

2018, the Compensation Committee of our Board of Directors authorized the repurchase, during calendar year 2019 on the last day

of each trading window and otherwise in accordance with our insider trading policies, of up to $300,000 of outstanding common stock

(at prices no greater than $3.00 per share) from our employees to satisfy their tax obligations in connection with the vesting

of stock incentive awards.

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and will depend on their evaluation of market conditions and other factors.

Effective as of November

13, 2018, the Compensation Committee of our Board of Directors authorized the repurchase, during calendar year 2019 on the last

day of each trading window and otherwise in accordance with our insider trading policies, of up to $300,000 of outstanding common

stock (at prices no greater than $3.00 per share) from our employees to satisfy their tax obligations in connection with the vesting

Effective as of February 11,

2020, the Compensation Committee of our Board of Directors authorized the repurchase, during calendar year 2020 on the last day

of each trading window and otherwise in accordance with our insider trading policies, of up to $400,000 of outstanding common stock

(at prices no greater than $4.00 per share) from our employees to satisfy their tax obligations in connection with the vesting

of stock incentive awards.

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During the years ended

June 30, 2019 and 2018, we repurchased 88,250 and 120,900 shares of our common stock under the repurchase plan at an average price

of approximately $2.27 and $1.26 per share, respectively, for an aggregate amount of $200,023 and $152,739, respectively.

June 30, 2019, $213,255 remains under the current authorization to repurchase our outstanding common stock from our employees.

June 30, 2020 and 2019, we repurchased approximately 116,200 and 88,250 shares of our common stock under the repurchase plan

at an average price of approximately $2.77 and $2.27 per share, respectively, for an aggregate amount of $321,602 and $200,023,

respectively.

As of June 30, 2020, $277,774 remains under the current authorization to repurchase our outstanding common stock

from our employees.

Shares repurchased

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Plans or Programs

Consists of shares of common stock purchased from employees to satisfy tax obligations in connection with the vesting

of stock incentive awards.

Consists of shares of common stock purchased from employees to satisfy tax obligations in connection with the vesting of stock

incentive awards.

Equity Compensation Plan Information

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The following discussion

and analysis of our financial condition and results of operations for the years ended June 30, 2019 and 2018 should be read in

conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere

and analysis of our financial condition and results of operations for the years ended June 30, 2020 and 2019 should be read

in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere

in this report.

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Research Solutions

was incorporated in the State of Nevada on November 2, 2006, and is a publicly traded holding company with two wholly owned subsidiaries

at June 30, 2019:

was incorporated in the State of Nevada on November 2, 2006, and is a publicly traded holding company with two wholly owned

subsidiaries at June 30, 2020:

Reprints Desk, Inc., a Delaware corporation and Reprints Desk Latin America S.

de C.V, an entity organized

under the laws of Mexico.

two service offerings to our customers:

annual licenses that allow customers to access and utilize certain premium features of

our cloud based software-as-a-service (“SaaS”) research intelligence platform (“Platforms”) and the transactional

sale of published scientific, technical, and medical (“STM”) content managed, sourced and delivered through the Platform

de C.V, an entity organized under the laws of Mexico.

We provide two service

offerings to our customers:

annual licenses that allow customers to access and utilize certain premium features of our cloud based

software-as-a-service (“SaaS”) research intelligence platform (“Platforms”) and the transactional sale

of published scientific, technical, and medical (“STM”) content managed, sourced and delivered through the Platform

(“Transactions”).

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and data used throughout the intellectual property development lifecycle.

Our cloud-based SaaS research intelligence platform consists of proprietary software and Internet-based

interfaces sold to customers for an annual subscription fee.

Legacy functionality allows customers to initiate orders, route orders

for the lowest cost acquisition, manage transactions, obtain spend and usage reporting, automate authentication, and connect seamlessly

to in-house and third-party software systems.

Customers can also enhance the information resources they already own or license

and collaborate around bibliographic information.

Our cloud-based

SaaS research intelligence platform consists of proprietary software and Internet-based interfaces sold to customers for an annual

subscription fee.

Legacy functionality allows customers to initiate orders, route orders for the lowest cost acquisition, manage

transactions, obtain spend and usage reporting, automate authentication, and connect seamlessly to in-house and third-party software

Customers can also enhance the information resources they already own or license and collaborate around bibliographic

functionality has recently been added to our Platform in the form of interactive app-like gadgets.

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These individuals are our primary users.

Our Platform allows customers to find and download digital versions of STM articles that are critical

to their research.

Customers submit orders for the articles they need which we source and electronically deliver to them generally

in under an hour.

This service is generally known in the industry as single article delivery or document delivery.

We also obtain

the necessary permission licenses from the content publisher or other rights holder so that our customer’s use complies with

applicable copyright laws.

We have arrangements with hundreds of content publishers that allow us to distribute their content.

The majority of these publishers provide us with electronic access to their content, which allows us to electronically deliver

single articles to our customers often in a matter of minutes.

allows customers to find and download digital versions of STM articles that are critical to their research.

Customers submit orders

for the articles they need which we source and electronically deliver to them generally in under an hour.

This service is generally

known in the industry as single article delivery or document delivery.

We also obtain the necessary permission licenses from the

content publisher or other rights holder so that our customer’s use complies with applicable copyright laws.

We have arrangements

with hundreds of content publishers that allow us to distribute their content.

The majority of these publishers provide us with

electronic access to their content, which allows us to electronically deliver single articles to our customers often in a matter

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.

Critical Accounting Policies and Estimates

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Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue

from Contracts with Customers (Topic 606), ("ASC 606").

The underlying principle of ASC 606 is to recognize revenue to

depict the transfer of goods or services to customers at the amount expected to be collected.

We adopted the guidance of ASC 606

on July 1, 2018.

The implementation of ASC 606 had no impact on the consolidated financial statements and no cumulative effect

adjustment was recognized.

In May 2014, the

Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606),

("ASC 606").

The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services

to customers at the amount expected to be collected.

We adopted the guidance of ASC 606 on July 1, 2018.

The implementation

of ASC 606 had no impact on the consolidated financial statements and no cumulative effect adjustment was recognized.

Revenues are recognized

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our agreements:

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations

in the contract;

recognize revenue as the performance obligation is satisfied.

the contract with a customer;

the performance obligations in the contract;

the transaction price;

the transaction price to performance obligations in the contract;

revenue as the performance obligation is satisfied.

a subscription fee that allows customers to access and utilize certain premium features of our Platform.

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Stock-Based Compensation

We periodically issue

stock options, warrants and restricted stock to employees and non-employees for services, in capital raising transactions, and

for financing costs.

We account for share-based payments under the guidance as set forth in the Share-Based Payment Topic 718 of

the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based

payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair

We estimate the fair value of stock option and warrant awards to employees and directors on the date of grant using an

option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over

the required service period in our Statements of Operations.

We estimate the fair value of restricted stock awards to employees

and directors using the market price of our common stock on the date of grant, and the value of the portion of the award that is

ultimately expected to vest is recognized as expense over the required service period in our Statements of Operations.

for share-based payments to non-employees in accordance with Topic 505 of the FASB Accounting Standards Codification, whereby the

value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment

is reached, or b) the date at which the necessary performance to earn the equity instruments is complete.

Stock-based compensation

is based on awards ultimately expected to vest and is reduced for estimated forfeitures.

Forfeitures are estimated at the time

of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.

periodically issue stock options, warrants and restricted stock to employees and non-employees for services, in capital raising

transactions, and for financing costs.

We account for share-based payments under the guidance as set forth in the Share-Based Payment

Topic 718 of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense

for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based

on estimated fair values.

We estimate the fair value of stock option and warrant awards to employees and directors on the date

of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized

as expense over the required service period in our Statements of Operations.

We estimate the fair value of restricted stock awards

to employees and directors using the market price of our common stock on the date of grant, and the value of the portion of the

award that is ultimately expected to vest is recognized as expense over the required service period in our Statements of Operations.

In prior periods through June 30, 2019, we accounted for share-based payments to non-employees in accordance with Topic

505 of the FASB Accounting Standards Codification, whereby the value of the stock compensation is based upon the measurement date

as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance

to earn the equity instruments is complete.

Stock-based compensation is based on awards ultimately expected to vest and is reduced

for estimated forfeitures.

Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual

forfeitures differ from those estimates.

On July 1, 2019,

we adopted Accounting Standards Update (ASU) 2018-07 which expands the scope of Topic 718 to include share-based payment transactions

for acquiring goods and services from nonemployees.

As a result, nonemployee share-based transactions will be measured by estimating

the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance

The adoption of the standard did not have a material impact on our financial statements.

Allowance for doubtful accounts

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receivable outstanding.

We established an allowance for doubtful accounts of $100,175 and $115,040 as of June 30, 2019 and

2018, respectively.

We established an allowance for doubtful accounts of $88,485 and $100,175 as of June 30, 2020

and 2019, respectively.

Foreign Currency

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sets forth unaudited and quarterly financial data for the four quarters of fiscal years 2020 and 2019:

Cost of revenue:

Total revenue

Cost of revenue:

Total cost of revenue

Gross profit:

Operating expenses:

and marketing

and product dev.

and administrative

and amortization

currency transaction loss (gain)

Total gross profit

Operating expenses:

income (expenses and income taxes)

Sales and marketing

Technology and product dev.

General and administrative

Depreciation and amortization

Stock-based comp.

Foreign currency transaction loss (gain)

Total operating expenses

Other income (expenses and income taxes)

Loss from continuing operations

Income from discontinued

on sale of discontinued operations

income (loss)

Basic income (loss) per

common share:

per share from continuing operations

per share from discontinued operations

income (loss) per share

weighted average common shares outstanding

Diluted income (loss)

per common share:

per share from continuing operations

per share from discontinued operations

income (loss) per share

weighted average common shares outstanding

Gain on sale of discontinued operations

Net income (loss)

Basic income (loss) per common share:

Loss per share from continuing operations

Income per share from discontinued operations

Net income (loss) per share

Basic weighted average common shares outstanding

Diluted income (loss) per common share:

Loss per share from continuing operations

Income per share from discontinued operations

Net income (loss) per share

Diluted weighted average common shares outstanding

Comparison of the Years Ended June 30, 2020 and 2019

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Loss from operations

Other income (expenses):

Interest expense

Total other income

Loss from operations before provision for income taxes

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Gain from sale of discontinued operations

$ (1,678,741 )

Years Ended June 30,

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Billings or payments received in advance of revenue recognition are recorded as deferred revenue.

Decreased primarily due to a reduction in orders from existing customers, largely offset by orders from new customers.

Increased primarily due to orders from new customers.

Cost of Revenue

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Decreased primarily due to proportionally lower third-party data costs.

Decreased primarily due to proportionally lower personnel and copyright costs.

Decreased primarily due to proportionally lower copyright and personnel costs.

Years Ended June 30,

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Stock-based compensation expense

Foreign currency transaction loss (gain)

Foreign currency transaction loss

Total operating expenses

Sales and marketing

Decreased primarily due to lower personnel costs.

Technology and product development

Increased primarily due to greater personnel costs.

primarily due to greater personnel costs and advertising media spend.

General and administrative

Increased primarily due to greater personnel costs.

Interest Expense

For the year ended

June 30, 2019, interest expense was $0, compared to $4,000 for the prior year, a decrease of $4,000.

Increased primarily due to greater personnel costs, professional service fees and NASDAQ entry fee.

Provision for Income Taxes

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$ (1,174,695 )

$ (1,935,736 )

Income from discontinued operations

Total net loss

$ (1,678,741 )

Loss from continuing

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Consolidated Statements of Cash Flow Data:

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes

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Cash and cash equivalents, end of period

Since our inception,

we have funded our operations primarily through private sales of equity securities and the exercise of warrants, which have provided

aggregate net cash proceeds to date of approximately $15,972,000.

As of June 30, 2019, we had working capital of $2,867,562 and

stockholders’

equity of $3,031,715.

For the year ended June 30, 2019, we recorded a net loss of $959,958, cash provided by

operating activities was $576,446.

We may incur losses for an indeterminate period and may never sustain profitability.

be unable to achieve and maintain profitability on a quarterly or annual basis.

An extended period of losses and negative cash

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

As of June 30,

2020, we had cash and cash equivalents of $9,311,556, compared to $5,353,090 as of June 30, 2019, an increase of $3,958,466.

This increase

was primarily due to cash provided by operating activities.

This increase was primarily due to cash provided by operating and investing activities.

Operating Activities

Net cash provided by

operating activities was $2,418,465 for the year ended June 30, 2020 and resulted primarily from an increase in accounts payable

and accrued expenses of $1,486,950 and an increase in deferred revenue of $1,214,301, partially offset by an increase in prepaid

royalties of $720,367.

Net cash provided by

operating activities was $576,446 for the year ended June 30, 2019 and resulted primarily from an increase in deferred revenue

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expenses of $175,949, partially offset by an increase in accounts receivable of $241,918 and a decrease in lease liability of $119,786.

Net cash used in operating

activities was $605,314 for the year ended June 30, 2018 and resulted primarily from net loss and reconciling items of $882,509,

and a decrease in accounts payable and accrued expenses of $1,756,110, partially offset by an increase in accounts receivable

of $1,214,048, an increase in prepaid royalties of $472,946, and an increase in deferred revenue of $330,271.

Investing Activities

No cash was used in

or provided by investing activities for the year ended June 30, 2020.

Net cash used in investing

activities was $15,828 for the year ended June 30, 2019 and resulted from the purchase of property and equipment.

Net cash used in investing

activities was $86,736 for the year ended June 30, 2018 and resulted from the purchase of intangible assets and property and equipment.

Net cash used in financing

activities was $100,023 for the year ended June 30, 2019 and resulted from the repurchase of common stock partially offset by proceeds

from the exercise of stock options.

Financing Activities

Net cash provided by

financing activities was $1,553,399 for the year ended June 30, 2020 and resulted from the proceeds from the exercise of warrants

of $1,875,000, partially offset by the repurchase of common stock of $321,601.

Net cash used in financing

activities was $152,739 for the year ended June 30, 2018 and resulted from the repurchase of common stock.

activities was $100,023 for the year ended June 30, 2019 and resulted from the repurchase of common stock partially offset

by proceeds from the exercise of stock options.

We entered into a Loan

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line of credit for the lesser of $2,500,000, or 80% of eligible accounts receivable.

The line of credit matures on December 31,

The line of credit matures on February 14,

2022, and is subject to certain financial and performance covenants with which we were in compliance as of June 30, 2020.

covenants include maintaining an adjusted quick ratio of unrestricted cash and net accounts receivable, divided by current liabilities

plus debt less deferred revenue of at least 1.15 to 1.0, and maintaining tangible net worth of $1,500,000, plus 50% of net income

for the fiscal quarter ended from and after December 31, 2017, plus 50% of the dollar value of equity issuances after October 1,

2017 and the principal amount of subordinated debt.

The line of credit bears interest at the prime rate plus 2.25% for periods

in which we maintain an adjusted quick ratio of 1.3 to 1.0 (the “Streamline Period”), and at the prime rate plus 5.25%

when a Streamline Period is not in effect.

Financial covenants include maintaining an adjusted quick ratio of unrestricted cash and net accounts receivable, divided by current

liabilities plus debt less deferred revenue of at least 1.15 to 1.0, and maintaining tangible net worth of $1,500,000, plus 50%

of net income for the fiscal quarter ended from and after December 31, 2017, plus 50% of the dollar value of equity issuances

after October 1, 2017 and the principal amount of subordinated debt.

The line of credit bears interest at an annual rate equal

to the greater of 1% above the prime rate and 5.5%.

The interest rate on the line of credit was 5.5% as of June 30, 2020.

The line of credit

was secured by our consolidated assets.

The line of credit was secured by our consolidated assets.

There were no outstanding

borrowings under the line as of June 30, 2020 and June 30, 2019, respectively.

As of June 30, 2019, there was approximately

$2,215,000 of available credit.

As of June 30, 2020, there

was approximately $2,089,000 of available credit.

Non-GAAP Measure –

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or non-recurring items.

Set forth below

is a reconciliation of Adjusted EBITDA to net income (loss) for the year ended June 30, 2019 and 2018:

Set forth below is

a reconciliation of Adjusted EBITDA to net income (loss) for the year ended June 30, 2020 and 2019:

Years Ended June 30,

$ (1,678,741 )

Add (deduct):

Interest expense

Other (income) expense

Foreign currency transaction loss (gain)

Foreign currency transaction loss

Provision for income taxes

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Adjusted EBITDA

$ (1,015,523 )

present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods

on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

we use Adjusted EBITDA in developing our internal budgets, forecasts and strategic plan;

in analyzing the effectiveness of our

business strategies in evaluating potential acquisitions;

and in making compensation decisions and in communications with our board

of directors concerning our financial performance.

Adjusted EBITDA has limitations as an analytical tool, which includes, among

others, the following:

We present Adjusted

EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent

basis by excluding items that we do not believe are indicative of our core operating performance.

In addition, we use Adjusted

EBITDA in developing our internal budgets, forecasts and strategic plan;

in analyzing the effectiveness of our business strategies

in evaluating potential acquisitions;

and in making compensation decisions and in communications with our board of directors concerning

our financial performance.

Adjusted EBITDA has limitations as an analytical tool, which includes, among others, the following:

Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

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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 5. Market for Registrant’s Common Equity