What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-09-23 compared with 2020-09-24 · 25 added, 484 removed, 9 unchanged (98% of the section changed)

Market for Registrant’s Common Equity, Related

Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Approximate Number of Holders of Common

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:

First Quarter (July 1 –

September 30)

Second Quarter (October 1 –

Third Quarter (January 1 –

Fourth Quarter (April 1 –

Year Ended June 30, 2019:

First Quarter (July 1 –

September 30)

Second Quarter (October 1 –

Third Quarter (January 1 –

Fourth Quarter (April 1 –

As of September 18,

2020, we had a total of 26,207,040 shares of our common stock outstanding and the closing sales price was $2.29 per share on the

According to the records of our transfer agent, we had 33 record holders of our common stock as of September 18, 2020.

Because brokers and other institutions hold shares on behalf of stockholders, we are unable to estimate the total number of stockholders

represented by these record holders.

We have never declared

or paid dividends on our common stock.

In addition, our Loan and Security Agreement with Silicon Valley Bank prohibits us from

paying cash dividends.

We currently intend to retain all available funds and any future earnings for use in the operation of our

business and do not anticipate paying any dividends on our common stock in the foreseeable future, if at all.

Any future determination

to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating

results, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Approximate Number of Holders of Common Stock

Our common stock is quoted on The NASDAQ Stock Market LLC’s Nasdaq Capital Market (the “NASDAQ”) under the symbol "RSSS."

As of September 17, 2021, according to the records of our transfer agent, we had 32 record holders of our common stock.

Because brokers and other institutions hold shares on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

We have never declared or paid dividends on our common stock.

In addition, our Loan and Security Agreement with Silicon Valley Bank prohibits us from paying cash dividends.

We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future, if at all.

Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

Recent Sales of Unregistered Securities

Use of Proceeds

Common Stock Repurchases

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.

The actual number of shares repurchased will be determined by applicable employees in their discretion,

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

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.

The actual number of shares repurchased will be determined by applicable employees in their discretion,

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

During the years ended

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

are retired and deducted from common stock for par value and from additional paid in capital for the excess over par value.

costs incurred to acquire the shares are included in the total cost of the shares.

The following table

summarizes repurchases of our common stock on a monthly basis:

Effective as of February 9, 2021, the Compensation Committee of our Board of Directors authorized the repurchase, during calendar year 2021 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.

The actual number of shares repurchased will be determined by applicable employees in their discretion, and will depend on their evaluation of market conditions and other factors.

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.

The actual number of shares repurchased will be determined by applicable employees in their discretion, and will depend on their evaluation of market conditions and other factors.

During the years ended June 30, 2021 and 2020, we repurchased approximately 78,467 and 116,200 shares of our common stock under the repurchase plan at an average price of approximately $2.27 and $2.77 per share, respectively, for an aggregate amount of $178,012 and $321,601, respectively.

As of June 30, 2021, $349,263 remains under the current authorization to repurchase our outstanding common stock from our employees.

Shares repurchased are retired and deducted from common stock for par value and from additional paid in capital for the excess over par value.

Direct costs incurred to acquire the shares are included in the total cost of the shares.

The following table summarizes repurchases of our common stock on a monthly basis:

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs

Approximate Dollar Value

Purchased as Part of

of Shares that May Yet Be

Publicly Announced

Purchased Under the

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.

Plans or Programs

1 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

Information relating

to compensation plans under which our equity securities are authorized for issuance is set forth in Item 12 of this report under

“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Information relating to compensation plans under which our equity securities are authorized for issuance is set forth in Item 12 of this report under “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Selected Financial Data

Not required.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Cautionary Notice Regarding Forward-Looking

The following discussion

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.

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”

and elsewhere in this report.

We use words such

as “anticipate,”

“estimate,”

“plan,”

“project,”

“continuing,”

“ongoing,”

“expect,”

“believe,”

“intend,”

“may,”

“will,”

“should,”

“could,”

and similar expressions to identify forward-looking statements.

All forward-looking statements included in

this report are based on information available to us on the date hereof and, except as required by law, we assume no obligation

to update any such forward-looking statements.

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, 2020:

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

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”).

Platforms and Transactions are packaged as a single solution that enable life science and other research

intensive organizations to speed up research and development activities with faster, single sourced access and management of content

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

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.

An alternative to manual data

filtering, identification and extraction, gadgets are designed to gather, augment, and extract data across a variety of formats,

including bibliographic citations, tables of contents, RSS feeds, PDF files, XML feeds, and web content.

We are rapidly developing

new gadgets in order to build an ecosystem of gadgets.

Together, these gadgets will provide researchers with an “all in one”

toolkit, delivering efficiencies in core research workflows and knowledge creation processes.

is deployed as a single, multi-tenant system across our entire customer base.

Customers securely access the Platform through online

web interfaces and via web service APIs that enable customers to leverage Platform features and functionality from within in-house

and third-party software systems.

The Platform can also be configured to satisfy a customer’s individual preferences.

leverage our Platform’s efficiencies in scalability, stability and development costs to fuel rapid innovation and competitive

provides our customers with a single source to the universe of published STM content that includes over 70 million existing STM

articles and over one million newly published STM articles each year.

STM content is sold to our customers on a transaction basis.

Researchers and knowledge workers in life science and other research-intensive organizations generally require single copies of

published STM journal articles for use in their research activities.

These individuals are our primary users.

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

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.

The accounting estimates

and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial

statements because they inherently involve significant judgments and uncertainties.

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.

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 licenses that allow

customers to access and utilize certain premium features of our cloud based SaaS research intelligence platform (“Platforms”)

and the transactional sale of STM content managed, sourced and delivered through the Platform (“Transactions”).

We apply the following

five steps in order to determine the appropriate amount of revenue to be recognized as we fulfill our obligations under each of

our agreements:

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.

Revenue is recognized

ratably over the term of the subscription agreement, which is typically one year, provided all other revenue recognition criteria

have been met.

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

a transactional service fee for the electronic delivery of single articles, and a corresponding copyright fee for the permitted

use of the content.

We recognize revenue from single article delivery services upon delivery to the customer provided all other

revenue recognition criteria have been met.

Stock-Based Compensation

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

We evaluate the collectability

of our trade accounts receivable based on a number of factors.

In circumstances where we become aware of a specific customer’s

inability to meet its financial obligations to us, we estimate and record a specific reserve for bad debts, which reduces the recognized

receivable to the estimated amount we believe will ultimately be collected.

In addition to specific customer identification of

potential bad debts, bad debt charges are recorded based on our historical losses and an overall assessment of past due trade accounts

receivable outstanding.

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

and 2019, respectively.

Foreign Currency

The accompanying consolidated

financial statements are presented in United States dollars, the functional currency of our company.

Capital accounts of foreign

subsidiaries are translated into US dollars from foreign currencies at their historical exchange rates when the capital transactions

Assets and liabilities are translated at the exchange rate as of the balance sheet date.

Income and expenditures are

translated at the average exchange rate of the period.

Although the majority of our revenue and costs are in US dollars, the costs

of Reprints Desk Latin America are in Mexican Pesos.

As a result, currency exchange fluctuations may impact our revenue and

the costs of our operations.

We currently do not engage in any currency hedging activities.

The following table

summarizes the exchange rates used:

Period end Euro :

US Dollar exchange rate

Average period Euro :

US Dollar exchange rate

Period end Mexican Peso :

US Dollar exchange rate

Average period Mexican Peso :

US Dollar exchange rate

Quarterly Information (Unaudited)

The following table

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

Total revenue

Cost of revenue:

Total cost of revenue

Gross profit:

Total gross profit

Operating expenses:

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

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

Results of Operations

Year Ended June 30,

Total revenue

Cost of revenue:

Total cost of revenue

Gross profit:

Total gross profit

Operating expenses:

Sales and marketing

Technology and product development

General and administrative

Depreciation and amortization

Stock-based compensation expense

Foreign currency transaction loss (gain)

Total operating expenses

Loss from operations

Loss from operations before provision for income taxes

Provision for income taxes

Loss from continuing operations

Gain from sale of discontinued operations

Years Ended June 30,

Total revenue

Total revenue increased

$2,264,815, or 7.9%, for the year ended June 30, 2020 compared to the prior year, due to the following:

Increased due to additional deployments to new and existing customers, and expansion from existing customers.

Revenue is recognized ratably over the term of the subscription agreement, which is typically one year, provided all other revenue recognition criteria have been met.

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

Increased primarily due to orders from new customers.

Cost of Revenue

Years Ended June 30,

Cost of Revenue:

Total cost of revenue

Years Ended June 30,

As a percentage of revenue:

* The difference between current

and prior period cost of revenue as a percentage of revenue

Total cost of revenue

as a percentage of revenue decreased 2.0%, from 71.0% for the previous year to 69.0%, for the year ended June 30, 2020.

Impact as percentage

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

Decreased primarily due to proportionally lower copyright and personnel costs.

Years Ended June 30,

Gross Profit:

Total gross profit

Years Ended June 30,

As a percentage of revenue:

* The difference between current

and prior period gross profit as a percentage of revenue

Operating Expenses

Years Ended June 30,

Operating Expenses:

Sales and marketing

Technology and product development

General and administrative

Depreciation and amortization

Stock-based compensation expense

Foreign currency transaction loss

Total operating expenses

Sales and marketing

primarily due to greater personnel costs and advertising media spend.

General and administrative

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

Provision for Income Taxes

During the years ended

June 30, 2020 and 2019, we recorded a provision for income taxes of $7,836 and $27,040, respectively, a decrease of $19,204.

Net Income (Loss)

Year Ended June 30,

Net Income (Loss):

Loss from continuing operations

$ (1,174,695 )

Income from discontinued operations

Total net loss

Loss from continuing

operations decreased $395,008 or 33.6%, for the year ended June 30, 2020 compared to the prior year, primarily due to increased

gross profit, partially offset by increased operating expenses as described above.

Liquidity and Capital Resources

Year Ended June 30,

Consolidated Statements of Cash Flow Data:

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

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 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

of $644,460, a decrease in prepaid expenses and other current assets of $218,033 and an increase in accounts payable and accrued

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

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.

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 $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

and Security Agreement with Silicon Valley Bank (“SVB”) on July 23, 2010, which, as amended, provides for a revolving

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

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.

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.

There were no outstanding

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

As of June 30, 2020, there

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

Non-GAAP Measure –

Adjusted EBITDA

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), 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

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.

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,

Add (deduct):

Other (income) expense

Foreign currency transaction loss

Provision for income taxes

Depreciation and amortization

Stock-based compensation

Gain on sale of discontinued operations

Adjusted EBITDA

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;

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

Adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

Off-Balance Sheet Arrangements

We do not have any

off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

For information about

recently issued accounting standards, refer to Note 2 to our Consolidated Financial Statements appearing elsewhere in this report.

Quantitative and Qualitative

Disclosures About Market Risk

Not required.

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