Research Solutions, Inc. 10-K

Item 8. Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors Research Solutions, Inc. and Subsidiaries Henderson, Nevada Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Research Solutions, Inc. and Subsidiaries (the “Company”) as of June 30, 2023 and 2022, the related consolidated statements of operations and other comprehensive income (loss), changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Revenue recognition – Recognition of Single Article Transactions Revenue As described in Note 2 to the consolidated financial statements, the Company records transaction service fee revenue for the electronic delivery of published scientific, technical, and medical content sold as single individual articles, and records a corresponding copyright fee expense for the permitted use of the content. The Company is typically the principal in sales of these single article transactions. Sales are recognized on a gross basis with the selling price to the customer 32 Table of Contents recorded as sales and the copyright fee recognized as cost of sales. The Company recognizes revenue from these sales upon delivery to the customer provided all other revenue recognition criteria have been met. We identified the Company’s recording of the revenue for single articles as a critical audit matter because there was significant judgment applied by management in its determination of gross or net revenue recognition, including assessing the indicators that the Company controls the promised service before it was transferred to the customer, such as assessing whether the Company was primarily responsible for fulfilling the promised service and whether the Company had full discretion in establishing the prices for the promised service. In turn, this led to a high degree of auditor judgment, subjectivity and effort in performing audit procedures and evaluating the results of those procedures. ​ The primary procedures we performed to address this critical audit matter included: • We obtained and evaluated documentation prepared by management which outlines the Company’s process to determine gross versus net including evaluating the reasonableness of management’s judgments on whether the Company is acting as a principal or agent, after considering whether the Company is the primary obligation provider, and the discretion in establishing the prices by reviewing agreements with publishers and understanding the business substance • We evaluated whether the Company’s conclusion is consistent with relevant accounting standards • We selected a sample of revenue transactions and performed the following for each selection: o Obtained evidence of a contract with the customer; o Compared the amounts recognized and time of revenue recognition to underlying source documents such as invoices, form of payments, and executed contracts and related modifications, if any; o Evaluated the Company’s application of their accounting policies to determine the timing and amount recognized; and o Tested the presentation of revenue as gross or net by comparing the Company’s gross or net presentation to the attributes of the underlying support and the Company’s accounting policy. We have served as the Company’s auditor since 2006. ​ /s/ Weinberg and Company, P.A Los Angeles, California September 15, 2023 ​ 33 Table of Contents Research Solutions, Inc. and Subsidiaries Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, ​ ​ 2023 ​ 2022 Assets ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 13,545,333 ​ $ 10,603,175 Accounts receivable, net of allowance of $ 85,015 and $ 94,144 , respectively ​ 6,153,063 ​ 5,251,545 Prepaid expenses and other current assets ​ 400,340 ​ 276,026 Prepaid royalties ​ 1,202,678 ​ 846,652 Total current assets ​ 21,301,414 ​ 16,977,398 ​ ​ ​ Other assets: ​ ​ Property and equipment, net of accumulated depreciation of $ 881,908 and $ 840,996 , respectively ​ 70,193 ​ 47,985 Intangible assets, net of accumulated amortization of $ 747,355 and $ 723,036 , respectively ​ ​ 462,068 ​ ​ — Deposits and other assets ​ 1,052 ​ 893 Total assets ​ $ 21,834,727 ​ $ 17,026,276 ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ Current liabilities: ​ ​ ​ ​ Accounts payable and accrued expenses ​ $ 8,079,516 ​ $ 6,604,032 Deferred revenue ​ 6,424,724 ​ 5,538,526 Total current liabilities ​ 14,504,240 ​ 12,142,558 ​ ​ ​ Commitments and contingencies ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ Preferred stock; $ 0.001 par value; 20,000,000 shares authorized; no shares issued and outstanding ​ — ​ — Common stock; $ 0.001 par value; 100,000,000 shares authorized; 29,487,508 and 27,075,648 shares issued and outstanding , respectively ​ 29,487 ​ 27,076 Additional paid-in capital ​ 29,941,873 ​ 28,072,855 Accumulated deficit ​ ( 22,522,649 ) ​ ( 23,094,272 ) Accumulated other comprehensive loss ​ ( 118,224 ) ​ ( 121,941 ) Total stockholders’ equity ​ 7,330,487 ​ 4,883,718 Total liabilities and stockholders’ equity ​ $ 21,834,727 ​ $ 17,026,276 ​ See notes to consolidated financial statements ​ 34 Table of Contents Research Solutions, Inc. and Subsidiaries Consolidated Statements of Operations and Other Comprehensive Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ June 30, ​ ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ Platforms ​ $ 8,683,246 ​ $ 6,787,772 Transactions ​ 29,020,206 ​ 26,146,380 Total revenue ​ 37,703,452 ​ 32,934,152 ​ ​ ​ Cost of revenue: ​ ​ Platforms ​ 1,027,286 ​ 936,589 Transactions ​ 21,975,275 ​ 19,977,889 Total cost of revenue ​ 23,002,561 ​ 20,914,478 Gross profit ​ 14,700,891 ​ 12,019,674 ​ ​ ​ Operating expenses: ​ ​ Selling, general and administrative ​ 14,409,634 ​ 13,633,939 Depreciation and amortization ​ 52,649 ​ 17,651 Total operating expenses ​ 14,462,283 ​ 13,651,590 ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations ​ 238,608 ​ ( 1,631,916 ) ​ ​ ​ Other income ​ 338,617 ​ 7,154 ​ ​ ​ Income (loss) from operations before provision for income taxes ​ 577,225 ​ ( 1,624,762 ) Provision for income taxes ​ ( 5,602 ) ​ ( 7,622 ) ​ ​ ​ Net income (loss) ​ 571,623 ​ ( 1,632,384 ) ​ ​ ​ Other comprehensive income (loss): ​ ​ ​ ​ Foreign currency translation ​ 3,717 ​ ( 2,364 ) Comprehensive income (loss) ​ $ 575,340 ​ $ ( 1,634,748 ) ​ ​ ​ ​ ​ ​ ​ Basic income (loss) per common share: ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ 0.02 ​ $ ( 0.06 ) Weighted average common shares outstanding ​ ​ 26,860,761 ​ ​ 26,422,295 ​ ​ ​ Diluted income (loss) per common share: ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ 0.02 ​ $ ( 0.06 ) Weighted average common shares outstanding ​ ​ 29,139,759 ​ ​ 26,422,295 ​ See notes to consolidated financial statements ​ 35 Table of Contents Research Solutions, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended June 30, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Comprehensive ​ Stockholders’ ​ Shares Amount Capital Deficit Loss Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, July 1, 2021 26,498,215 ​ 26,498 ​ 26,982,052 ​ ( 21,461,888 ) ​ ( 119,577 ) $ 5,427,085 ​ ​ ​ ​ ​ ​ Fair value of vested stock options — ​ — ​ 470,615 ​ — ​ — ​ 470,615 ​ ​ ​ ​ ​ ​ Fair value of vested restricted common stock 356,582 ​ 356 ​ 557,140 ​ — ​ — ​ 557,496 ​ ​ ​ ​ ​ ​ Repurchase of common stock ​ ( 40,221 ) ​ ( 40 ) ​ ( 93,878 ) ​ — ​ — ​ ​ ( 93,918 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock issued upon exercise of stock options ​ 211,072 ​ 212 ​ 97,476 ​ — ​ — ​ ​ 97,688 ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock issued upon exercise of warrants ​ 50,000 ​ ​ 50 ​ ​ 59,450 ​ ​ — ​ ​ — ​ ​ 59,500 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ ( 1,632,384 ) ​ — ​ ( 1,632,384 ) ​ ​ ​ ​ ​ ​ ​ Foreign currency translation — ​ — ​ — ​ — ​ ( 2,364 ) ​ ( 2,364 ) ​ ​ ​ ​ ​ ​ Balance, June 30, 2022 27,075,648 ​ 27,076 ​ 28,072,855 ​ ( 23,094,272 ) ​ ( 121,941 ) ​ 4,883,718 ​ ​ ​ ​ ​ ​ Fair value of vested stock options — ​ — ​ 375,189 ​ — ​ — ​ 375,189 ​ ​ ​ ​ ​ ​ Fair value of vested restricted common stock 2,354,834 ​ 2,355 ​ 1,416,363 ​ — ​ — ​ 1,418,718 ​ ​ ​ ​ ​ ​ Forfeited restricted common stock ​ ( 65,165 ) ​ ​ ( 65 ) ​ ​ 65 ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of vested unrestricted common stock ​ 36,509 ​ ​ 36 ​ ​ 68,236 ​ ​ — ​ ​ — ​ ​ 68,272 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repurchase of common stock ( 51,841 ) ​ ( 52 ) ​ ( 104,198 ) ​ — ​ — ​ ( 104,250 ) ​ ​ ​ ​ ​ ​ Common stock issued upon exercise of stock options 137,523 ​ 137 ​ 57,363 ​ — ​ — ​ 57,500 ​ ​ ​ ​ ​ ​ Modification cost of stock options — ​ — ​ 56,000 ​ — ​ — ​ 56,000 ​ ​ ​ ​ ​ ​ ​ Net income — ​ — ​ — ​ 571,623 ​ — ​ 571,623 ​ ​ ​ ​ ​ ​ ​ Foreign currency translation — ​ — ​ — ​ — ​ 3,717 ​ 3,717 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2023 29,487,508 ​ $ 29,487 ​ $ 29,941,873 ​ $ ( 22,522,649 ) ​ $ ( 118,224 ) ​ $ 7,330,487 ​ See notes to consolidated financial statements 36 Table of Contents Research Solutions, Inc. and Subsidiaries Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ June 30, ​ ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ Cash flow from operating activities: ​ ​ ​ Net income (loss) ​ $ 571,623 ​ $ ( 1,632,384 ) Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: ​ ​ Depreciation and amortization ​ 52,649 ​ 17,651 Fair value of vested stock options ​ 375,189 ​ 470,615 Fair value of vested restricted common stock ​ 1,418,718 ​ 557,496 Fair value of vested unrestricted common stock ​ ​ 68,272 ​ ​ — Modification cost of stock options ​ ​ 56,000 ​ ​ — Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ ( 901,518 ) ​ ( 534,092 ) Prepaid expenses and other current assets ​ ( 124,314 ) ​ ( 5,774 ) Prepaid royalties ​ ( 356,026 ) ​ 58,269 Accounts payable and accrued expenses ​ 1,337,056 ​ ( 83,156 ) Deferred revenue ​ 886,198 ​ 734,175 Net cash provided by (used in) operating activities ​ 3,383,847 ​ ( 417,200 ) ​ ​ ​ Cash flow from investing activities: ​ ​ Purchase of property and equipment ​ ( 47,209 ) ​ ( 44,288 ) Payment for non-refundable deposit for asset acquisition ​ ​ ( 297,450 ) ​ ​ — Net cash used in investing activities ​ ( 344,659 ) ​ ( 44,288 ) ​ ​ ​ Cash flow from financing activities: ​ ​ Proceeds from the exercise of stock options ​ ​ 57,500 ​ ​ 97,688 Proceeds from the exercise of warrants ​ ​ — ​ ​ 59,500 Common stock repurchase ​ ​ ( 104,250 ) ​ ​ ( 93,918 ) Payment of contingent acquisition consideration ​ ​ ( 50,509 ) ​ ​ — Net cash provided by (used in) financing activities ​ ( 97,259 ) ​ 63,270 ​ ​ ​ Effect of exchange rate changes ​ 229 ​ ( 2,944 ) Net increase (decrease) in cash and cash equivalents ​ 2,942,158 ​ ( 401,162 ) Cash and cash equivalents, beginning of period ​ 10,603,175 ​ 11,004,337 Cash and cash equivalents, end of period ​ $ 13,545,333 ​ $ 10,603,175 ​ ​ ​ Supplemental disclosures of cash flow information: ​ ​ Cash paid for income taxes ​ $ 5,602 ​ $ 7,622 ​ ​ ​ Non-cash investing and financing activities: ​ ​ Contingent consideration accrual on asset acquisition ​ $ 138,428 ​ $ — ​ See notes to consolidated financial statements ​ 37 Table of Contents RESEARCH SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended June 30, 2023 and 2022 ​ Note 1. Organization, Nature of Business and Basis of Presentation Organization Research Solutions, Inc. (the “Company,” “Research Solutions,” “we,” “us” or “our”) was incorporated in the State of Nevada on November 2, 2006, and is a publicly traded holding company with three wholly owned subsidiaries as of June 30, 2023: Reprints Desk, Inc., a Delaware corporation, Reprints Desk Latin America S. de R.L. de C.V, an entity organized under the laws of Mexico, and RESSOL LA, S. DE R.L. DE C.V., an entity organized under the laws of Mexico. Nature of Business We provide two service offerings to our customers: a cloud-based software-as-a-service (“SaaS”) research platform (“Platforms”) typically sold via annual auto-renewing license agreements and the sale of published scientific, technical, and medical (“STM”) content sold as individual articles (“Transactions”) either stand alone or via the Platform. When customers utilize the Platform to purchase Transactions it is packaged as a single solution that enables life science and other research-intensive organizations to accelerate their research and development activities with faster, access and management of STM articles used throughout the intellectual property development lifecycle. The Platform typically delivers a ROI to the customer via more effectively managing Transaction costs and saving researchers time during the research process. Platforms Our cloud-based SaaS research 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. Additional functionality has recently been added to our Platform in the form of interactive app-like components. An alternative to manual data filtering, identification and extraction, the apps 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 continue to develop new apps in order to build an ecosystem of apps. Together, these apps will provide researchers with an “all in one” toolkit, delivering efficiencies in core research workflows and knowledge creation processes. Our Platform 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. We leverage our Platform’s efficiencies in scalability, stability and development costs to fuel rapid innovation and competitive advantage. Transactions Our Platform provides our customers with a single source to the universe of published STM content that includes over 80 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. 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; in many cases under one minute. This service is generally known in the industry 38 Table of Contents 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. Principles of Consolidation The accompanying financial statements are consolidated and include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. ​ ​ Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. These estimates and assumptions include estimates for reserves of uncollectible accounts, accruals for potential liabilities, assumptions made in valuing equity instruments issued for services or acquisitions, and realization of deferred tax assets. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with an original maturity of three months or less. In all periods presented, cash equivalents consist primarily of money market funds. Fair Value of Financial Instruments Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , fair value is defined as the price at which an asset could be exchanged or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or parameters are not available, valuation models are applied. A fair value hierarchy prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs, other than the quoted prices in active markets, are observable either directly or indirectly. Level 3 – Unobservable inputs based on the Company’s assumptions. The Company is required to use observable market data if such data is available without undue cost and effort. The Company has no fair value items required to be disclosed as of June 30, 2023 or 2022 under these requirements. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. Allowance for Doubtful Accounts The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of 39 Table of Contents past due trade accounts receivable outstanding. The Company established an allowance for doubtful accounts of $ 85,015 and $ 94,144 as of June 30, 2023 and 2022, respectively. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivable. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $ 250,000 insurance limit. The Company does not anticipate incurring any losses related to these credit risks. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and intends to maintain allowances for anticipated losses, as required. Cash denominated in Euros and British Pounds with an aggregate US Dollar equivalent of $ 1,760,323 and $ 483,232 at June 30, 2023 and 2022, respectively, was held in accounts at financial institutions located in Europe. The Company has no customers that represent 10% of revenue or more for the years ended June 30, 2023 and 2022. The Company has no customers that represent 10% of accounts receivable at June 30, 2023 and 2022. The following table summarizes our content costs from our vendors: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ June 30, ​ ​ 2023 2022 ​ Vendor A ​ 23 % ​ 21 % Vendor B ​ 13 % ​ 13 % ​ Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of 3 to 7 years . Leasehold improvements are amortized over the shorter of the useful lives of the related assets, or the lease term. Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. Gains and losses on disposals are included in the consolidated statements of operations. Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. For the years ended June 30, 2023 and 2022, the Company did not recognize any impairments for its property and equipment. Revenue Recognition The Company accounts for revenue in accordance with 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. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from two sources: annual licenses that allow customers to access and utilize certain premium 40 Table of Contents 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”). The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its 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; and ● recognize revenue as the performance obligation is satisfied. Platforms We charge 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. Transactions We charge 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. Revenue by Geographical Region The following table summarizes revenue by geographical region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ June 30, ​ ​ ​ 2023 ​ 2022 ​ United States ​ $ 21,862,582 58.0 % ​ $ 19,170,684 ​ 58.2 % Europe ​ 12,716,650 33.7 % ​ 11,432,516 34.7 % Rest of World ​ 3,124,220 8.3 % ​ 2,330,952 7.1 % Total ​ $ 37,703,452 100 % ​ $ 32,934,152 100 % ​ 41 Table of Contents Accounts Receivable by Geographical Region The following table summarizes accounts receivable by geographical region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ June 30, ​ ​ 2023 ​ 2022 ​ United States $ 3,727,977 60.6 % ​ $ 3,255,976 ​ 62.0 % Europe ​ 1,763,044 28.7 % ​ 1,665,111 31.7 % Rest of World ​ 662,042 10.8 % ​ 330,458 6.3 % Total ​ $ 6,153,063 100 % ​ $ 5,251,545 100 % ​ Cost of Revenue Platforms Cost of Platform revenue consists primarily of personnel costs of our operations team, and to a lesser extent managed hosting providers and other third-party service and data providers. Transactions Cost of Transaction revenue consists primarily of the respective copyright fee for the permitted use of the content, less a discount in most cases, and to a much lesser extent, personnel costs of our operations team and third-party service providers. Stock-Based Compensation The Company periodically issues stock options, warrants and restricted stock to employees and non-employees for services, in capital raising transactions, and for financing costs. The Company accounts 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. The Company estimates 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 the Company’s Statements of Operations. The Company estimates the fair value of restricted stock awards to employees and directors using the market price of the Company’s 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 the Company’s Statements of Operations. Under ASC 718, Repurchase or Cancellation of equity awards, the amount of cash or other assets transferred (or liabilities incurred) to repurchase an equity award shall be charged to equity, to the extent that the amount paid does not exceed the fair value of the equity instruments repurchased at the repurchase date. Any excess of the repurchase price over the fair value of the instruments repurchased shall be recognized as additional compensation cost. Foreign Currency The accompanying consolidated financial statements are presented in United States dollars, the functional currency of the Company. Capital accounts of foreign subsidiaries are translated into US Dollars from foreign currency at their historical exchange rates when the capital transactions occurred. 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 and ResSoL LA 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. 42 Table of Contents Gains and losses from foreign currency transactions, which result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated, are included in selling, general and administrative expenses and amounted to a gain of $ 121,953 and a loss of $ 143,898 for the years ended June 30, 2023 and 2022, respectively. Cash denominated in Euros and British Pounds with an aggregate US Dollar equivalent of $ 1,760,323 and $ 483,232 at June 30, 2023 and 2022, respectively, was held in accounts at financial institutions located in Europe. The following table summarizes the exchange rates used: ​ ​ ​ ​ ​ ​ ​ Year Ended ​ June 30, ​ 2023 2022 Period end Euro : US Dollar exchange rate ​ 1.09 ​ 1.05 Average period Euro : US Dollar exchange rate ​ 1.05 1.13 ​ ​ ​ ​ ​ Period end GBP : US Dollar exchange rate ​ 1.27 ​ 1.21 Average period GBP : US Dollar exchange rate ​ 1.20 1.34 ​ ​ ​ ​ Period end Mexican Peso : US Dollar exchange rate ​ 0.06 0.05 Average period Mexican Peso : US Dollar exchange rate ​ 0.05 0.05 ​ Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted earnings per share is computed by dividing the net income applicable to common stock holders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is antidilutive. At June 30, 2023 potentially dilutive securities include options to acquire 2,909,574 shares of common stock and unvested restricted common stock of 2,477,794 . At June 30, 2022 potentially dilutive securities include options to acquire 3,182,872 shares of common stock and unvested restricted common stock of 400,092 . The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period. Basic and diluted net loss per common share is the same for the year ended June 30, 2022 because all stock options, warrants, and unvested restricted common stock are anti-dilutive. For the year ended June 30, 2023, the calculation of diluted earnings per share include unvested restricted common stock, stock options and warrants, calculated under the treasury stock method. Income Taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition 43 Table of Contents of allowances for losses. ASU 2016-13 is effective for the Company beginning July 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. ​ Note 3. Property and Equipment Property and equipment consists of the following as of June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, ​ ​ 2023 ​ 2022 Computer equipment ​ $ 628,200 ​ $ 566,518 Software ​ 282,080 ​ 282,080 Furniture and fixtures ​ 41,821 ​ 40,383 Total ​ 952,101 ​ 888,981 Less accumulated depreciation ​ ( 881,908 ) ​ ( 840,996 ) Net, Property and equipment ​ $ 70,193 ​ $ 47,985 ​ Depreciation expense for the years ended June 30, 2023 and 2022 was $ 28,329 and $ 17,651 , respectively. ​ Note 4. Intangible Assets ​ Intangible assets consist of customer lists, which are amortized over an estimated useful life of ten years . The Company does not have any intangible assets deemed to have indefinite lives. Amortization expense for the years ended June 30, 2023 and 2022 was $ 24,320 and $ 0 , respectively. Amortization expense expected to be recognized is approximately $ 49,000 annually in 2024 through 2028 and approximately $ 217,000 thereafter. ​ Intangible assets consist of the following as of June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, ​ ​ 2023 ​ 2022 Customer lists $ 1,192,998 $ 706,611 Intellectual property licenses ​ ​ 16,425 ​ ​ 16,425 Total ​ ​ 1,209,423 ​ ​ 723,036 Less accumulated amortization ​ ​ ( 747,355 ) ​ ​ ( 723,036 ) Net, Intangible assets $ 462,068 $ — ​ ​ ​ Note 5 . Line of Credit The Company 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 28, 2024 , and is subject to certain financial and performance covenants with which we were in compliance as of June 30, 2023. 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. The line of credit bears interest at an annual rate equal to the greater of 1 % above the prime rate and 5.0 %. The interest rate on the line of credit was 9.25 % as of June 30, 2023. The line of credit is secured by the Company’s consolidated assets. Pursuant to the Amended and Restated Loan and Security Agreement dated October 31, 2017 among the Company, Reprints Desk, Inc. and SVB (the “SVB LSA”), the Company was required to direct account debtors to deliver or transmit all proceeds of accounts remitted to the Company and its subsidiaries into a lockbox account as specified by 44 Table of Contents SVB, and to maintain its and its subsidiaries’ primary operating and other deposit accounts with SVB. In compliance with the foregoing covenants the Company and its subsidiaries maintained with SVB substantially all of the dollar value of the Company’s and its subsidiaries’ accounts. At February 28, 2023, the Company held cash at SVB of $ 10,832,000 , of which we estimate $ 9,738,000 was in excess of government insured limits. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and SVB was subsequently transferred into a new entity, Silicon Valley Bridge Bank, N.A. (“SVB Bridge Bank”). On March 12, 2023, the U.S. Treasury Department, the Federal Reserve and the FDIC jointly announced enabling actions that fully protect all SVB depositors’ insured and uninsured deposits, and that such depositors would have access to all of their funds starting March 13, 2023. On March 14, 2023, the Company was able to access its full deposits with SVB Bridge Bank. At June 30, 2023, the Company held cash at SVB Bridge Bank of $ 7,580,000 , of which we estimate $ 6,443,000 was in excess of government insured limits. There were no outstanding borrowings under the line as of June 30, 2023 and June 30, 2022, respectively. As of June 30, 2023, there was approximately $ 2,264,000 of available credit. On March 27, 2023, First Citizens BancShares, Inc entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase all of the assets and liabilities of SVB. The Company has confirmed that the Loan and Security Agreement remains in effect post this transaction and that, in addition to having access to all of its deposits with SVB, it continues to have access to the revolving line of credit. SVB Bridge Bank agreed that the Company can lower its cash balance threshold requirement associated with the SVB LSA, reducing the required balances of its and its subsidiaries’ primary operating and other accounts with SVB, and the Company continues to evaluate the SVB LSA. At June 30, 2023, the Company also held cash at Bank of America, N.A. of $ 1,500,000 and at PNC Bank, N.A. of $ 4,448,000 . The Company continues to re-allocate its cash position across all three banks and explore an overall banking diversification strategy as well as additional access to lending facilities. ​ ​ Note 6. Stockholders’ Equity Stock Options In December 2007, we established the 2007 Equity Compensation Plan (the “2007 Plan”) and in November 2017 we established the 2017 Omnibus Incentive Plan (the “2017 Plan”), collectively (the “Plans”). The Plans were approved by our board of directors and stockholders. The purpose of the Plans is to grant stock and options to purchase our common stock, and other incentive awards, to our employees, directors and key consultants. On November 10, 2016, the maximum number of shares of common stock that may be issued pursuant to awards granted under the 2007 Plan increased from 5,000,000 to 7,000,000 . On November 21, 2017, the Company’s stockholders approved the adoption of the 2017 Plan (previously adopted by our board of directors on September 14, 2017), which authorized a maximum of 1,874,513 shares of common stock that may be issued pursuant to awards granted under the 2017 Plan. On November 17, 2020, the Company’s stockholders approved an increase in the maximum number of shares of common stock that may be issued pursuant to awards granted under the 2017 Omnibus Incentive Plan from 2,374,513 to 3,374,513 . On November 17, 2021, the Company's stockholders approved an increase in the maximum number of shares of common stock that may be issued pursuant to awards granted under the 2017 Omnibus Incentive Plan from 3,374,513 to 6,874,513 . Upon adoption of the 2017 Plan we ceased granting incentive awards under the 2007 Plan and commenced granting incentive awards under the 2017 Plan. The shares of our common stock underlying cancelled and forfeited awards issued under the 2017 Plan may again become available for grant under the 2017 Plan. Cancelled and forfeited awards issued under the 2007 Plan that were cancelled or forfeited prior to November 21, 2017 became available for grant under the 2007 Plan. As of June 30, 2023, there were 1,495,927 shares available for grant under the 2017 Plan, and no shares were available for grant under the 2007 Plan. All incentive stock award grants prior to the adoption of the 2017 Plan on November 21, 2017 were made under the 2007 Plan, and all incentive stock award grants after the adoption of the 2017 Plan on November 21, 2017 were made under the 2017 Plan. The majority of awards issued under the Plan vest immediately or over three years , with a one year cliff vesting period, and have a term of ten years . Stock-based compensation cost is measured at the grant date, based on the fair value 45 Table of Contents of the awards that are ultimately expected to vest, and recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The following table summarizes vested and unvested stock option activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ All Options ​ Vested Options ​ Unvested Options ​ ​ Weighted ​ Weighted ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Exercise ​ ​ ​ Exercise ​ ​ ​ Exercise ​ ​ Shares ​ Price ​ Shares ​ Price ​ Shares ​ Price Outstanding at July 1, 2021 3,258,408 $ 1.68 2,930,474 $ 1.60 327,934 $ 2.46 Granted 307,843 ​ 2.22 — ​ — 307,843 ​ 2.22 Options vesting — ​ — 452,879 ​ 2.26 ( 452,879 ) ​ 2.26 Exercised ( 357,079 ) ​ 1.20 ( 357,079 ) ​ 1.20 — ​ — Forfeited ​ ( 26,300 ) ​ 1.34 ( 26,300 ) ​ 1.34 — ​ — Outstanding at June 30, 2022 3,182,872 $ 1.79 2,999,974 $ 1.75 182,898 $ 2.49 Granted 200,000 ​ 2.15 — ​ — 200,000 ​ 2.15 Options vesting — ​ — 336,834 ​ 2.28 ( 336,834 ) ​ 2.28 Exercised ( 307,298 ) ​ 1.31 ( 307,298 ) ​ 1.31 — ​ — Forfeited ( 166,000 ) ​ 1.81 ( 163,917 ) ​ 1.79 ( 2,083 ) ​ 3.92 Outstanding at June 30, 2023 2,909,574 ​ $ 1.87 2,865,593 ​ $ 1.86 43,981 ​ $ 2.47 ​ The following table presents the assumptions used to estimate the fair values based upon a Black-Scholes option pricing model of the stock options granted during the years ended June 30, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ June 30, ​ ​ ​ 2023 2022 ​ Expected dividend yield ​ — % — % Risk-free interest rate ​ 3.76 % 0.92 - 1.81 % Expected life (in years) ​ 5 5 - 6 ​ Expected volatility ​ 56 % 56 % ​ The weighted average remaining contractual life of all options outstanding as of June 30, 2023 was 5.49 years. The remaining contractual life for options vested and exercisable at June 30, 2023 was 5.45 years. Furthermore, the aggregate intrinsic value of options outstanding and of options vested and exercisable at June 30, 2023 was $ 1,096,942 , in each case based on the fair value of the Company’s common stock on June 30, 2023. During the year ended June 30, 2023, the Company granted 200,000 options to directors with a fair value of $ 222,000 which, due to immediate vesting, were fully expensed at the time of grant. The total fair value of options that vested during the year ended June 30, 2023 was $ 375,189 and was included in selling, general and administrative expenses in the accompanying statement of operations. As of June 30, 2023, the amount of unvested compensation related to the unvested options was $ 56,577 which will be recorded as an expense in future periods as the options vest. During the year ended June 30, 2023, the Company issued 137,523 net shares of common stock upon the exercise of options underlying 307,298 shares of common stock, resulting in net cash proceeds of $ 57,500 . During the year ended June 30, 2022, the Company granted 307,843 options to employees with a fair value of $ 342,566 which amount will be amortized over the vesting period. The total fair value of options that vested during the year ended June 30, 2022 was $ 470,615 and was included in selling, general and administrative expenses in the accompanying statement of operations. As of June 30, 2022, the amount of unvested compensation related to the unvested options was $ 212,642 which will be recorded as an expense in future periods as the options vest. During the year ended June 30, 2022, the Company issued 211,072 net shares of common stock upon the exercise of options underlying 357,079 shares of common stock, resulting in net cash proceeds of $ 97,688 . 46 Table of Contents Additional information regarding stock options outstanding and exercisable as of June 30, 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Option ​ Remaining ​ ​ Exercise ​ Options ​ Contractual ​ Options ​ Price ​ Outstanding ​ Life (in years) ​ Exercisable $ 0.70 225,000 2.43 225,000 ​ 0.77 25,000 1.14 25,000 ​ 0.80 16,000 2.14 16,000 ​ 0.90 15,000 2.10 15,000 ​ 1.00 15,000 1.70 15,000 ​ 1.05 305,000 3.15 305,000 ​ 1.09 40,000 2.90 40,000 ​ 1.10 105,000 2.00 105,000 ​ 1.20 274,000 4.05 274,000 ​ 1.59 25,000 4.87 25,000 ​ 1.80 54,550 0.23 54,550 ​ 1.95 200,000 5.01 200,000 ​ 2.10 ​ 238,767 ​ 8.62 ​ 238,767 ​ 2.13 ​ 216,708 ​ 7.39 ​ 215,316 ​ 2.15 ​ 200,000 ​ 9.45 ​ 200,000 ​ 2.17 ​ 35,955 ​ 7.87 ​ 26,965 ​ 2.19 ​ 5,000 ​ 8.56 ​ 2,500 ​ 2.40 302,833 5.38 302,833 ​ 2.43 ​ 61,250 ​ 7.93 ​ 53,750 ​ 2.45 ​ 163,000 ​ 7.10 ​ 163,000 ​ 2.49 ​ 78,435 ​ 6.92 ​ 76,195 ​ 2.50 ​ 20,000 ​ 5.88 ​ 20,000 ​ 2.64 ​ 30,882 ​ 8.10 ​ 20,588 ​ 2.67 ​ 33,194 ​ 8.22 ​ 22,129 ​ 2.99 ​ 8,000 ​ 6.87 ​ 8,000 ​ 3.13 ​ 208,000 ​ 6.38 ​ 208,000 ​ 3.50 ​ 8,000 ​ 6.62 ​ 8,000 ​ Total ​ 2,909,574 ​ ​ ​ 2,865,593 ​ 47 Table of Contents Warrants The following table summarizes warrant activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ Number of ​ Exercise ​ ​ Warrants ​ Price Outstanding, June 30, 2021 50,000 ​ $ 1.19 Granted — ​ — Exercised ( 50,000 ) ​ 1.19 Repurchased ​ — ​ — Expired/Cancelled — ​ — Outstanding, June 30, 2022 — ​ $ — Granted — ​ — Exercised — ​ — Repurchased — ​ — Expired/Cancelled — ​ — Outstanding, June 30, 2023 — ​ $ — Exercisable, June 30, 2022 — ​ $ — Exercisable, June 30, 2023 — ​ $ — ​ During the year ended June 30, 2022, certain holders of warrants to purchase shares of the Company’s common stock at a per share exercise price of $ 1.19 exercised those warrants to purchase 50,000 shares, generating gross proceeds to the Company of $ 59,500 . Restricted Common Stock Prior to July 1, 2021, the Company issued 2,473,176 shares of restricted common stock to employees valued at $ 2,985,198 , of which $ 2,503,245 had been recognized as an expense. As of June 30, 2021, 245,252 of these shares with a grant date fair value of $ 481,953 had not yet vested. During the year ended June 30, 2022, the Company issued an additional 356,582 shares of restricted stock to employees. Of this amount, 256,582 shares vest over a three year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The remaining 100,000 shares vest over a four year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The aggregate fair value of the stock awards was $ 850,996 based on the market price of our common stock ranging from $ 1.87 to $ 2.64 per share on the date of grant, which will be amortized over the vesting period. During the year ended June 30, 2023, the Company issued an additional 2,354,834 shares of restricted stock to employees with an aggregate fair value of $ 3,478,878 . Of this amount, 229,834 shares vest over a three year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met and 25,000 shares vest over a four year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The aggregate fair value of these stock awards was $ 503,478 based on the market price of our common stock price ranging from $ 1.94 to $ 2.22 per share on the date of grant, which will be amortized over the range of three and four-year vesting periods. The remaining 2,100,000 shares were granted, under the 2017 Plan, as restricted stock awards to key management in accordance with its long-term equity bonus program (the “LTEBP”). The LTEBP replaces the previous restricted stock compensation program for executives. It spans 5 years and is designed to better serve stockholder interests by aligning key executive compensation with stockholder value. Awards under the LTEBP will vest as follows, upon the 30-day volume weighted average price (VWAP) of our common stock reaching the following targets: ​ • 20 % at a 30-day VWAP of $ 3.00 per share; • 20 % at a 30-day VWAP of $ 3.75 per share; • 20 % at a 30-day VWAP of $ 4.50 per share; 48 Table of Contents • 20 % at a 30-day VWAP of $ 5.25 per share; and • 20 % at a 30-day VWAP of $ 6.00 per share. ​ Upon a change of control vesting will accelerate with respect to that portion of the award that would vest if the target 30-day VWAP was achieved at the level above the per share price in such change of control transaction. For example, if we granted an award of 100,000 shares under the LTEBP, 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $ 3.00 per share, and 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $ 3.75 per share. If the per share price in a change of control transaction was $ 5.00 per share, vesting would accelerate for 40,000 shares under the same award (i.e. the number of shares that would vest for our stock price achieving a 30-day VWAP of $ 5.25 per share, pursuant to a tier round up provision in the Plan effective upon a change in control). As a condition to receiving awards under the LTEBP, recipients will be required to hold at least 75 % of all vested shares during the term of their employment. Applicable target 30-day VWAPs must be achieved within 5 years following the grant of awards under the LTEBP, and all unvested awards under the LTEBP will be forfeited upon expiration of such 5-year period. Recipients will also forfeit unvested awards in the event their service with our company terminates for any reason. As the vesting of the 2,100,000 shares of restricted common stock under the LTEBP is subject to certain market conditions, pursuant to current accounting guidelines, the Company determined the fair value to be $ 2,975,400 , computed using the Monte Carlo simulations on a binomial model with the assistance of a valuation specialist with a derived service period ranging from 1.36 to 2.59 years. The total fair value of restricted common stock vesting and expenses related to amortization of the fair value of the LTEBP program during the year ended June 30, 2023 was $ 1,418,717 and is included in selling, general and administrative expenses in the accompanying statements of operations. As of June 30, 2023, the amount of unvested compensation related to issuances of restricted common stock was $ 2,711,661 , which will be recognized as an expense in future periods as the shares vest. When calculating basic net income per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date. When calculating net loss per share, the 2,477,794 shares are considered antidilutive and are excluded from that calculation. The following table summarizes restricted common stock activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Average ​ ​ Number of ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value ​ Fair Value Non-vested, June 30, 2021 245,252 ​ ​ 481,953 ​ $ 2.47 Granted 356,582 ​ 850,996 ​ 2.39 Vested ( 201,742 ) ​ ( 557,496 ) ​ 2.51 Forfeited — ​ — ​ — Non-vested, June 30, 2022 400,092 ​ $ 775,453 ​ $ 2.38 Granted 2,354,834 ​ 3,478,878 ​ 1.48 Vested ( 211,967 ) ​ ( 1,418,717 ) ​ 2.42 Forfeited ( 65,165 ) ​ ( 123,953 ) ​ 2.15 Non-vested, June 30, 2023 2,477,794 ​ $ 2,711,661 ​ $ 1.52 ​ Common Stock Repurchase and Retirement 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 Compensation Committee of our Board of Directors subsequently approved the extension of the repurchases under the same terms through the end of fiscal year 2024. 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. As of June 30, 2022, $ 255,345 remained under the current authorization to repurchase our outstanding common stock from our employees. 49 Table of Contents During the years ended June 30, 2023 and 2022, we repurchased 51,841 and 40,221 shares of our common stock under the repurchase plan at an average price of approximately $ 2.01 and $ 2.34 per share, respectively, for an aggregate amount of $ 104,250 and $ 93,918 , respectively. As of June 30, 2023, $ 151,095 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 Approximate Dollar Value ​ ​ Total Number ​ Average ​ Purchased as Part of ​ of Shares that May Yet Be ​ ​ of Shares ​ Price Paid ​ Publicly Announced ​ Purchased Under the Period ​ Purchased 1 ​ per Share ​ Plans or Programs ​ Plans or Programs September 2021 21,365 ​ $ 2.55 — $ 294,782 December 2021 5,951 ​ $ 2.24 — ​ 281,451 March 2022 6,086 ​ $ 2.34 — ​ 267,210 June 2022 6,819 ​ $ 1.74 — ​ 255,345 Year ended June 30, 2022 40,221 ​ $ 2.34 — $ 255,345 ​ ​ ​ ​ ​ September 2022 9,659 ​ $ 1.87 — $ 237,283 December 2022 16,141 ​ $ 1.90 — ​ 206,616 March 2023 12,785 ​ $ 2.02 — ​ ​ 180,789 June 2023 13,256 ​ $ 2.24 — ​ ​ 151,095 Year ended June 30, 2023 51,841 ​ $ 2.01 — ​ $ 151,095 1 Consists of shares of common stock purchased from employees to satisfy tax obligations in connection with the vesting of stock incentive awards . ​ Note 7. Contingencies and Commitments Legal Proceedings The Company is involved in legal proceedings in the ordinary course of its business. Although management of the Company cannot predict the ultimate outcome of these legal proceedings with certainty, it believes that the ultimate resolution of the Company’s legal proceedings, including any amounts it may be required to pay, will not have a material effect on the Company’s consolidated financial statements. ​ Note 8. Income Taxes The provision for income taxes consists of the following for the years ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ June 30, ​ 2023 2022 Current ​ ​ Federal ​ $ — ​ $ — State ​ 3,806 ​ 3,820 Foreign (Mexico) ​ 1,796 ​ 3,802 Deferred ​ ​ ​ ​ Federal ​ — ​ — Foreign ​ — ​ — State ​ — ​ — Provision for income tax expense ​ $ 5,602 ​ $ 7,622 ​ 50 Table of Contents During the year ended June 30, 2023, the Company recorded a provision for income tax expense of $ 5,602 , which consisted of $ 3,806 in state income tax payments and $ 1,796 in foreign (Mexico) income tax payments. During the year ended June 30, 2022, the Company recorded a provision for income tax expense of $ 7,622 which consisted of $ 3,820 in state income tax payments and $ 3,802 in foreign (Mexico) income tax payments. ​ The reconciliation of the effective income tax rate to the federal statutory rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ June 30, ​ ​ 2023 2022 Federal income tax rate 21.0 % 21.0 % State tax, net of federal benefit 5.0 % 5.0 % Permanent differences ( 3.4 ) % 1.2 % Change in valuation allowance ( 21.8 ) % ( 27.7 ) % Effective income tax rate 0.8 % ( 0.5 ) % ​ Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at June 30, 2023 and 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, June 30, ​ ​ 2023 ​ 2022 Deferred tax assets: ​ ​ Federal net operating loss carryforward ​ $ 2,074,080 ​ $ 2,440,870 State net operating loss carryforward ​ 171,716 ​ 326,117 Intangibles amortization ​ 148,404 ​ 156,196 Stock based compensation ​ 2,250,149 ​ 1,993,124 Other ​ 211,219 ​ 207,901 Total deferred tax assets ​ 4,855,568 ​ 5,124,208 Deferred tax liability: ​ ​ ​ ​ Fixed asset depreciation ​ ( 73,224 ) ​ ( 51,094 ) Net deferred tax assets ​ 4,782,344 ​ 5,073,114 Less valuation allowance ​ ( 4,782,344 ) ​ ( 5,073,114 ) ​ ​ $ — ​ $ — ​ The Company has provided a valuation allowance on the deferred tax assets at June 30, 2023 and 2022 to reduce such asset to zero , since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. The net change in the valuation allowance for the year ended June 30, 2023 was a decrease of $ 290,770 . At June 30, 2023 and 2022, the Company had federal net operating loss (“NOL”) carryforwards of approximately $ 15,650,000 and $ 15,040,000 , respectively, and state NOL carryforwards of approximately $ 6,560,000 and $ 6,420,000 , respectively. Federal NOLs generated prior to and after 2018 can be carried forward indefinitely with some limitations. State NOLs, if unused, completely expire in 2039 . Effective January 1, 2007, the Company adopted FASB guidelines that address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of June 30, 2023 and 2022, the Company did not have a liability for unrecognized tax benefits, and no adjustment was required at adoption. 51 Table of Contents The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2023 and 2022, the Company has no accrued interest or penalties related to uncertain tax positions. Company is subject to taxation in the United States and various states and Mexico. The Company is subject to United States federal or state income tax examinations by tax authorities for fiscal years after 2017. ​ Note 9. Acquisition ​ On September 28, 2022, Reprints Desk entered into an asset purchase agreement with FIZ Karlsruhe – Leibniz-Institut für Informationsinfrastruktur GmbH (“FIZ”). FIZ delivers STM content pursuant to various contracts with its customers through its AutoDoc platform. FIZ agreed to assign and transfer to Reprints Desk certain of these contracts effective January 1, 2023 (the “Sold Contracts”). On September 30, 2022, Reprints Desk made a non-refundable payment of $ 297,450 (€ 300,000 ) (the “Base Amount”) as initial consideration for the asset purchase. As of June 30, 2023, Reprints Desk has recorded $ 95,689 in contingent consideration for customers that have their Sold Contracts assumed by Reprints Desk in comparison to the trailing twelve months of revenue of all Sold Contracts (the “Base Amount Plus”). On June 30, 2023, $ 44,553 in contingent consideration was recorded for customers that placed an order and have consented to have their contract assumed by Reprints Desk (the “Bonus Amount”). As of the June 30, 2023, $ 50,509 of Bonus Amount payments were made for the 2023 fiscal year. The Bonus Amount is based upon the collectable service fee that FIZ would have received from these customers. Contingent consideration for the Bonus Amount will continue to be paid in arrears through the quarter ending December 31, 2025. ​ The current contingent consideration for the Base Amount Plus and the Bonus Amount are recorded as a short-term liability on the balance sheet. At June 30, 2023, the Base Amount, the Base Amount Plus and the Bonus Amount were recorded as intangible assets on the balance sheet with an estimated average useful life of 10 years . ​ Note 10. Subsequent Events Acquisition ​ On July 28, 2023, the Company acquired 100 % of the outstanding stock of Resolute Innovation, Inc. (“Resolute Innovation”), a Delaware corporation, an advanced search platform that equips organizations with search, discovery and knowledge management tools that are powered by artificial intelligence (“AI”) and neuro-linguistic programming (“NLP”) technologies. The initial purchase consideration, net of cash acquired, was approximately $ 2.9 million. In addition, the acquisition agreement includes an earnout that will be based upon the product of three and one half multiplied by ending annual recurring revenue as of January 31, 2025 less the agreed upon Enterprise Value of $ 3.4 million. The Resolute Innovation acquisition will be accounted for under the purchase method, and accordingly, the results of operations will be included in the Company's financial statements from the date of acquisition. The acquisition is not expected to have a material impact on the Company's consolidated financial statements and notes thereto. ​ Stock Options ​ On September 1, 2023, the Company issued 3,578 shares of common stock upon the exercise of stock options underlying 17,000 shares of common stock on a cashless basis. ​ Restricted Common Stock ​ On August 25, 2023, the Company issued 5,000 shares of restricted stock to an employee. These shares vest over a three year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The aggregate value of the stock award was $ 11,200 based on the market price of our common stock of $ 2.24 per share on the date of grant, which will be amortized over the three-year vesting period. ​ On August 25, 2023, the Company granted, under the 2017 Plan, restricted stock awards in the amount 100,000 shares to key employees in accordance with its long-term equity bonus program (the “LTEBP”). The LTEBP spans 5 years 52 Table of Contents and is designed to better serve stockholder interests by aligning key executive compensation with stockholder value. Awards under the LTEBP will vest as follows, upon the 30-day volume weighted average price (VWAP) of our common stock reaching the following targets: ​ • 20 % at a 30-day VWAP of $ 3.00 per share; • 20 % at a 30-day VWAP of $ 3.75 per share; • 20 % at a 30-day VWAP of $ 4.50 per share; • 20 % at a 30-day VWAP of $ 5.25 per share; and • 20 % at a 30-day VWAP of $ 6.00 per share. ​ Upon a change of control vesting will accelerate with respect to that portion of the award that would vest if the target 30-day VWAP was achieved at the level above the per share price in such change of control transaction. For example, if we granted an award of 100,000 shares under the LTEBP, 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $ 3.00 per share, and 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $ 3.75 per share. If the per share price in a change of control transaction was $ 5.00 per share, vesting would accelerate for 40,000 shares under the same award (i.e. the number of shares that would vest for our stock price achieving a 30-day VWAP of $ 5.25 per share). As a condition to receiving awards under the LTEBP, recipients will be required to hold at least 75 % of all vested shares during the term of their employment. Applicable target 30-day VWAPs must be achieved within 5 years following the grant of awards under the LTEBP, and all unvested awards under the LTEBP will be forfeited upon expiration of such 5-year period. Recipients will also forfeit unvested awards in the event their service with our company terminates for any reason. ​ ​ ​ ​ ​ 53 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure There were no changes in or disagreements with our accountants on accounting and financial disclosure during the last two fiscal years. ​