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Research Solutions, Inc.

Research Solutions, Inc.RSSSEarnings & Financial Report

Nasdaq · Industrials · Services-Business Services, NEC

Jacobs Solutions Inc. is an American international technical professional services firm based in Dallas. The company provides engineering, technical, professional, and construction services as well as scientific and specialty consulting for a broad range of clients globally, including companies, organizations, and government agencies. Jacobs has consistently ranked No. 1 on both Engineering News-Record (ENR)'s 2018, 2019, 2020, 2021, 2022, and 2023 Top 500 Design Firms and Trenchless Technolo...

What changed in Research Solutions, Inc.'s 10-K — 2022 vs 2023

Top changes in Research Solutions, Inc.'s 2023 10-K

102 paragraphs added · 97 removed · 78 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

15 edited+3 added−4 removed36 unchanged
In pursuit of growth, we invest in vertical integration and channel relationships to increase the value we provide to customers, extend our promotional reach, and decrease customer acquisition costs. We anticipate growth coming from cross-selling into our existing customer base, penetrating new market verticals, and generating market demand and preference from both existing and new customers.
In pursuit of growth, we invest in vertical integration and channel relationships to increase the value we 5 Table of Contents provide to customers, extend our promotional reach, and decrease customer acquisition costs. We anticipate growth coming from cross-selling into our existing customer base, penetrating new market verticals, and generating market demand and preference from both existing and new customers.
Business Company Overview Research Solutions was incorporated in the State of Nevada on November 2, 2006, and is a publicly traded holding company with three wholly owned subsidiaries at June 30, 2022: 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.
Business Company Overview Research Solutions 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.
Promotion We employ a segment-focused marketing approach that focuses on traditional buyers such as corporate libraries as well as new types of non-library buyers across a variety of business functions, including those within research and 5 Table of Contents development.
Promotion We employ a segment-focused marketing approach that focuses on traditional buyers such as corporate libraries as well as new types of non-library buyers across a variety of business functions, including those within research and development.
Our services alleviate the need for our customers to develop internal systems or contact multiple content publishers in order to obtain the content that is critical to their research. Experienced Management Team Our management team has well over 100 years of experience satisfying customers across the information services and STM publishing and technology industries.
Our services alleviate the need for our customers to develop internal systems or contact multiple content publishers in order to obtain the content that is critical to their research. Experienced Management Team Our management team has years of extensive experience satisfying customers across the information services and STM publishing and technology industries.
Customers and Suppliers There were no customers that accounted for greater than 10% of our revenue for the years ended June 30, 2022 and 2021. 7 Table of Contents Approximately 42% and 41% of our content cost for the years ended June 30, 2022 and 2021, respectively, was derived from our three largest suppliers of content.
Customers and Suppliers There were no customers that accounted for greater than 10% of our revenue for the years ended June 30, 2023 and 2022. Approximately 43% and 42% of our content cost for the years ended June 30, 2023 and 2022, respectively, was derived from our three largest suppliers of content.
At the closing of the transaction contemplated by the Share Exchange Agreement, Research Solutions acquired all of the outstanding shares of Reprints Desk from its stockholders and issued 8,000,003 shares of common stock to the former stockholders of Reprints Desk. Following completion of the exchange transaction, Reprints Desk became a wholly-owned subsidiary of Research Solutions.
At the closing of the transaction contemplated by the Share Exchange Agreement, Research Solutions acquired all of the outstanding shares of Reprints Desk from its stockholders and issued 8,000,003 shares of common stock to the former stockholders of Reprints Desk.
As information becomes more readily available, the opportunity for piracy increases. ● STM Single Article Delivery Vendors and Content Aggregators – Our primary competitors for global, full-service single article delivery services are Copyright Clearance Center, regional interlibrary loan networks throughout the world such as those owned and operated by OCLC, and numerous national libraries located outside of the United States. ● Customer In-House Services – While single article delivery services and software development are challenging for our customers to provide in-house, many existing and potential customers manage these capabilities internally. ● Publisher In-House Capabilities – Some large publishers have developed in-house capabilities to service the content re-use market, however, many of them neglect other content repurposing opportunities and may not be able to aggregate content from other publishers nor create value added software-based solutions. 8 Table of Contents Corporate History and Structure Research Solutions was incorporated in the State of Nevada on November 2, 2006, and in November 2006 entered into a Share Exchange Agreement with Reprints Desk.
As information becomes more readily available, the opportunity for piracy increases. ● STM Single Article Delivery Vendors and Content Aggregators – Our primary competitors for global, full-service single article delivery services are Copyright Clearance Center, regional interlibrary loan networks throughout the world such as those owned and operated by OCLC, and numerous national libraries located outside of the United States. ● Customer In-House Services – While single article delivery services and software development are challenging for our customers to provide in-house, many existing and potential customers manage these capabilities internally. ● Publisher In-House Capabilities – Some large publishers have developed in-house capabilities to service the content re-use market, however, many of them neglect other content repurposing opportunities and may not be able to aggregate content from other publishers nor create value added software-based solutions.
On July 24, 2012, we formed Reprints Desk Latin America to provide operational and administrative support services to Reprints Desk. On March 4, 2013, we consummated a merger with DYSC Subsidiary Corporation, our wholly-owned subsidiary, pursuant to which we, in connection with such merger, amended our Articles of Incorporation to change our name to Research Solutions, Inc.
On March 4, 2013, we consummated a merger with DYSC Subsidiary Corporation, our wholly-owned subsidiary, pursuant to which we, in connection with such merger, amended our Articles of Incorporation to change our name to Research Solutions, Inc. (formerly Derycz Scientific, Inc.). On June 9, 2022, we formed ResSol LA to provide operational and administrative support services to Reprints Desk.
These include: Accelrys, Benchling, ChemAxon, Comsol Multiphysics, Genomenom, Main GCl, Workbench, Molsoft, and SnapGene. ● Reference Management Applications – We expect to increasingly compete with tools that exist in the marketplace that are used to aid in organizing references, storing personal content assets, and prepare scholarly papers for submission to congresses and journals. ● Piracy – Perhaps, our most serious competitor.
Our competition includes: ● Reference Management Applications – We expect to increasingly compete with tools that exist in the marketplace that are used to aid in organizing references, storing personal content assets, and prepare scholarly papers for submission to congresses and journals. ● Piracy – Perhaps, our most serious competitor.
The majority of these publishers provide us with electronic access to their content, which allows us to further expedite the delivery of single articles to our customers.
The majority of these publishers provide us with electronic access to their content, which allows us to further expedite the delivery of single articles to our customers. In addition, we rely on a small number of content publishers for the majority of our content costs.
Customer Loyalty The majority of our revenue comes from our loyal base of customers, indicative of our focus on customer satisfaction and quality.
In addition, our team has experience growing and scaling SaaS and subscription business models. Customer Loyalty The majority of our revenue comes from our loyal base of customers, indicative of our focus on customer satisfaction and quality.
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.
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. 6 Table of Contents 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.
Loss of any or all of these suppliers of content would significantly reduce our revenue, which would have a material adverse effect on our results of operations. We can provide no assurance that these suppliers of content will continue to supply us with content in the future.
Loss of any or all of these suppliers of content would significantly reduce our revenue, which would have a material adverse effect on our results of operations.
Sales and Marketing To efficiently acquire customers, we rely on marketing in close cooperation with value-based selling to acquire new small, medium and large geographically-dispersed enterprises.
We can provide no assurance that these suppliers of content will continue to supply us with content in the future. 7 Table of Contents Sales and Marketing To efficiently acquire customers, we rely on marketing in close cooperation with value-based selling to acquire new small, medium and large geographically-dispersed enterprises.
In addition, we rely on a small number of content publishers for the majority of our content costs. 6 Table of Contents Company Services We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”).
Company Services We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”).
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Our management team includes our Executive Chairman Peter Derycz, our founder and an innovator in the space for many decades who has earned many accolades, including being nominated to the Pharma Voice 100 list of most inspiring people in the Pharmaceutical industry.
Added
Corporate History and Structure Research Solutions was incorporated in the State of Nevada on November 2, 2006, and in November 2006 entered into a Share Exchange Agreement with Reprints Desk.
Removed
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.
Added
Following completion of the exchange transaction, Reprints Desk became a wholly-owned subsidiary of Research Solutions. 8 Table of Contents On July 24, 2012, we formed Reprints Desk Latin America to provide operational and administrative support services to Reprints Desk.
Removed
Our competition includes: ● App –Like Toolkit Providers – We consider the rapidly increasing number of companies that are focused on specialized toolkits for researchers as competition.
Added
Human Capital Resources As of September 8, 2023, we had 145 full time employees. ​
Removed
(formerly Derycz Scientific, Inc.). On June 9, 2022, we formed ResSol LA to provide operational and administrative support services to Reprints Desk. Employees As of September 16, 2022, we had 131 full time employees. ​

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+17 added−9 removed97 unchanged
We were in compliance with these covenants as of June 30, 2022, however, our failure to comply with these covenants in the future may result in an event of default, which if not cured or waived, could result in the bank preventing us from accessing availability under our line of credit and requiring us to repay any outstanding borrowings.
We were in compliance with these covenants as of June 30, 2023, however, our failure to comply with these covenants in the future may result in an event of default, which if not cured or waived, could result in the bank preventing us from accessing availability under our line of credit and requiring us to repay any outstanding borrowings.
We currently have a line of credit with Silicon Valley Bank, maturing on February 28, 2024, under which there were no outstanding borrowings as of June 30, 2022. Our loan agreement contains, and any agreements to refinance our debt likely will contain, financial and restrictive covenants.
We currently have a line of credit with Silicon Valley Bank, maturing on February 28, 2024, under which there were no outstanding borrowings as of June 30, 2023. Our loan agreement contains, and any agreements to refinance our debt likely will contain, financial and restrictive covenants.
Therefore, network or system shutdowns caused by events such as computer hacking, sabotage, dissemination of computer viruses, worms and other destructive or disruptive software, denial of service attacks and other malicious activity, as well as loss of service from third parties, power outages, natural disasters and similar events, could affect our ability to store, handle and deliver data and services to our customers.
Therefore, network or system shutdowns caused by events such as computer hacking, sabotage, dissemination of computer viruses, worms and other destructive or disruptive software, denial of service attacks and other malicious activity, as well as loss of service from third parties, power outages, natural disasters and similar events, could affect our ability to store, 11 Table of Contents handle and deliver data and services to our customers.
In the event that we were to 12 Table of Contents lose PCI DSS compliance status (or fail to renew compliance under a future version of the PCI DSS), we could be exposed to increased operating costs, fines and penalties and, in extreme circumstances, may have our credit card processing privileges revoked, which would have a material adverse effect on our business.
In the event that we were to lose PCI DSS compliance status (or fail to renew compliance under a future version of the PCI DSS), we could be exposed to increased operating costs, fines and penalties and, in extreme circumstances, may have our credit card processing privileges revoked, which would have a material adverse effect on our business.
As a consequence of this enhanced risk, more risk-adverse investors may, under 15 Table of Contents the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.
As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.
Our articles of incorporation, bylaws and Nevada law contain provisions which could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are currently authorized to issue up to 20,000,000 shares of “blank check” preferred stock.
Our articles of incorporation, bylaws and Nevada law contain provisions which could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are currently 17 Table of Contents authorized to issue up to 20,000,000 shares of “blank check” preferred stock.
The PCI Data Security Standard (“PCI DSS”) is a specific set of comprehensive security standards required by credit card brands for enhancing payment account data security, including but not limited to requirements for security management, policies, procedures, network architecture, and software design. PCI DSS compliance is required in order to maintain credit card processing services.
The PCI Data Security Standard (“PCI DSS”) is a specific set of comprehensive security standards required by credit card brands for enhancing payment account data security, including but not limited to requirements for security management, policies, procedures, network architecture, and software design. PCI DSS compliance is required in order to 12 Table of Contents maintain credit card processing services.
It is difficult to predict in what form laws and regulations will be adopted or how they will be construed by the relevant courts, or the extent to which nay changes might adversely affect us.
It is difficult to predict in what form laws and regulations will be adopted or how they will be construed by the relevant courts, or the extent to which any changes might adversely affect us.
We may become subject to Nevada’s control share acquisition laws (Nevada Revised Statutes 78.378 -78.3793), which prohibit an acquirer, under certain circumstances, from voting shares of a corporation’s stock after crossing specific 17 Table of Contents threshold ownership percentages, unless the acquirer obtains the approval of the issuing corporation’s stockholders.
We may become subject to Nevada’s control share acquisition laws (Nevada Revised Statutes 78.378 -78.3793), which prohibit an acquirer, under certain circumstances, from voting shares of a corporation’s stock after crossing specific threshold ownership percentages, unless the acquirer obtains the approval of the issuing corporation’s stockholders.
As a public company, we are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 16 Table of Contents 2002, or Section 404. Further, Section 404 requires annual management assessments of the effectiveness of our internal controls over financial reporting.
As a public company, we are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404. Further, Section 404 requires annual management assessments of the effectiveness of our internal controls over financial reporting.
Although third parties may offer a license to their content, the terms of any 10 Table of Contents offered license may not be acceptable and the failure to obtain a license or the costs associated with any license could cause our business, results of operations or financial condition to be materially and adversely affected.
Although third parties may offer a license to their content, the terms of any offered license may not be acceptable and the failure to obtain a license or the costs associated with any license could cause our business, results of operations or financial condition to be materially and adversely affected.
Any of these events could seriously harm our business, operating results and financial condition. Our industry is subject to intense competition and rapid technological change, which may result in products or new solutions that are superior to our products or solutions under development.
Any of these events could seriously harm our business, operating results and financial condition. 10 Table of Contents Our industry is subject to intense competition and rapid technological change, which may result in products or new solutions that are superior to our products or solutions under development.
If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
If we raise additional funds through future issuances of equity or convertible debt 13 Table of Contents securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
Approximately 42% and 41% of our content cost for the years ended June 30, 2022 and 2021, respectively, was derived from our three largest suppliers of content. Loss of any or all of these suppliers of content would significantly reduce the attractiveness of our services and our revenue, which would have a material adverse effect on our results of operations.
Approximately 43% and 42% of our content cost for the years ended June 30, 2023 and 2022, respectively, was derived from our three largest suppliers of content. Loss of any or all of these suppliers of content would significantly reduce the attractiveness of our services and our revenue, which would have a material adverse effect on our results of operations.
Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to 13 Table of Contents pursue business opportunities.
Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities.
Secondly, an investment in us is a speculative or “risky” investment due to our lack of meaningful profits to date and uncertainty of future profits.
Secondly, an investment in us is a speculative or “risky” investment due to our lack of meaningful profits 15 Table of Contents to date and uncertainty of future profits.
As of September 16, 2022, Peter Victor Derycz, our Executive Chairman, had voting power equal to approximately 12% of votes eligible to be cast at a meeting of our stockholders. Paul Kessler, the brother-in-law of Mr.
As of September 8, 2023, Peter Victor Derycz, our Executive Chairman, had voting power equal to approximately 11.2% of votes eligible to be cast at a meeting of our stockholders. Paul Kessler, the brother-in-law of Mr.
We can provide no assurance that these customers will continue to place orders in the future. 9 Table of Contents The loss of our largest suppliers of content would significantly reduce our revenue and adversely affect our results of operations.
The loss of our largest customers would significantly reduce our revenue, which would have a material adverse effect on our results of operations. We can provide no assurance that these customers will continue to place orders in the future. The loss of our largest suppliers of content would significantly reduce our revenue and adversely affect our results of operations.
As of June 30, 2022, we had no shares of preferred stock issued and outstanding. Accordingly, as of June 30, 2022, we could issue up to 65,805,884 additional shares of common stock and 20,000,000 additional shares of “blank check” preferred stock.
As of June 30, 2023, we had no shares of preferred stock issued and outstanding. Accordingly, as of June 30, 2023, we could issue up to 66,106,991 additional shares of common stock and 20,000,000 additional shares of “blank check” preferred stock.
Derycz, exercises investment and voting control over the shares held by Bristol Investment Fund, Ltd., and had, as of September 17, 2022, voting power equal to approximately 9% of votes eligible to be cast at a meeting of our stockholders. As a result of their significant ownership interests, Mr. Derycz and Mr.
Derycz, exercises investment and voting control over the shares held by Bristol Investment Fund, Ltd., and had, as of September 8, 2023, voting power equal to approximately 8.7% of votes eligible to be cast at a meeting of our stockholders. As of September 8, 2023, Mr. Derycz, Bristol Investment Fund, Ltd.
There were no customers that accounted for greater than 10% of our revenue for the years ended June 30, 2022 and 2021. The loss of our largest customers would significantly reduce our revenue, which would have a material adverse effect on our results of operations.
The loss of our largest customers would significantly reduce our revenue and adversely affect our results of operations. There were no customers that accounted for greater than 10% of our revenue for the years ended June 30, 2023 and 2022.
As of June 30, 2022 we had issued and outstanding 27,075,648 shares of common stock and we had 7,118,468 shares of common stock reserved for future grants under our equity compensation plans and for issuances upon the exercise or conversion of currently outstanding options, warrants and convertible securities.
As of June 30, 2023 we had issued and outstanding 29,487,508 shares of common stock and we had 4,405,501 shares of common stock reserved for future grants under our equity compensation plans and for issuances upon the exercise or conversion of currently outstanding options, warrants and convertible securities.
We can provide no assurance that these suppliers of content will continue to supply us with content in the future. Moreover, our arrangements with content providers are non-exclusive. As a result, our content providers can provide the same content to our competitors. We are exposed to credit risk on our accounts receivable and prepayments to suppliers of content.
We can provide no assurance that these suppliers of content will continue to supply us with content in the future. Moreover, our arrangements with content providers are non-exclusive.
An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business. We may be unable to sustain or increase our profitability on a quarterly or annual basis. The loss of our largest customers would significantly reduce our revenue and adversely affect our results of operations.
We may continue to incur losses for an indeterminate period of time and may be unable to sustain profitability. An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business. We may be unable to sustain or increase our profitability on a quarterly or annual basis.
Under the terms of our outstanding options and warrants to purchase our common stock issued to employees and others, the holders are given an opportunity to profit from a rise in the market price of our common stock that, upon the exercise of the options and/or warrants, could result in dilution in the interests of our other stockholders.
Under the terms of our outstanding options and warrants to purchase our common stock issued to employees and others, the holders are given an opportunity to profit from a rise in the market price of our common stock that, upon the exercise of the options and/or warrants, could result in dilution in the interests of our other stockholders. 16 Table of Contents The market price of our common stock and the value of your investment could substantially decline if our warrants or options are exercised and our common stock is issued and resold into the market, or if a perception exists that a substantial number of shares will be issued upon exercise of our warrants and option and then resold into the market.
This risk is heightened during periods when economic conditions worsen. There were no customers that accounted for greater than 10% of our accounts receivable as of June 30, 2022. There was one customer that accounted for 14% of our accounts receivable as of June 30, 2021. In addition, we have made prepayments to suppliers of content.
There were no customers that accounted for greater than 10% of our accounts receivable as of June 30, 2023 and 2022, respectively. In addition, we have made prepayments to suppliers of content.
In addition, if we were to suffer damage to our reputation as a result of any system failure or security compromise, our revenue and profitability could be adversely affected. We are exposed to risks associated with PCI compliance.
In addition, if we were to suffer damage to our reputation as a result of any system failure or security compromise, our revenue and profitability could be adversely affected. Disruptions and other damages to our information technology and breaches in data security or cybersecurity attacks could have a negative financial impact and damage our reputation.
Our inability to find a suitable replacement for any departing executive officer or key employee on a timely basis could adversely affect our ability to operate and grow our business. 11 Table of Contents We rely on our proprietary software systems, and our websites and online networks, and a disruption, failure or security compromise of these systems would disrupt our business, damage our reputation and adversely affect our revenue and profitability.
We rely on our proprietary software systems, and our websites and online networks, and a disruption, failure or security compromise of these systems would disrupt our business, damage our reputation and adversely affect our revenue and profitability.
For our fiscal years ended June 30, 2022 and 2021, we incurred a net loss of $1,632,384 and $285,089, respectively. As of June 30, 2022, we had an accumulated deficit of $23,094,272. We cannot predict if we will be profitable. We may continue to incur losses for an indeterminate period of time and may be unable to sustain profitability.
For our fiscal years ended June 30, 2023 and 2022, we earned a net income of $571,623 and incurred a net loss of $1,632,384, respectively. As of June 30, 2023, we had an accumulated deficit of $22,522,649. We cannot predict if we will be profitable.
Kessler together currently have the ability to exert significant influence over the election of directors, and other matters submitted to a vote of all of our stockholders. They may also have interests that differ from yours and may vote in a manner that is adverse to your interests.
They may also have interests that differ from yours and may vote in a manner that is adverse to your interests.
Any adverse consequence resulting from the materialization of the foregoing risks would adversely affect our financial performance and results of operations. Unfavorable general economic conditions in the United States, Europe, or in other major markets could negatively impact our financial performance.
Any adverse consequence resulting from the materialization of the foregoing risks would adversely affect our financial performance and results of operations. 14 Table of Contents Unfavorable global economic conditions could have a material adverse effect on our business, financial condition, results of operations, prospects and market price of our common stock.
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Competition for senior management personnel is intense, and fit is important to us.
Added
As a result, our content providers can provide the same content to our competitors. 9 Table of Contents We are exposed to credit risk on our accounts receivable and prepayments to suppliers of content. This risk is heightened during periods when economic conditions worsen.
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Unfavorable general economic conditions, such as a recession or economic slowdown in the United States, Europe, Japan, or in one or more of our other major markets, could negatively affect demand for our services and our results of operations.
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Competition for senior management personnel is intense, and fit is important to us. Our inability to find a suitable replacement for any departing executive officer or key employee on a timely basis could adversely affect our ability to operate and grow our business.
Removed
Under difficult economic conditions, businesses may seek to reduce spending on our services, or shift away from our services to in-house alternatives. 14 Table of Contents The COVID-19 pandemic could negatively impact our future operations and results. We are subject to risks and uncertainties as a result of the COVID-19 pandemic.
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Our ability to serve our customers depends in part on the reliability of our technologies and system networks. Unauthorized parties gaining access to digital technology and networks for the purposes of misappropriating sensitive financial or business information, corrupting data, causing operational disruptions and other cyber-related risks could adversely impact our customer relationships, business strategy and our reputation.
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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.
Added
These potential disruptions and cyber-attacks could negatively affect revenues, costs, customer demand, system availability and our reputation. In addition, as we execute our strategy to grow through acquisitions and to pursue newer technologies that improve the efficiency of our operations, we are also expanding our information technologies, resulting in a greater technological presence and corresponding vulnerability to cybersecurity risk.
Removed
Furthermore, 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.
Added
Certain new technologies present new and significant cybersecurity safety risks that must be addressed before implementation. If we fail to identify and address cybersecurity risks associated with acquisitions and new strategic initiatives, we may become increasingly exposed to such risks. We are exposed to risks associated with PCI compliance.
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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.
Added
Financial instability and a general decline in economic conditions in the United States and other countries caused by political instability and conflict, including the ongoing conflict between Russia and Ukraine, and economic or financial challenges caused by current and potential future bank failures or by general health crises such as the COVID-19 pandemic, have led to market disruptions, including significant volatility in commodity prices, credit and capital markets instability, including disruptions in access to bank deposits and lending commitments, supply chain interruptions, rising interest rates and global inflationary pressures.
Removed
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.
Added
These macroeconomic factors could materially and adversely affect our ability to continue to operate as a going concern and could otherwise have a material adverse effect on our business, operations, operating results and financial condition as well as the price of our common stock.
Removed
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.
Added
The recent closures of Silicon Valley Bank, or SVB, Signature Bank and First Republic Bank have resulted in broader financial institution liquidity risk and concerns.
Removed
The market price of our common stock and the value of your investment could substantially decline if our warrants or options are exercised and our common stock is issued and resold into the market, or if a perception exists that a substantial number of shares will be issued upon exercise of our warrants and option and then resold into the market.
Added
Although we were able to access all of the funds we had in deposit with SVB and have diversified banking services previously provided solely by SVB to alternative global banking providers, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages.
Added
The failure of any bank in which we deposit our funds could reduce the amount of cash we have available for our operations or delay our ability to access such funds. Any such failure may increase the possibility of a sustained deterioration of financial market liquidity, or illiquidity at clearing, cash management and/or custodial financial institutions.
Added
In the event we have a commercial relationship with a bank that has failed or is otherwise distressed, we may experience delays or other issues in meeting our financial obligations.
Added
If other banks and financial institutions fail or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our cash and cash equivalents and investments may be threatened, which could have a material adverse effect on our business, operations, operating results and financial condition as well as the price of our common stock.
Added
(“Bristol Fund”), Bristol Capital Advisors, LLC, Paul Kessler, Janice Peterson and Andrew Ritter (collectively, the “Group”) were party to a Joint Filing and Solicitation Agreement pursuant to which the Group agreed, to the extent required by applicable law, to the joint filing of statements on Schedule 13D with respect to the securities of the Company, to solicit proxies for the election of nominees nominated by the Group at the Corporation’s annual meeting of stockholders, not to transact in securities of the Company without the prior written consent of Bristol Fund and Mr.
Added
Derycz, subject to certain exceptions, that any SEC filing, press release, public shareholder communication or Company communication proposed to be made or issued by the Group or any member of the Group in connection with the Group’s activities shall be mutually agreeable to Bristol Fund and Mr. Derycz, and that Mr.
Added
Derycz and Bristol Fund agree to jointly pay all out-of-pocket costs and expenses incurred in connection with the Group’s activities based on Mr. Derycz’s and Bristol Fund’s pro rata share of their aggregate ownership of shares of the Company’s common stock, which shall be advanced by Bristol Fund and repaid by Mr.
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Derycz pursuant to the terms of the Joint Filing and Solicitation Agreement. As a result of their significant ownership interests, Mr. Derycz and Mr.
Added
Kessler together currently have the ability to exert significant influence over the election of directors, and other matters submitted to a vote of all of our stockholders, and have submitted an alternate slate of nominees for consideration at the Company’s 2023 annual meeting of stockholders.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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 2023. 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.
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.
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 16, 2022, according to the records of our transfer agent, we had 33 record holders of our common stock.
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 (“Nasdaq”) under the symbol “RSSS.” ​ As of September 8, 2023, according to the records of our transfer agent, we had 38 record holders of our common stock.
As of June 30, 2022, $255,345 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.
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. ​ 19 Table of Contents 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 April 1-30, 2022 — ​ — — ​ $ 267,210 May 1-31, 2022 — ​ — — ​ $ 267,210 June 1-30, 2022 6,819 ​ $ 1.74 — ​ $ 255,345 Total 6,819 ​ $ 1.74 — ​ — 1 Consists of shares of common stock purchased from employees to satisfy tax obligations in connection with the vesting of stock incentive awards.
Direct costs incurred to acquire the shares are included in the total cost of the shares. ​ 19 Table of Contents 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 April 1-30, 2023 — ​ — — ​ $ 180,789 May 1-31, 2023 — ​ — — ​ $ 180,789 June 1-30, 2023 13,256 ​ $ 2.24 — ​ $ 151,095 Total 13,256 ​ $ 2.24 — ​ — 1 Consists of shares of common stock purchased from employees to satisfy tax obligations in connection with the vesting of stock incentive awards.
During the years ended June 30, 2022 and 2021, we repurchased 40,221 and 78,467 shares of our common stock under the repurchase plan at an average price of approximately $2.34 and $2.27 per share, respectively, for an aggregate amount of $93,918 and $178,012, respectively.
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, 2021, $349,263 remained under the current authorization to repurchase our outstanding common stock from our employees.
As of June 30, 2022, $255,345 remained under the current authorization to repurchase our outstanding common stock from our employees.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Financing Activities Net cash provided by financing activities was $63,270 for the year ended June 30, 2022 and resulted from the proceeds from the exercise of options of $97,688 and the proceeds from the exercise of warrants of $59,500, partially offset by the repurchase of common stock of $93,918.
Net cash provided by financing activities was $63,270 for the year ended June 30, 2022 and resulted from the proceeds from the exercise of options of $97,688 and the proceeds from the exercise of warrants of $59,500, partially offset by the repurchase of common stock of $93,918.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Notice Regarding Forward-Looking Statements The following discussion and analysis of our financial condition and results of operations for the years ended June 30, 2022 and 2021 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Cautionary Notice Regarding Forward-Looking Statements The following discussion and analysis of our financial condition and results of operations for the years ended June 30, 2023 and 2022 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report.
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. 22 Table of Contents Revenue Recognition We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”).
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 We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”).
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; and 30 Table of Contents ● 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.
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; and ● 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.
We account for share-based payments under the guidance as set 23 Table of Contents 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 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.
Financial covenants include maintaining an adjusted quick ratio of unrestricted 29 Table of Contents 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%.
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%.
This decrease was primarily due to cash used by operating activities. Operating Activities Net cash used in operating activities was $417,200 for the year ended June 30, 2022 and resulted primarily from an increase in deferred revenue of $734,175 and a decrease in prepaid royalties of $58,269, partially offset by an increase in accounts receivable of $534,092.
Net cash used in operating activities was $417,200 for the year ended June 30, 2022 and resulted primarily from an increase in deferred revenue of $734,175 and a decrease in prepaid royalties of $58,269, partially offset by an increase in accounts receivable of $534,092.
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 derive our revenues from two sources: annual licenses that allow customers to access and utilize certain premium features of our 22 Table of Contents cloud-based SaaS research intelligence platform (“Platforms”) and the transactional sale of STM content managed, sourced and delivered through the Platform (“Transactions”).
Overview Research Solutions was incorporated in the State of Nevada on November 2, 2006, and is a publicly traded holding company with three wholly owned subsidiaries at June 30, 2022: 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.
Overview Research Solutions 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.
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.
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 30 Table of Contents decisions and in communications with our board of directors concerning our financial performance.
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 $94,144 and $51,495 as of June 30, 2022 and 2021, respectively.
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 $85,015 and $94,144 as of June 30, 2023 and 2022, respectively.
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, 2022.
The line of credit matures on February 28, 2024, and is subject to certain financial and performance covenants with which we 29 Table of Contents were in compliance as of June 30, 2023.
The interest rate on the line of credit was 5.75% as of June 30, 2022. The line of credit was secured by our consolidated assets. There were no outstanding borrowings under the line as of June 30, 2022 and June 30, 2021, respectively. As of June 30, 2022, there was approximately $2,500,000 of available credit.
The interest rate on the line of credit was 9.25% as of June 30, 2023. The line of credit was secured by our consolidated assets. 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.
Net Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2022 2021 $ Change % Change Net Income (Loss): ​ ​ ​ ​ ​ Net loss: ​ $ (1,632,384) ​ $ (285,089) ​ $ (1,347,295) (472.6) % ​ 28 Table of Contents Net loss increased $1,347,295 or 472.6%, for the year ended June 30, 2022 compared to the prior year, primarily due to increased operating expenses, partially offset by increased gross profit as described above.
Net Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 2022 $ Change % Change Net Income (Loss): ​ ​ ​ ​ ​ Net income (loss): ​ $ 571,623 ​ $ (1,632,384) ​ $ 2,204,007 135.0 % ​ 28 Table of Contents Net loss decreased $2,204,007 or 135%, for the year ended June 30, 2023 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, ​ ​ 2022 ​ 2021 Consolidated Statements of Cash Flow Data: ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ $ (417,200) ​ $ 1,868,406 Net cash used in investing activities ​ (44,288) ​ (19,854) Net cash provided by (used in) financing activities ​ 63,270 ​ (159,974) ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes ​ (2,944) ​ 4,203 Net increase (decrease) in cash and cash equivalents ​ (401,162) ​ 1,692,781 Cash and cash equivalents, beginning of period ​ 11,004,337 ​ 9,311,556 Cash and cash equivalents, end of period ​ $ 10,603,175 ​ $ 11,004,337 ​ Liquidity As of June 30, 2022, we had cash and cash equivalents of $10,603,175, compared to $11,004,337 as of June 30, 2021, a decrease of $401,162.
Liquidity and Capital Resources ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 ​ 2022 Consolidated Statements of Cash Flow Data: ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ $ 3,383,847 ​ $ (417,200) Net cash used in investing activities ​ (344,659) ​ (44,288) 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 ​ Liquidity As of June 30, 2023, we had cash and cash equivalents of $13,545,333, compared to $10,603,175 as of June 30, 2022, an increase of $2,942,158.
Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the year ended June 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 $ Change Net income (loss) ​ $ (1,632,384) ​ $ (285,089) ​ $ (1,347,295) Add (deduct): ​ ​ ​ ​ Other (income) expense ​ (7,154) ​ (1,147) ​ (6,007) Foreign currency transaction loss (gain) ​ 143,898 ​ (35,960) ​ 179,858 Provision for income taxes ​ 7,622 ​ 3,204 ​ 4,418 Depreciation and amortization ​ 17,651 ​ 11,522 ​ 6,129 Stock-based compensation ​ 1,096,384 ​ 1,007,673 ​ 88,711 Adjusted EBITDA ​ $ (373,983) ​ $ 700,203 ​ $ (1,074,186) ​ 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.
Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the year ended June 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 $ Change Net income (loss) ​ $ 571,623 ​ $ (1,632,384) ​ $ 2,204,007 Add (deduct): ​ ​ ​ ​ ​ Other (income) expense ​ (338,617) ​ (7,154) ​ (331,463) Foreign currency transaction loss (gain) ​ (121,953) ​ 143,898 ​ (265,851) Provision for income taxes ​ 5,602 ​ 7,622 ​ (2,020) Depreciation and amortization ​ 52,649 ​ 17,651 ​ 34,998 Stock-based compensation ​ 1,849,906 ​ 1,096,384 ​ 753,522 Adjusted EBITDA ​ $ 2,019,210 ​ $ (373,983) ​ $ 2,393,193 ​ 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.
Investing Activities Net cash used in investing activities was $44,288 for the year ended June 30, 2022 and resulted from the purchase of property and equipment. Net cash used in investing activities was $19,854 for the year ended June 30, 2021 and resulted from the purchase of property and equipment.
Investing Activities Net cash used in investing activities was $344,659 for the year ended June 30, 2023 and primarily from the payment for non-refundable deposit for asset acquisition of $297,450. Net cash used in investing activities was $44,288 for the year ended June 30, 2022 and resulted from the purchase of property and equipment.
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.
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. 23 Table of Contents 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.
Net cash provided by operating activities was $1,868,406 for the year ended June 30, 2021 and resulted primarily from an increase in deferred revenue of $1,279,844 and an increase in accounts payable and accrued expenses of $337,343, partially offset by an increase in accounts receivable of $268,193.
Operating Activities Net cash provided by operating activities was $3,383,847 for the year ended June 30, 2023 and resulted primarily from an increase in net income, the fair value of vested restricted common stock of $1,418,718, an increase in accounts payable and accrued expenses of $1,337,056 and an increase in deferred revenue of $886,198, partially offset by an increase in accounts receivable of $901,518.
The following table summarizes the exchange rates used: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ June 30, ​ 2022 2021 Period end Euro : US Dollar exchange rate 1.05 ​ 1.19 Average period Euro : US Dollar exchange rate 1.13 1.19 ​ ​ ​ ​ ​ Period end GBP : US Dollar exchange rate ​ 1.21 ​ 1.38 Average period GBP : US Dollar exchange rate ​ 1.34 1.34 ​ ​ ​ ​ Period end Mexican Peso : US Dollar exchange rate 0.05 0.05 Average period Mexican Peso : US Dollar exchange rate 0.05 0.05 ​ 24 Table of Contents Quarterly Information (Unaudited) The following table sets forth unaudited and quarterly financial data for the four quarters of fiscal years 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Mar. 31, Dec 31, ​ Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, ​ ​ 2022 2022 2021 2021 2021 2021 2020 2020 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ $ 1,886,845 ​ $ 1,786,224 ​ $ 1,604,829 ​ $ 1,509,874 ​ $ 1,429,160 ​ $ 1,344,183 ​ $ 1,220,535 ​ $ 1,141,688 Transactions ​ 6,675,164 ​ 6,971,128 ​ 6,267,458 ​ 6,232,630 ​ 6,788,494 ​ 6,996,349 ​ 6,229,200 ​ 6,606,737 Total revenue ​ 8,562,009 ​ 8,757,352 ​ 7,872,287 ​ 7,742,504 ​ 8,217,654 ​ 8,340,532 ​ 7,449,735 ​ 7,748,425 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ 240,214 ​ 219,051 ​ 231,668 ​ 245,656 ​ 257,320 ​ 233,696 ​ 217,003 ​ 203,952 Transactions ​ 5,038,653 ​ 5,299,804 ​ 4,802,959 ​ 4,836,473 ​ 5,218,118 ​ 5,404,196 ​ 4,841,150 ​ 5,094,897 Total cost of revenue ​ 5,278,867 ​ 5,518,855 ​ 5,034,627 ​ 5,082,129 ​ 5,475,438 ​ 5,637,892 ​ 5,058,153 ​ 5,298,849 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ 1,646,631 ​ 1,567,173 ​ 1,373,161 ​ 1,264,218 ​ 1,171,840 ​ 1,110,487 ​ 1,003,532 ​ 937,736 Transactions ​ 1,636,511 ​ 1,671,324 ​ 1,464,499 ​ 1,396,157 ​ 1,570,376 ​ 1,592,153 ​ 1,388,050 ​ 1,511,840 Total gross profit ​ 3,283,142 ​ 3,238,497 ​ 2,837,660 ​ 2,660,375 ​ 2,742,216 ​ 2,702,640 ​ 2,391,582 ​ 2,449,576 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing ​ 691,368 ​ 543,496 ​ 518,357 ​ 522,951 ​ 521,220 ​ 566,713 ​ 487,571 ​ 498,374 Technology and product dev. ​ 1,049,430 ​ 971,959 ​ 868,236 ​ 821,460 ​ 732,371 ​ 664,195 ​ 624,747 ​ 622,961 General and administrative ​ 1,663,671 ​ 1,629,371 ​ 1,616,135 ​ 1,497,223 ​ 1,354,244 ​ 1,233,603 ​ 1,118,750 ​ 1,161,061 Depreciation and amortization ​ 5,507 ​ 4,988 ​ 4,260 ​ 2,896 ​ 2,694 ​ 2,066 ​ 3,039 ​ 3,723 Stock-based comp. expense ​ 225,501 ​ 399,234 ​ 300,539 ​ 171,110 ​ 221,589 ​ 179,345 ​ 435,949 ​ 170,791 Foreign currency transaction loss (gain) ​ 91,279 ​ 29,394 ​ 11,982 ​ 11,243 ​ (890) ​ 6,648 ​ (17,469) ​ (24,249) Total operating expenses ​ 3,726,756 ​ 3,578,442 ​ 3,319,509 ​ 3,026,883 ​ 2,831,228 ​ 2,652,570 ​ 2,652,587 ​ 2,432,661 Other income (expenses and income taxes) ​ 5,347 ​ (585) ​ 264 ​ (5,494) ​ 136 ​ (322) ​ 399 ​ (2,270) Net income (loss) ​ (438,267) ​ (340,530) ​ (481,585) ​ (372,002) ​ (88,876) ​ 49,748 ​ (260,606) ​ 14,645 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income (loss) per common share: ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ (0.02) ​ $ (0.01) ​ $ (0.02) ​ $ (0.01) ​ $ — ​ $ — ​ $ (0.01) ​ $ — Basic weighted average common shares outstanding ​ 26,576,054 ​ 26,512,195 ​ 26,351,947 ​ 26,277,116 ​ 26,145,794 ​ 26,027,665 ​ 25,988,117 ​ 25,898,900 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per common share: ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ (0.02) ​ $ (0.01) ​ $ (0.02) ​ $ (0.01) ​ $ — ​ $ — ​ $ (0.01) ​ $ — Diluted weighted average common shares outstanding ​ 26,576,054 ​ 26,512,195 ​ 26,351,947 ​ 26,277,116 ​ 26,145,794 ​ 26,565,892 ​ 25,988,117 ​ 26,511,180 ​ 25 Table of Contents Comparison of the Years Ended June 30, 2022 and 2021 Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2022 2021 $ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 6,787,772 ​ $ 5,135,565 ​ $ 1,652,207 32.2 % Transactions ​ 26,146,380 ​ 26,620,780 ​ (474,400) (1.8) % Total revenue ​ 32,934,152 ​ 31,756,345 ​ 1,177,807 3.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue: ​ ​ ​ ​ Platforms ​ 936,589 ​ 911,970 ​ 24,619 2.7 % Transactions ​ 19,977,889 ​ 20,558,361 ​ (580,472) (2.8) % Total cost of revenue ​ 20,914,478 ​ 21,470,331 ​ (555,853) (2.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: ​ ​ ​ ​ Platforms ​ 5,851,183 ​ 4,223,595 ​ 1,627,588 38.5 % Transactions ​ 6,168,491 ​ 6,062,419 ​ 106,072 1.7 % Total gross profit ​ 12,019,674 ​ 10,286,014 ​ 1,733,660 16.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ Sales and marketing ​ 2,276,172 ​ 2,073,878 ​ 202,294 9.8 % Technology and product development ​ 3,711,085 ​ 2,644,274 ​ 1,066,811 40.3 % General and administrative ​ 6,406,400 ​ 4,867,659 ​ 1,538,741 31.6 % Depreciation and amortization ​ 17,651 ​ 11,522 ​ 6,129 53.2 % Stock-based compensation expense ​ 1,096,384 ​ 1,007,673 ​ 88,711 8.8 % Foreign currency transaction loss (gain) ​ 143,898 ​ (35,960) ​ 179,858 500.2 % Total operating expenses ​ 13,651,590 ​ 10,569,046 ​ 3,082,544 29.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ​ (1,631,916) ​ (283,032) ​ (1,348,884) (476.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ 7,154 ​ 1,147 ​ 6,007 523.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations before provision for income taxes ​ (1,624,762) ​ (281,885) ​ (1,342,877) (476.4) % Provision for income taxes ​ (7,622) ​ (3,204) ​ (4,418) (137.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ (1,632,384) ​ (285,089) ​ (1,347,295) (472.6) % ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 $ Change % Change Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 6,787,772 ​ $ 5,135,565 ​ $ 1,652,207 32.2 % Transactions ​ 26,146,380 ​ 26,620,780 ​ (474,400) (1.8) % Total revenue ​ $ 32,934,152 ​ $ 31,756,345 ​ $ 1,177,807 3.7 % ​ 26 Table of Contents Total revenue increased $1,177,807, or 3.7%, for the year ended June 30, 2022 compared to the prior year, due to the following: ​ ​ ​ ​ ​ ​ ​ ​ Category Impact Key Drivers Platforms ↑ ​ $ 1,652,207 Increased due to additional deployments to new and existing customers, and expansion from existing customers.
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 ​ 24 Table of Contents Quarterly Information (Unaudited) The following table sets forth unaudited and quarterly financial data for the four quarters of fiscal years 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Mar. 31, Dec. 31, ​ Sept. 30, June 30, Mar. 31, Dec 31, Sept. 30, ​ ​ 2023 2023 2022 2022 2022 2022 2021 2021 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ $ 2,303,375 ​ $ 2,249,632 ​ $ 2,110,272 ​ $ 2,019,967 ​ $ 1,886,845 ​ $ 1,786,224 ​ $ 1,604,829 ​ $ 1,509,874 Transactions ​ 7,656,342 ​ 8,092,794 ​ 6,606,394 ​ 6,664,676 ​ 6,675,164 ​ 6,971,128 ​ 6,267,458 ​ 6,232,630 Total revenue ​ 9,959,717 ​ 10,342,426 ​ 8,716,666 ​ 8,684,643 ​ 8,562,009 ​ 8,757,352 ​ 7,872,287 ​ 7,742,504 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ 275,110 ​ 268,630 ​ 253,073 ​ 230,473 ​ 240,214 ​ 219,051 ​ 231,668 ​ 245,656 Transactions ​ 5,764,064 ​ 6,046,523 ​ 5,059,766 ​ 5,104,922 ​ 5,038,653 ​ 5,299,804 ​ 4,802,959 ​ 4,836,473 Total cost of revenue ​ 6,039,174 ​ 6,315,153 ​ 5,312,839 ​ 5,335,395 ​ 5,278,867 ​ 5,518,855 ​ 5,034,627 ​ 5,082,129 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ Platforms ​ 2,028,265 ​ 1,981,002 ​ 1,857,199 ​ 1,789,494 ​ 1,646,631 ​ 1,567,173 ​ 1,373,161 ​ 1,264,218 Transactions ​ 1,892,278 ​ 2,046,271 ​ 1,546,628 ​ 1,559,754 ​ 1,636,511 ​ 1,671,324 ​ 1,464,499 ​ 1,396,157 Total gross profit ​ 3,920,543 ​ 4,027,273 ​ 3,403,827 ​ 3,349,248 ​ 3,283,142 ​ 3,238,497 ​ 2,837,660 ​ 2,660,375 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing ​ 455,030 ​ 642,624 ​ 666,608 ​ 521,216 ​ 691,368 ​ 543,496 ​ 518,357 ​ 522,951 Technology and product dev. ​ 991,093 ​ 953,677 ​ 922,132 ​ 875,290 ​ 1,049,430 ​ 971,959 ​ 868,236 ​ 821,460 General and administrative ​ 1,649,333 ​ 1,871,590 ​ 1,613,664 ​ 1,519,424 ​ 1,663,671 ​ 1,629,371 ​ 1,616,135 ​ 1,497,223 Depreciation and amortization ​ 22,163 ​ 18,332 ​ 6,342 ​ 5,812 ​ 5,507 ​ 4,988 ​ 4,260 ​ 2,896 Stock-based comp. expense ​ 585,384 ​ 480,458 ​ 608,703 ​ 175,361 ​ 225,501 ​ 399,234 ​ 300,539 ​ 171,110 Foreign currency transaction loss (gain) ​ (37,743) ​ (72,547) ​ (84,179) ​ 72,516 ​ 91,279 ​ 29,394 ​ 11,982 ​ 11,243 Total operating expenses ​ 3,665,260 ​ 3,894,134 ​ 3,733,270 ​ 3,169,619 ​ 3,726,756 ​ 3,578,442 ​ 3,319,509 ​ 3,026,883 Other income (expenses and income taxes) ​ 120,463 ​ 103,703 ​ 73,913 ​ 34,936 ​ 5,347 ​ (585) ​ 264 ​ (5,494) Net income (loss) ​ 375,746 ​ 236,842 ​ (255,530) ​ 214,565 ​ (438,267) ​ (340,530) ​ (481,585) ​ (372,002) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income (loss) per common share: ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ 0.01 ​ $ 0.01 ​ $ (0.01) ​ $ 0.01 ​ $ (0.02) ​ $ (0.01) ​ $ (0.02) ​ $ (0.01) Basic weighted average common shares outstanding ​ 26,981,813 ​ 26,929,314 ​ 26,816,550 ​ 26,718,171 ​ 26,576,054 ​ 26,512,195 ​ 26,351,947 ​ 26,277,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income (loss) per common share: ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ $ 0.01 ​ $ 0.01 ​ $ (0.01) ​ $ 0.01 ​ $ (0.02) ​ $ (0.01) ​ $ (0.02) ​ $ (0.01) Diluted weighted average common shares outstanding ​ 30,058,791 ​ 29,791,719 ​ 26,815,550 ​ 27,779,841 ​ 26,576,054 ​ 26,512,195 ​ 26,351,947 ​ 26,277,116 ​ 25 Table of Contents Comparison of the Years Ended June 30, 2023 and 2022 Results of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 2022 $ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 8,683,246 ​ $ 6,787,772 ​ $ 1,895,474 27.9 % Transactions ​ 29,020,206 ​ 26,146,380 ​ 2,873,826 11.0 % Total revenue ​ 37,703,452 ​ 32,934,152 ​ 4,769,300 14.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenue: ​ ​ ​ ​ Platforms ​ 1,027,286 ​ 936,589 ​ 90,697 9.7 % Transactions ​ 21,975,275 ​ 19,977,889 ​ 1,997,386 10.0 % Total cost of revenue ​ 23,002,561 ​ 20,914,478 ​ 2,088,083 10.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit: ​ ​ ​ ​ Platforms ​ 7,655,960 ​ 5,851,183 ​ 1,804,777 30.8 % Transactions ​ 7,044,931 ​ 6,168,491 ​ 876,440 14.2 % Total gross profit ​ 14,700,891 ​ 12,019,674 ​ 2,681,217 22.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ Sales and marketing ​ 2,285,478 ​ 2,276,172 ​ 9,306 0.4 % Technology and product development ​ 3,742,192 ​ 3,711,085 ​ 31,107 0.8 % General and administrative ​ 6,654,011 ​ 6,406,400 ​ 247,611 3.9 % Depreciation and amortization ​ 52,649 ​ 17,651 ​ 34,998 198.3 % Stock-based compensation expense ​ 1,849,906 ​ 1,096,384 ​ 753,522 68.7 % Foreign currency transaction loss (gain) ​ (121,953) ​ 143,898 ​ (265,851) (184.7) % Total operating expenses ​ 14,462,283 ​ 13,651,590 ​ 810,693 5.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations ​ 238,608 ​ (1,631,916) ​ 1,870,524 114.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ 338,617 ​ 7,154 ​ 331,463 4,633.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations before provision for income taxes ​ 577,225 ​ (1,624,762) ​ 2,201,987 135.5 % Provision for income taxes ​ (5,602) ​ (7,622) ​ 2,020 26.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ 571,623 ​ (1,632,384) ​ 2,204,007 135.0 % ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 $ Change % Change Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 8,683,246 ​ $ 6,787,772 ​ $ 1,895,474 27.9 % Transactions ​ 29,020,206 ​ 26,146,380 ​ 2,873,826 11.0 % Total revenue ​ $ 37,703,452 ​ $ 32,934,152 ​ $ 4,769,300 14.5 % ​ 26 Table of Contents Total revenue increased $4,769,300, or 14.5%, for the year ended June 30, 2023 compared to the prior year, due to the following: ​ ​ ​ ​ ​ ​ ​ ​ Category Impact Key Drivers Platforms ↑ ​ $ 1,895,474 Increased due to additional deployments to new and existing customers, and expansion from existing customers.
Transactions ↓ ​ $ 474,400 Decreased primarily due to lower paid order volume. ​ Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 $ Change % Change Cost of Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 936,589 ​ $ 911,970 ​ $ 24,619 2.7 % Transactions ​ 19,977,889 ​ 20,558,361 ​ (580,472) (2.8) % Total cost of revenue ​ $ 20,914,478 ​ $ 21,470,331 ​ $ (555,853) (2.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 % Change * As a percentage of revenue: ​ ​ Platforms ​ 13.8 % 17.8 % (4.0) % Transactions ​ 76.4 % 77.2 % (0.8) % Total ​ 63.5 % 67.6 % (4.1) % * 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 4.1%, from 67.6% for the previous year to 63.5%, for the year ended June 30, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact as percentage ​ Category ​ of revenue ​ Key Drivers Platforms ↓ 4.0 % Decreased primarily due to proportionally lower personnel costs.
Transactions ↑ ​ $ 2,873,826 Increased due to higher paid order volume and pricing initiatives, including additional paid order volume due to the FIZ asset acquisition which was effective January 1, 2023. ​ Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 $ Change % Change Cost of Revenue: ​ ​ ​ ​ ​ Platforms ​ $ 1,027,286 ​ $ 936,589 ​ $ 90,697 9.7 % Transactions ​ 21,975,275 ​ 19,977,889 ​ 1,997,386 10.0 % Total cost of revenue ​ $ 23,002,561 ​ $ 20,914,478 ​ $ 2,088,083 10.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 % Change * As a percentage of revenue: ​ ​ Platforms ​ 11.8 % 13.8 % (2.0) % Transactions ​ 75.7 % 76.4 % (0.7) % Total ​ 61.0 % 63.5 % (2.5) % * 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 2.5%, from 63.5% for the previous year to 61.0%, for the year ended June 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact as percentage ​ Category ​ of revenue ​ Key Drivers Platforms ↓ 2.0 % Decreased primarily due to lower software expense and proportionally lower personnel costs.
Net cash used in financing activities was $159,974 for the year ended June 30, 2021 and resulted from the repurchase of stock options and warrants of $308,313 and the repurchase of common stock of $178,012, partially offset by the proceeds from the exercise of warrants of $237,501 and the proceeds from the exercise of stock options of $88,850.
Financing Activities Net cash used in financing activities was $97,259 for the year ended June 30, 2023 and resulted from the repurchase of common stock of $104,250 and the payment of contingent acquisition consideration of $50,509, partially offset by the proceeds from the exercise of options of $57,500.
Transactions ↓ 0.8 % Decreased primarily due to lower copyright expenses and proportionally lower personnel costs. ​ 27 Table of Contents Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 $ Change % Change Gross Profit: ​ ​ ​ ​ ​ Platforms ​ $ 5,851,183 ​ $ 4,223,595 ​ $ 1,627,588 38.5 % Transactions ​ 6,168,491 ​ 6,062,419 ​ 106,072 1.7 % Total gross profit ​ $ 12,019,674 ​ $ 10,286,014 ​ $ 1,733,660 16.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 % Change* As a percentage of revenue: ​ ​ Platforms ​ 86.2 % 82.2 % 4.0 % Transactions ​ 23.6 % 22.8 % 0.8 % Total ​ 36.5 % 32.4 % 4.1 % * The difference between current and prior period gross profit as a percentage of revenue Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2022 2021 $ Change % Change Operating Expenses: ​ ​ ​ ​ ​ Sales and marketing ​ $ 2,276,172 ​ $ 2,073,878 ​ $ 202,294 9.8 % Technology and product development ​ 3,711,085 ​ 2,644,274 ​ 1,066,811 40.3 % General and administrative ​ 6,406,400 ​ 4,867,659 ​ 1,538,741 31.6 % Depreciation and amortization ​ 17,651 ​ 11,522 ​ 6,129 53.2 % Stock-based compensation expense ​ 1,096,384 ​ 1,007,673 ​ 88,711 8.8 % Foreign currency transaction loss (gain) ​ 143,898 ​ (35,960) ​ 179,858 500.2 % Total operating expenses ​ $ 13,651,590 ​ $ 10,569,046 ​ $ 3,082,544 29.2 % ​ ​ ​ ​ ​ ​ ​ ​ Category Impact Key Drivers Sales and marketing ↑ ​ $ 202,294 Increased primarily due to greater consulting expenses, including separation cost paid to a former officer, partially offset by lower marketing spend.
Transactions ↓ 0.7 % Decreased primarily due to lower personnel costs and expansion in copyright margins. ​ 27 Table of Contents Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 $ Change % Change Gross Profit: ​ ​ ​ ​ ​ Platforms ​ $ 7,655,960 ​ $ 5,851,183 ​ $ 1,804,777 30.8 % Transactions ​ 7,044,931 ​ 6,168,491 ​ 876,440 14.2 % Total gross profit ​ $ 14,700,891 ​ $ 12,019,674 ​ $ 2,681,217 22.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 % Change* As a percentage of revenue: ​ ​ Platforms ​ 88.2 % 86.2 % 2.0 % Transactions ​ 24.3 % 23.6 % 0.7 % Total ​ 39.0 % 36.5 % 2.5 % * The difference between current and prior period gross profit as a percentage of revenue Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2023 2022 $ Change % Change Operating Expenses: ​ ​ ​ ​ ​ Sales and marketing ​ $ 2,285,478 ​ $ 2,276,172 ​ $ 9,306 0.4 % Technology and product development ​ 3,742,192 ​ 3,711,085 ​ 31,107 0.8 % General and administrative ​ 6,654,011 ​ 6,406,400 ​ 247,611 3.9 % Depreciation and amortization ​ 52,649 ​ 17,651 ​ 34,998 198.3 % Stock-based compensation expense ​ 1,849,906 ​ 1,096,384 ​ 753,522 68.7 % Foreign currency transaction loss (gain) ​ (121,953) ​ 143,898 ​ (265,851) (184.7) % Total operating expenses ​ $ 14,462,283 ​ $ 13,651,590 ​ $ 810,693 5.9 % ​ ​ ​ ​ ​ ​ ​ ​ Category Impact Key Drivers Sales and marketing ↑ ​ $ 9,306 Increased primarily due to greater personnel costs and marketing discretionary spend mostly offset by lower consulting expenses.
Technology and product development ↑ ​ $ 1,066,811 Increased due to greater consulting and recruiting expenses and software development personnel costs. General and administrative ↑ ​ $ 1,538,741 Increased due to greater personnel costs and accounting, consulting and legal expenses.
Technology and product development ↑ ​ $ 31,107 Increased due to greater software development personnel costs partially offset by lower consulting and recruiting expenses.
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. COVID-19 We are subject to risks and uncertainties as a result of the COVID-19 pandemic.
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. Inflation Risk We do not believe that inflation has had a material effect on its operations to date, other than its impact on the general economy.
Greater personnel costs include separation costs paid to a former officer and an operations director. ​ Provision for Income Taxes During the years ended June 30, 2022 and 2021, we recorded a provision for income taxes of $7,622 and $3,204, respectively, an increase of $4,418.
General and administrative ↑ ​ $ 247,611 Increased due to greater recruiting, legal and travel expenses and personnel costs partially offset by lower accounting and consulting expenses. ​ Provision for Income Taxes During the years ended June 30, 2023 and 2022 we recorded a provision for income taxes of $5,602 and $7,622, respectively, a decrease of $2,020.
Removed
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.
Added
This increase was primarily due to cash provided by operating activities.
Removed
Furthermore, 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.
Added
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.
Removed
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.
Added
We have confirmed that the Loan and Security Agreement remains in effect post this transaction and that, in addition to having access to all of our deposits with SVB, we continue to have access to the revolving line of credit.
Removed
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.
Added
On March 28, 2023, we announced that we are continuing to evaluate the Loan and Security Agreement and relationship with SVB and that we have opened accounts with two additional banks as part of exploring an overall banking diversification strategy as well as additional access to lending facilities.
Removed
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. Inflation Risk We do not believe that inflation has had a material effect on its operations to date, other than its impact on the general economy.
Removed
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.

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