Research Solutions, Inc. (OTCMKTS:RSSS) Files An 8-K Entry into a Material Definitive Agreement

Research Solutions, Inc. (OTCMKTS:RSSS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

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On December 28, 2017, the Registrant entered into an Amended and Restated Loan and Security Agreement (the “New Loan Agreement”) dated October 31, 2017, with Silicon Valley Bank (“Bank”). The New Loan Agreement amends and restates in its entirety that certain Loan and Security Agreement between the Registrant and Bank dated July 23, 2010 (as amended, the “Existing Loan Agreement”). Notwithstanding the execution of the New Loan Agreement, the following existing documents entered into in connection with the Existing Loan Agreement shall continue in full force and effect and shall continue to secure all present and future indebtedness, liabilities, guarantees and other Obligations (as defined in the New Loan Agreement): all standard documents of Bank entered into by the Registrant in connection with letters of credit and/or foreign exchange contracts; all security agreements, collateral assignments and mortgages, including but not limited to those relating to patents, trademarks, copyrights and other intellectual property; all lockbox agreements and/or blocked account agreements; all UCC-1 financing statements and other documents filed with governmental offices which perfect liens or security interests in favor of Bank; and all standard documents of Bank entered into by the Registrant in connection with deposit account control agreements and landlord agreements.

The New Loan Agreement 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 December 31, 2019, and is subject to certain financial and performance covenants. Financial covenants include maintaining an adjusted quick ratio of unrestricted cash and net accounts receivable, divided by current liabilities plus debt less deferred revenue of at least 1.15 to 1.0, and maintaining tangible net worth of $1,500,000, plus 50% of net income for each fiscal quarter ended from and after December 31, 2017, plus 50% of the dollar value of equity issuances after October 1, 2017 and the principal amount of subordinated debt received after October 1, 2017. The line of credit bears interest at the prime rate plus 2.25% for periods in which the Registrant maintains an adjusted quick ratio of 1.3 to 1.0 (the “Streamline Period”), and at the prime rate plus 5.25% when a Streamline Period is not in effect. Upon the occurrence and during the continuance of an event of default, obligations will bear interest at a rate which is 5% above the rate that is otherwise then in effect. The line of credit is secured by the Registrant’s consolidated assets.

About Research Solutions, Inc. (OTCMKTS:RSSS)

Research Solutions, Inc. is a holding company. The Company provides a cloud based software-as-a-service (SaaS) research platform, which allows on-demand access to scientific, technical, and medical (STM) information for life science companies, academic institutions, and other research-intensive organizations. The Company provides three service offerings to its customers, which include Article Galaxy SaaS Platforms, Article Galaxy Transactions, and Reprints and ePrints. Article Galaxy SaaS platforms is its cloud-based SaaS solution (Article Galaxy), which consists of software and Internet-based interfaces. Article Galaxy Transactions provides its customers with a single source to the universe of published STM content. The Company has developed ePrint software, which transitions paper Reprints to electronic ePrints. The Company’s subsidiaries include Reprints Desk, Inc. and Reprints Desk Latin America S. de R.L. de C.V.

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