Good afternoon. Welcome to Research Solutions Fiscal Second Quarter 2016 Earnings Call for the period ended December 31st, 2015. My name is Liz, and I will be your operator today. Joining us for today’s presentation is Research Solutions’ President and CEO, Peter Derycz; and the Company CFO, Alan Urban. Following their remarks today, we will open the call for your questions. Then, before we conclude today’s call, I will provide the necessary cautions regarding the forward-looking statements made by management, as well as information about the Company’s use of non-GAAP financial information. I would like to remind everyone that this call will be recorded and made available for replay via a link in the Investors section of the Company’s website. Now, I would like to turn the call over to Research Solutions’ Chief Executive Officer, Mr. Peter Derycz. Sir, please proceed.

Thank you, Liz. And thank you all for joining us today for our fiscal second quarter 2016 earnings conference call. During the second quarter, our growth trajectory with Article Galaxy, our SaaS Solution for low cost access to full-text scholarly research continued its steady climb. Revenue transactions and new customer acquisitions were up across the board. In fact, transactions were up 31% versus the same year ago quarter marking our fifth consecutive quarter of more than 20% year-over-year growth in Article Galaxy transactions. Perhaps one of the more notable achievements during the quarter was how our continued push into academia, a fairly new focus for us, resulted in a 55% increase in academic customer accounts. Academia now represents more than 16% of our total Article Galaxy customer accounts. This performance also reflects how our customer acquisition efforts have maintained a 90% plus closing rate when our solution is evaluated against our competitors. The many new features and enhancements incorporated in the fall edition release of Article Galaxy has helped us keep ahead of the pack as well as created many new ways to monetize this digital platform. Now before we delve deeper into discussing our operational progress during the quarter and our outlook for the second half, I’d like to turn the call over to our CFO, Alan Urban to take us through the financial details for the quarter. Alan?

Thank you, Peter. And welcome everyone. Earlier today, we issued a press release with our results for the fiscal second quarter ended December 31, 2015. A copy of this release is available in the Investors’ section of our website at researchsolutions.com. Starting with our income statement, revenue totaled $9.3 million in the fiscal second quarter, which was up 17% versus the same year ago quarter. About 52% of the increase is attributable to Article Galaxy and about 48% to our legacy Reprints and ePrints business. Article Galaxy revenue was up 14% versus the year ago quarter to $5.8 million and totaled 60% of total revenues. This revenue reflects the increased number of Article Galaxy transactions generated by new customers during the quarter with overall transactions up 31% to more than 181,000. Active customer accounts also increased to 18% to 862 in the second quarter versus 732 in the same quarter last year. We define active Article Galaxy customer accounts as the sum of the whole, the average whole, and partial customers for the respective quarter. A whole customer is one with at least one Article Galaxy transaction in every month of the respective quarter and a partial customer is one with at least one transaction in one or more months but not every month of the respective quarter. Even though Article Galaxy services are charged on a transactional basis, customer order volume tends to be consistent from month to month, which is in part due to repeat orders from our larger customers that require the implementation of our services into their workflow. So while Article Galaxy revenue is transactional, we consider it repeat transactional revenue. Revenue generated by our legacy Reprints and ePrints business was also up by 23% over the same year ago quarter to $3.5 million, which represented…

Thank you, Alan. Now, from an operational perspective, during the second quarter, we made tremendous progress enhancing Article Galaxy in terms of better security or time saving and cost saving features as well as creating even easier access to researchers. Altogether, these additions have made Article Galaxy an even more engaging and indispensable tool for our customers around the world, while sustaining our enviable position as the world leader in our space. The Autumn 2015 release of Article Galaxy included numerous new features including the new option for short term article rentals and instant access to subscription content from online databases. We also introduced to new Article Galaxy library portal add-on. While these new features provide many user benefits and competitive advantages we see them also stimulating greater user engagement with Article Galaxy which in turn leads to more transactions per user and greater monetization within the platform. For example, the new rental feature allows us to capture transactions that were previously passed over by a potential purchaser because the user was unsure if the articles full content met their needs. But now, they can satisfy their curiosity and get to the information they want to see but with less risk of blowing their budgets. Rental transaction pricing varies by publisher, but is generally between $3 to $21. A regit article maybe viewed for 3 days with the user presented the opportunity to upgrade their rental to a full PDF purchase at the regular price at any time during the initial rental period. So for one article we could see two transactions versus one and therefore, more transactions overall. While we see these new features and deficiencies translating at the stronger revenue generated by increased customer usage we also expect to monetize the new related module and features that an…

Thank you. [Operator Instructions] Our first question comes from Scott Billeadeau with Walrus Partners. Your line is now open. Please proceed.

Hey, guys. I’m wondering if you could talk just a little bit about margins, kind of at two levels, one the gross margin on Article Galaxy coming down in the quarter, kind of where can that go and then obviously I think you talked a little bit about potential operating, leveraging SG&A kind of below the gross margin line. But I’m wondering as we look forward just to kind of give us some thoughts on where the margins could go.

Okay. Hi, this is Alan. As we mentioned, margins were down slightly on Article Galaxy and the cause of that was if you look at on a per transaction basis, the average revenue per transaction decreased slightly for the most part due to some newer customers’, large customers that came on with slightly decreased service fees.

Okay.

And that something we -- something we’ve been seeing for little while and we’re continuing to see it. We do have some pricing pressure when it comes to some larger customers. Peter, I’m not sure if you want to give a word on that.

Yeah. And well, I think in addition to that the larger customers have quite a very mix of transaction types, so the transactions that we’re selling them often include things like link outs and other sort of lower cost transactions. So the effect -- I think sort of a combined effect of -- some of the bay accounts that have come on lately, and we’ve had quite of big wins, did have lower prices and then there are other transactions that makes it a little bit more varied than , some of the other smaller [indiscernible] price customer.

[Indiscernible], Scott, when we talk about margin, you asked where do you see it going -- sort of where do you go from here. I think the big thing is the platform …

Correct.

Now, we do sell our platform. We’ve sold. We started that a few years ago. We’re selling more. We’ve had quite a bit of growth in those platforms this year. We’re still not selling as many as we like, in fact, we’re selling so few that we really don’t even report the details of those sales. However, I think in the future, probably in the near future, we will start to report those details and that’s a high margin sales. Let me just -- to be clear, when we sell a platform that is in addition to the transactions we charge. So in effect, a customer is basically telling us we want to buy these transactions. On top of that, your platform is so valuable to us, we’re willing to pay you X dollars a year in the form of an annual license just to use your platform because it is valuable. So, when you look at the transactions that are flowing through the system, I had an investor the other day say, well, your transactions are up by double digits, 20% plus. Your revenue isn’t up by that number, so why does this transaction number matter. And I told that my response was because those transactions are the -- number of times customers are relying on our platform to get a piece of -- for a piece of copyrighted data to flow through the system. So it is true that some of those transactions may be free or may be very low priced, however, the customers relying on our platform for it. So that reliance on our platform translates into the need to hopefully for many customers buy an Article Galaxy platform at X dollars per year and that we believe will greatly improve our margins because that’s a very high margin sale.

Yeah. I got the meaning. That was kind of why I asked question like if you’re doing some platform sales shouldn’t that margin at some point be gone the other way. And you kind of answered that’s not -- not a ton of them going out the door. Is it -- maybe you talk about what the game plan is for that, because certainly if you have transactions up -- this is one end of having you being on a really fast moving treadmill where you’ve got to run 17% -- 30% transactions to get 15% revenue, and does that treadmill get too fast and you fall off the backend of it?

Well, I think our platform is pretty scalable in terms of transaction management volume of transactions and so on. So I’m not too worried on that front. In terms of game plan, it’s pretty obvious to us and probably to you here is that while platform fees have sort of been coming into the door and people finding the platform more and more value that’s really where our focus should be. And so we are the best at what we do in Article Galaxy and then transaction site particularly. But we have been enhancing the platform quite a bit, and we think it’s time to take this platform-fee revenue figures and start multiplying them by focusing more on communicating the value of the platform and then selling more platform fees basically. So, I think as you watch us go forward, you’ll see us start to shift our focus in that direction.

Great. And you said -- it’s like hey, we got to make sure this is ready for prime time and as you’ve went through the last year was some installations at some big guys and base kind of sure putting your teeth in terms of learning what they need. Is that platform really ready for prime time now, ready to go hey, it’s got pretty much everything we need or we need two more things to make it really -- where do you think you are in terms of that the platform itself is productized enough?

Yeah. I think you’re correct that we have sharpened our teeth at some larger organizations -- customer organizations lately. So we have made a lot of enhancements that we need in the platform I think that we’re -- I would say about 80% there. At this point, I think we need to do some few little enhancements and additions to the platform to really be able to go more full more on it. And other enhancements would be great sort of high visibility enhancements for our customers and you’ll see announcements about those enhancements over the next couple of quarters and then also in terms of reorganizing and reorienting and reeducating our sales and marketing approach. Yeah, it’s going to be part of the equation. I mentioned in earlier call that sales and marketing what we built is really going to be our main challenge going forward.

Yeah. I was going to say that you got the right guys for that now or I guess that would be follow-up dramatically different to go in an sell a platform as oppose to -- the folks you have out doing that now are they the right -- is that the right setup?

Yeah. That’s a good question. The sales approach definitely needs to turn the page on to a new chapter right where we’re found the transactions to lot more focus on the platform so that’s going to be training issue in terms of sales. But we also believe that the platform is also more responsive to the marketing side. So how are we marketing this? Is a solution that people will come and test and try and play with on a test basis. So the marketing side is really I think where the change going to occur that we’re really going to be marketing the platform for research deficiency versus trying to have sales people sell transactions.

Yeah, to peddle transactions, right. Alright. Thanks guys. I don’t know if there is other question, but I’ll step aside for bit.

Okay. Thanks Scott.

Yep.

[Operator Instructions] You have a follow-up question from the line of Scott Billeadeau with Walrus Partners. Your line is now open. Please go ahead.

Hi, guys. Just keep more in me. Just a quick question on Europe. I’m not sure I picked up -- may be talk you got a sales engineer over there now to help in terms of getting deals done. And forget what you said how much -- what percentage your transactions or percentage of revenue have you broke that out that’s coming from overseas at this point.

Yeah. We mentioned on the call that in terms of Article Galaxy over 40% of our revenue is now coming from Europe. So it’s definitely an area of intense focus for us. It’s been a growth market for us so we think we got solutions really right for that market.

Good. And I think you also mentioned that you can -- given the platform you can support -- lot of that you can support I assume from here or from locations you already have as its primarily. On the sales side you got -- you sound like these guys working like one of paper hang or you need more over there in terms of resources -- again you might have mentioned this but I didn’t quite pickup what game plan was for international sales resources.

Yeah. So we -- in Europe we have additional sales reps. Do you want to call that sales?

Yeah.

So when the sales people run into an opportunity or need a little bit more advance technical support that’s where sales engineer comes to play.

Yeah.

So, it was just more about time zones and then having local availability and case in--person meetings required or something like that. So, that's the way its setup now. I just want to just point also that about 50% of our revenue is U.S. based and then 10% of it of the remaining revenue is rest of the world. So, we're pretty U.S., North America and Europe focused. Now, we don't have a lot of China exposure or anything like that going on.

Yeah. And then is there any early-on any more acceptance of a platform fee in Europe or U.S. or is that -- any -- or where that could be more acceptable earlier?

I think most markets are the same from that perspective. I think the concept is not only acceptable but probably even expected on a go-forward basis. We're seeing a lot of companies adopt a lot of SaaS solutions, whether it's Salesforce.com, or Zendesk or anything else that seems to be the trend that organizations are really relying on external platforms to get a lot of important mission-critical things done. And we think we're going to be one of the platforms in the mix.

Good. And then I guess last question, any content -- anything new in terms of content that you should have that you're working on to get onto the platform that's a significant gee if we had this content; we could get a few deals over the hump. Anything to that aspect or any type of content that could be you're thinking you had down the road?

Yeah. Well, as we developed a platform, that's one of the things that we've really kept top of mind is let's build the platform in a way that we can deliver other content types through it. So, when you look at corporate R&D or sort of research and development activities around the world, yeah, scientific information is definitely a key -- difficult to solve piece of the puzzle, but there are other intellectual property enhancing content categories that our customer show interest in, everywhere from news and business information, to patent and intellectual property standards and things like that. So, we're definitely designed a platform to be able to deliver more content types.

All right guys. That's all I got. Thanks.

All right. Thank you.

Thanks Scott.

At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Peter Derycz for his closing remarks.

All right. Well, thanks to everyone for joining us on our call today. I'd also like to extend a special note of thanks to our customers, suppliers, and our internal teams who have all been essential contributors to our success. If you were not able to address all of your questions today, please feel free to contact us directly. We look forward to speaking with you soon. Operator?