ReposiTrak(TRAK) - 2025 Q1 - Quarterly Report

Revenue and Growth - Revenue for the three months ended September 30, 2024, was $5,441,142, an 8% increase from $5,060,112 in the same period of 2023, driven by growth in recurring subscription revenue, particularly in traceability services[74]. Expenses - Cost of services and product support increased by 12% to $859,219 for the three months ended September 30, 2024, primarily due to investments in automation and information security services[76]. - Sales and marketing expenses rose by 2% to $1,529,100, accounting for 28% of total revenue, with increased commissions and marketing efforts related to FSMA 204 traceability awareness[77]. - General and administrative expenses increased by 1% to $1,292,551, representing 24% of total revenue, mainly due to higher employee benefit costs and insurance[78]. - Depreciation and amortization expense decreased by 9% to $280,211, reflecting the full depreciation of certain assets[80]. Income and Dividends - Net other income increased by 20% to $335,094, attributed to higher cash balances and increased interest income from fixed income instruments[81]. - The company declared a quarterly cash dividend of $0.0165 per share, representing an annual yield of approximately 0.34% based on closing prices on September 30, 2024[68]. - A 10% increase in the quarterly dividend was approved, effective for the dividend payable to shareholders of record on December 31, 2024[69]. - Preferred dividends decreased to $107,882 for the three months ended September 30, 2024, down 26% from $146,611 in the same period of 2023[82]. Cash Flow and Working Capital - Cash and cash equivalents increased by 3% to $25,790,206 as of September 30, 2024, compared to $25,153,862 as of June 30, 2024, primarily due to higher revenue[85]. - Net cash provided by operating activities rose 23% to $1,868,900 for the three months ended September 30, 2024, compared to $1,520,770 for the same period in 2023[87]. - Net cash provided by investing activities was $34,086 for the three months ended September 30, 2024, compared to $0 for the same period in 2023, due to the sale of marketable securities[88]. - Net cash used in financing activities decreased by 30% to $1,266,642 for the three months ended September 30, 2024, compared to $1,814,421 in the same period of 2023[90]. - Positive working capital increased by $877,518 to $25,634,543 as of September 30, 2024, compared to $24,757,025 at June 30, 2024[92]. Assets and Liabilities - Current assets totaled $30,091,919 as of September 30, 2024, reflecting a 3% increase from $29,300,167 as of June 30, 2024[93]. - Current liabilities decreased by 2% to $4,457,376 as of September 30, 2024, from $4,543,142 as of June 30, 2024[94]. - The Company had zero bank debt as of September 30, 2024, following the termination of its credit facility in March 2024[96]. Preferred Stock and Accounting - The Company plans to redeem all Series B and B1 Preferred stock over three years, starting from August 2023[82]. - The company adopted new accounting standards with no material changes to revenue recognition practices compared to previous periods[111]. Lease Obligations and Investments - The effective annual percentage rate (APR) for capital leases is fixed at 4.55%[118]. - As of September 30, 2024, the total cost of lease obligations is less than $400,000[118]. - The aggregate fair value of cash investments is $25,790,206 with a weighted average interest rate of 4.84%[119]. - The company does not engage in hedging transactions to mitigate foreign currency exchange rate risks, as its operations are primarily in the United States[116]. - The company assesses available-for-sale debt securities for credit loss, considering factors such as fair value and rating agency changes[115]. - The company’s exposure to interest rate changes is primarily related to short-term financial instruments, but it does not expect material changes in net income due to interest rate fluctuations[117]. - The company’s investments include U.S. government and corporate debt, classified as available-for-sale debt investments[114]. - The company uses a specific identification method to determine the cost basis of available-for-sale debt investments sold[114]. - The company’s financial results are not significantly affected by foreign market conditions due to its domestic focus[116].