ReposiTrak(TRAK) - 2025 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for ReposiTrak, Inc. as of March 31, 2025, show an increase in total assets to $54.8 million from $51.6 million at June 30, 2024, driven by a rise in cash Consolidated Condensed Balance Sheets As of March 31, 2025, total assets were $54.8 million, an increase from $51.6 million on June 30, 2024, primarily driven by an increase in cash to $28.1 million, while total liabilities rose to $5.9 million and total stockholders' equity increased to $48.9 million Consolidated Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $28,134,321 | $25,153,862 | | Total Current Assets | $32,752,375 | $29,300,167 | | Goodwill | $20,883,886 | $20,883,886 | | Total Assets | $54,834,436 | $51,596,732 | | Liabilities & Equity | | | | Total current liabilities | $5,434,176 | $4,543,142 | | Total liabilities | $5,913,370 | $4,742,114 | | Total stockholders' equity | $48,921,066 | $46,854,618 | Consolidated Condensed Statements of Operations and Comprehensive Income For the three months ended March 31, 2025, revenue increased 16.3% year-over-year to $5.9 million, and net income rose to $2.0 million, while for the nine-month period, revenue grew 10.3% to $16.8 million, with net income increasing to $5.2 million and diluted EPS reaching $0.26 Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,913,732 | $5,084,866 | $16,845,782 | $15,270,729 | | Income from operations | $1,808,853 | $1,262,343 | $4,640,965 | $3,703,203 | | Net income | $1,965,788 | $1,550,427 | $5,182,023 | $4,380,124 | | Diluted income per share | $0.10 | $0.08 | $0.26 | $0.21 | Consolidated Condensed Statements of Cash Flows For the nine months ended March 31, 2025, net cash provided by operating activities was $6.8 million, a 38% increase from the prior year, while net cash used in financing activities decreased to $3.8 million, resulting in a $3.0 million increase in cash and cash equivalents to $28.1 million Cash Flow Highlights (Unaudited, Nine Months Ended March 31) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,763,371 | $4,910,741 | | Net cash provided by (used in) investing activities | $6,315 | ($48,538) | | Net cash used in financing activities | ($3,789,227) | ($4,400,402) | | Net increase in cash | $2,980,459 | $461,801 | | Cash at end of period | $28,134,321 | $24,452,680 | Notes to Consolidated Condensed Financial Statements The notes detail the company's SaaS business model, key accounting policies including revenue recognition, equity section specifics like the share repurchase program and preferred stock redemption plan, and related party transactions - The company operates a B2B SaaS platform with three main service suites: Compliance Management, Traceability Network (RTN), and Supply Chain Solutions, primarily serving food retailers, wholesalers, and their suppliers in a hub-and-spoke model[18][21][24] - On December 21, 2023, the company changed its corporate name from Park City Group, Inc. to ReposiTrak, Inc[22] Disaggregation of Revenue (Nine Months Ended March 31) | Revenue Type | 2025 | 2024 | | :--- | :--- | :--- | | Recurring revenue – subscription and support | $16,547,879 | $15,250,302 | | Non-recurring revenue – setup and training | $297,903 | $20,427 | | Total revenue | $16,845,782 | $15,270,729 | - The company is executing a three-year plan to redeem all Series B and B-1 Preferred Stock, which began in August 2023, with $4.3 million remaining available for future redemptions as of March 31, 2025[54][55][56] - The Board has authorized a total of $21.0 million for the Share Repurchase Program, with $7.9 million remaining available for repurchases as of March 31, 2025[62][63] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes revenue growth to increased demand for its compliance, supply chain, and traceability solutions, driven by regulatory requirements like FSMA 204, maintaining a strong liquidity position with $28.1 million in cash and no bank debt as of March 31, 2025 Recent Developments The company declared a quarterly cash dividend in March 2025, while the FDA's FSMA 204, despite an extended compliance deadline to July 2028, is driving significant demand for the ReposiTrak Traceability Network due to accelerated retailer requirements - On March 21, 2025, the Board declared a quarterly cash dividend of $0.01815 per share[77] - The compliance deadline for FSMA 204 was extended to July 20, 2028, but major retailers are accelerating timelines, with some requiring compliance by June 30, 2025, for all foods, not just those on the FDA's Food Traceability List (FTL)[81][83] Results of Operations For the three months ended March 31, 2025, revenue increased 16% year-over-year to $5.9 million, driven by recurring subscription growth, with operating expenses rising modestly, while for the nine-month period, revenue grew 10% to $16.8 million, reflecting operational leverage Comparison of Three Months Ended March 31, 2025 to 2024 | Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,913,732 | $5,084,866 | $828,866 | 16% | | Cost of services | $911,693 | $831,912 | $79,781 | 10% | | Sales and marketing | $1,408,861 | $1,349,838 | $59,023 | 4% | | General and administrative | $1,455,602 | $1,352,197 | $103,405 | 8% | Comparison of Nine Months Ended March 31, 2025 to 2024 | Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $16,845,782 | $15,270,729 | $1,575,053 | 10% | | Cost of services | $2,773,468 | $2,571,533 | $201,935 | 8% | | Sales and marketing | $4,392,997 | $4,119,716 | $273,281 | 7% | | General and administrative | $4,124,706 | $3,978,798 | $145,908 | 4% | Financial Position, Liquidity and Capital Resources The company's liquidity remains strong, with cash and equivalents increasing by 12% to $28.1 million at March 31, 2025, working capital improving to $27.3 million, and cash from operations growing 38% to $6.8 million, leading to the termination of its revolving credit facility and zero bank debt - Cash and cash equivalents increased by 12% to $28,134,321 as of March 31, 2025, from $25,153,862 at June 30, 2024[103][104] - Net cash provided by operating activities for the nine months ended March 31, 2025, increased 38% to $6,763,371, primarily due to higher deferred revenue and collections from traceability customers[105] - Working capital increased by $2.6 million to $27,318,199 at March 31, 2025, from $24,757,025 at June 30, 2024[109] - On March 15, 2024, the company chose not to renew its $10.0 million Revolving Credit Agreement due to its strong financial position and had zero bank debt at March 31, 2025[114][111] Quantitative and Qualitative Disclosures About Market Risk The company's market risk is primarily related to interest rate changes affecting its short-term investments, with no foreign currency exchange risk as business is conducted principally in the U.S., and management does not expect material effects on net income from interest rate changes - The company's financial results are not affected by foreign currency exchange rates as business is conducted principally in the United States[131] - Interest rate risk is related to investments in short-term financial instruments, with cash totaling $28.1 million at a weighted average interest rate of 4.84% as of March 31, 2025[132][134] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, concluding they are effective, with no material changes to internal control over financial reporting identified during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[135] - No material changes to the company's internal control over financial reporting were identified during the quarter[135] PART II - OTHER INFORMATION Legal Proceedings The company is not currently involved in any pending or threatened material legal proceedings that would have a material adverse effect on its business or financial condition - There are no pending or threatened material legal proceedings against the company[137] Risk Factors There have been no new risk factors identified beyond those disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2024 - No additional risk factors have been identified since the last Annual Report on Form 10-K[138] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None[139] Exhibits The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002, along with Inline XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[142]