ReposiTrak(TRAK) - 2025 Q4 - Annual Report

PART I Item 1. Business ReposiTrak provides B2B SaaS for compliance and supply chain, noting dividend growth and FSMA 204 opportunity - ReposiTrak operates a Software-as-a-Service (SaaS) platform for business-to-business (B2B) e-commerce, compliance & traceability, and supply chain management, primarily serving retailers, wholesalers, distributors, and their suppliers[18] - The company declared a quarterly cash dividend of $0.01815 per share, increasing to $0.02 per quarter ($0.08 annually) starting November 2025, marking the third increase since its establishment[19] - The compliance deadline for FSMA 204 (Food Safety Modernization Act Section 204(d)) was extended by 30 months to July 20, 2028, creating a significant market opportunity for ReposiTrak's traceability solutions[23][24] Overview The company offers a B2B SaaS platform for e-commerce, compliance, and supply chain management Recent Developments Recent developments include a dividend increase and an extended FSMA 204 compliance deadline Company History Technology originated from Mrs. Fields, with key acquisitions and a recent rebranding - The company's technology originated from Mrs. Fields Cookies operations, initially focusing on inventory and labor cost reduction for retail clients[26] - Key acquisitions include Prescient Applied Intelligence, Inc. in 2009 and a 75% interest in ReposiTrak in 2015, which later became a wholly-owned subsidiary[27][28] - The company rebranded from Park City Group, Inc. to ReposiTrak, Inc. on December 21, 2023, following a merger with its subsidiary[31] Target Industries Overview Serves U.S. consumer retail, facing online competition, regulatory risks, and demand for diversity - ReposiTrak primarily serves the U.S. consumer retail sector, including food, convenience stores, and general merchandise, but its solutions are applicable to other domestic and international customers[32] - The industry faces pressures from increased online competition, heightened regulatory and tort risks (especially for food retailers due to FSMA), and consumer demand for greater product diversity and local vendors[33] Solutions and Services Cloud-based solutions grouped into three suites, operating on a 'hub and spoke' model - The company's cloud-based solutions are grouped into three application suites: ReposiTrak Compliance Management, ReposiTrak Traceability Network (RTN), and ReposiTrak Supply Chain Solutions[38] - The business model is 'hub and spoke,' where retailers and wholesalers (Hubs) engage the company, requiring their suppliers (Spokes) to use the services[37] Technology, Development and Operations Focuses on common technology elements, hosted in a certified third-party data center - Product development focuses on common technology elements for multiple applications across core markets, with ongoing design, coding, and testing of new and enhanced products[40] - Operations are hosted in a third-party data center with SSAE No. 16 – SOC2 certification, featuring robust security and backup systems[41] Customers Primarily U.S. food-related consumer goods, with no single customer exceeding 10% of FY2025 revenue - The primary customer base consists of food-related consumer goods retailers, wholesalers, and their suppliers in the U.S. consumer retail sector[42] - No single customer accounted for more than 10% of the company's total revenue in fiscal year ended June 30, 2025[42] Sales, Marketing and Customer Support Marketing aims to increase awareness, sales streamlined to an inside team, with tiered customer support - Marketing objectives include increasing solution awareness, generating sales leads, and developing new customer relationships through trade shows, direct marketing, webinars, and industry publications[44] - The sales force was streamlined for cross-selling, shifting emphasis to an inside remote sales team, following the convergence of solutions to a single ReposiTrak branded user interface[45][46] - Customer support is available via telephone and email, with basic support during business hours and premier support (including extended availability and additional services) for an extra fee[47] Competition Competes with various vendors, leveraging industry knowledge, broad offerings, and relationships - The company competes with various software vendors, B2B exchanges, consulting firms, and technology platforms, many of which are larger with greater resources[48] - ReposiTrak believes its competitive advantages lie in deep industry knowledge, breadth and depth of offerings, and long-standing relationships with key industry groups[48] Patents and Proprietary Rights Protects technology via trademarks, copyrights, trade secrets, and patents, with nine U.S. patents awarded - The company protects its proprietary technology and name through trademarks, copyrights, trade secrets, and patent laws in the U.S. and other jurisdictions, along with confidentiality agreements[49] - ReposiTrak has been awarded nine U.S. patents and holds U.S. registered trademarks and copyrights, with its patent portfolio licensed to an unrelated third party while retaining usage rights[50] Employees Employed 69 individuals as of June 30, 2025, with plans to expand offshore workforce - As of June 30, 2025, the company employed 69 individuals, with 20 located overseas, and plans to expand its offshore workforce for analytics, professional services, and programming[52] Available Information Information regarding available company filings and reports is provided Government Regulation and Approval The company operates under various government regulations and approvals Cost of Compliance with Environmental Laws Compliance with environmental laws has not materially impacted the company's financial condition Item 1A. Risk Factors The company faces risks from revenue uncertainty, CEO dependence, competition, and FSMA 204 delay - Despite year-over-year growth and net income of $6.98 million in fiscal 2025 (up from $5.60 million in fiscal 2024), there's no assurance of continued profitability or revenue growth[57] - The business is highly dependent on the continued services and expertise of its founder and CEO, Randall K. Fields, whose loss could negatively impact operations[58] - The company faces threats from larger competitors with greater financial and operational resources, which could lead to pricing pressure, customer loss, or render ReposiTrak's offerings less desirable[64] - A delay in the FSMA 204 compliance deadline to July 20, 2028, may slow the adoption of ReposiTrak's technology, negatively affecting revenue[81] Risks Related to the Company Operational risks include dependence on the CEO, quarterly fluctuations, and competitive threats Risks Relating to Our Common Stock Risks to common stock include market volatility, limited trading, and potential dividend termination Item 1B. Unresolved Staff Comments There are no unresolved staff comments to report Item 1C. Cybersecurity ReposiTrak prioritizes cybersecurity via third-party experts and board oversight, with no material threats - The company employs processes managed by third-party experts to assess, identify, and manage cybersecurity risks, including mechanisms to prevent or mitigate data loss, theft, or misuse[94] - The Audit Committee of the Board of Directors evaluates cybersecurity assessment and management policies, including quarterly discussions with senior officers and the independent registered accounting firm[96] - As of the report date, no cybersecurity threats have been identified that have materially affected, or are reasonably likely to materially affect, the company's business, results of operations, or financial condition[95] Risk Management and Strategy Cybersecurity risk management involves third-party experts and controls to prevent data loss or incidents Governance The Audit Committee evaluates cybersecurity policies quarterly, ensuring robust governance Item 2. Properties Principal operations are in Murray, Utah, leasing approximately 5,000 square feet of office space - The company's principal executive offices are located in Murray, Utah, where it leases approximately 5,000 square feet of office space[97] Item 3. Legal Proceedings Historically, legal proceedings have not materially affected the company, with no current material cases - Historically, legal proceedings have not had a material adverse effect on the company's business, financial condition, results of operations, or liquidity[98] - There are no pending or threatened material legal proceedings as of the report date[98] Item 4. Mine Safety Disclosures This item is not applicable to the company PART II Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock trades on NYSE, pays quarterly dividends, and has an ongoing share repurchase program - The company's Common Stock is traded on the New York Stock Exchange (NYSE) under the trading symbol 'TRAK'[102] - The company paid a quarterly cash dividend of $0.01815 per share for the quarters ended December 31, 2024, March 31, 2025, and June 30, 2025. A 10% increase to $0.02 per share ($0.08 annually) was announced for the quarter ended September 30, 2025[104] - As of June 30, 2025, 2,131,384 shares of Common Stock have been repurchased under the Share Repurchase Program at an average price of $6.20, with $7.79 million remaining available[108][311] Common Stock Price Ranges (Fiscal Quarters) | Fiscal Quarter Ended | High (2025) | Low (2025) | High (2024) | Low (2024) | | :------------------- | :---------- | :--------- | :---------- | :--------- | | September 30 | $21.56 | $15.12 | $10.25 | $8.27 | | December 31 | $25.01 | $17.56 | $11.27 | $8.50 | | March 31 | $22.73 | $18.50 | $17.32 | $9.66 | | June 30 | $23.72 | $15.72 | $17.96 | $14.23 | Common Stock Repurchases (Fiscal Years Ended June 30, 2025 and 2024) | Period | Total Number of Shares Purchased by Period | Average Price Paid Per Share | Dollars Expended by Period Under the Plans or Programs | Remaining Amount Available for Future Share Repurchases Under the Plans or Programs | | :-------------------------------- | :--------------------------------------- | :--------------------------- | :----------------------------------------------------- | :-------------------------------------------------------------------------------- | | Year Ended June 30, 2024: | | | | | | July 1, 2023 – September 30, 2023 | 155,025 | $8.53 | $1,322,082 | $8,185,698 | | October 1, 2023 – December 31, 2023 | 22,012 | $8.79 | $193,492 | $7,992,206 | | January 1, 2024 – March 31, 2024 | - | - | - | $7,992,206 | | April 1, 2024 – June 30, 2024 | - | - | - | $7,992,206 | | Year Ended June 30, 2025: | | | | | | July 1, 2024 – September 30, 2024 | - | - | - | $7,992,206 | | October 1, 2024 – December 31, 2024 | 4,074 | $24.55 | $100,016 | $7,892,190 | | January 1, 2025 – March 31, 2025 | - | - | - | $7,892,190 | | April 1, 2025 – June 30, 2025 | 4,607 | $21.71 | $100,017 | $7,792,173 | Share Price History Common Stock price history reflects market fluctuations on the NYSE Dividends The company pays quarterly cash dividends, recently increasing to $0.02 per share Holders of Record Information on the number of common and preferred stock holders of record is provided - As of June 30, 2025, there were 611 holders of record for Common Stock (18,282,805 shares outstanding) and 3 holders of Series B Preferred Stock (336,098 shares outstanding)[105] Common Stock Share Repurchase Program The company has an ongoing share repurchase program with remaining available funds Item 6. [Reserved] This item is reserved and contains no information Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue increased 11% to $22.6 million, net income rose 17.5% to $6.98 million, with strong liquidity - Revenue increased by 11% to $22.61 million in fiscal year 2025, up from $20.45 million in fiscal year 2024, primarily due to growth in recurring subscription revenue across compliance, supply chain, and traceability solutions[139] - Net income for the year ended June 30, 2025, was $6.98 million, an increase of 17.5% from $5.96 million in the prior year[57][206] - The company's cash and cash equivalents increased by 14% to $28.57 million as of June 30, 2025, from $25.15 million in 2024, driven by higher revenue and interest income[149][150] - Working capital increased by $3.40 million to $28.15 million as of June 30, 2025, primarily due to increases in accounts receivable and prepaid assets, offset by changes in contract liabilities and deferred revenue[155] - The company terminated its revolving credit agreement with U.S. Bank N.A. on March 15, 2024, due to its strong financial position, having zero bank debt as of June 30, 2025[149][161] Overview The company's financial performance reflects revenue growth and strategic investments in compliance solutions Sources of Revenue Revenue is derived from subscription, transaction, professional services, license, and hosting fees - Revenue is derived from five sources: subscription fees, transaction-based fees, professional services fees, license fees, and hosting and maintenance fees[115] - A significant portion of revenue comes from Compliance and Supply Chain Food Safety solutions, with growing contributions from the Traceability solution, primarily through recurring subscription payments from suppliers[116] Revenue Recognition Revenue is recognized as control of deliverables transfers to customers, following ASU 2014-09 - The company adopted FASB's ASU 2014-09 (Topic 606) on July 1, 2018, using a modified retrospective approach for revenue recognition[120][121] - Revenue is recognized as control of deliverables (products, solutions, services) is transferred to customers, reflecting the expected consideration[238] Critical Accounting Policies Key policies include revenue recognition, asset valuations, income taxes, stock compensation, and software capitalization - Critical accounting policies include revenue recognition, goodwill and other long-lived asset valuations, income taxes, stock-based compensation, and capitalization of software development costs[125] - Management makes estimates and assumptions for financial statements, evaluating them based on historical experience and other reasonable factors, with actual results potentially differing[125][126] Results of Operations – Fiscal Years Ended June 30, 2025 and 2024 Analysis of revenue and expenses for fiscal years 2025 and 2024 highlights operational performance Revenue Revenue increased 11% due to growth in recurring subscription revenue across all solutions Revenue (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $22,606,066 | $2,152,746 | 11% | $20,453,320 | - The 11% increase in revenue was driven by growth in recurring subscription revenue across compliance, supply chain, and traceability, fueled by rising industry and consumer demand for food safety and transparency[139] Cost of Services and Product Support Cost of services increased 8% due to cybersecurity spending and offshore developer support for FSMA 204 Cost of Services and Product Support (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $3,681,330 | $264,880 | 8% | $3,416,450 | | 16% of total revenue | | | 17% of total revenue | - The 8% increase was primarily due to increased cybersecurity spending and offshore developer support services to accelerate and expand the FSMA 204 initiative[141] Sales and Marketing Expense Sales and marketing expense rose 6% from higher salaries, commissions, trade shows, and FSMA 204 marketing Sales and Marketing Expense (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $5,843,272 | $350,553 | 6% | $5,492,719 | | 26% of total revenue | | | 27% of total revenue | - The 6% increase was mainly due to higher salary, commission, trade show expenses, investment in FSMA 204 traceability marketing and advertising, and employee benefits[142] General and Administrative Expense General and administrative expense increased 5% primarily from higher salaries, stock compensation, and employee benefits General and Administrative Expense (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $5,602,807 | $272,370 | 5% | $5,330,437 | | 25% of total revenue | | | 26% of total revenue | - The 5% increase was primarily driven by higher salary, stock compensation, employee benefits, insurance, bad debt, and travel-related costs[143] Depreciation and Amortization Expense Depreciation and amortization expense increased 5% due to additional asset acquisitions, including a new data center Depreciation and Amortization Expense (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $1,251,514 | $62,031 | 5% | $1,189,483 | | 6% of total revenue | | | 6% of total revenue | - The 5% increase was due to additional assets acquired, including approximately $744,000 spent on security, backup, storage, and redundancy for a new data center in Reno, Nevada[145] Other Income and Expense Net other income increased 9% due to higher cash balances and increased interest income from investments Net Other Income (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $1,426,834 | $118,284 | 9% | $1,308,550 | | 6% of total revenue | | | 6% of total revenue | - Net other income increased by 9% due to higher cash balances and increased interest income from fixed income investments[146] Preferred Dividends Preferred dividends decreased 34% due to the redemption and retirement of Preferred Stock Preferred Dividends (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $360,306 | $(189,339) | -34% | $549,645 | | 2% of total revenue | | | 3% of total revenue | - Preferred dividends decreased by 34% due to the redemption and retirement of Preferred Stock. The company intends to redeem all remaining Preferred Stock by December 2026[147] Financial Position, Liquidity and Capital Resources The company maintains a strong financial position with increased cash and working capital, having terminated its credit facility Cash and cash equivalents Cash and cash equivalents increased 14% due to higher revenue, cash receipts, and interest income Cash and Cash Equivalents (As of June 30) | As of June 30, 2025 | As of June 30, 2024 | Variance ($) | Variance (%) | | :------------------ | :------------------ | :----------- | :----------- | | $28,568,805 | $25,153,862 | $3,414,943 | 14% | - The 14% increase in cash and cash equivalents is primarily due to higher revenue and corresponding cash receipts from customers, along with increased interest income[150] Net Cash Flows from Operating Activities Net cash provided by operating activities increased 21% due to higher net income and changes in working capital Cash Provided by Operating Activities (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $8,420,132 | $1,455,731 | 21% | $6,964,401 | - Net cash provided by operating activities increased by 21% due to higher net income, an increase in accounts receivable from subscription sales, and a decrease in operating lease liability[152] Net Cash Flows Used in Investing Activities Change from cash used to provided by investing activities due to decreased equipment purchases and marketable securities sale Cash (Used in) Provided by Investing Activities (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $169 | $(100,876) | -100% | $(100,707) | - The change from cash used to cash provided by investing activities was due to a decrease in equipment purchases offset by a sale of marketable securities[153] Net Cash Flows from Financing Activities Net cash used in financing activities decreased 12% due to lower common stock repurchases, partially offset by other payments Cash Used in Financing Activities (Fiscal Years Ended June 30) | Year Ended June 30, 2025 | Change ($) | Change (%) | Year Ended June 30, 2024 | | :----------------------- | :--------- | :--------- | :----------------------- | | $(5,005,358) | $(695,353) | -12% | $(5,700,711) | - Net cash used in financing activities decreased by 12% due to a decrease in common stock repurchases, partially offset by increased payments on financed capital assets and Preferred Stock redemption[154] Liquidity and Working Capital Working capital increased by $3.4 million, with zero bank debt after credit facility termination Working Capital (As of June 30) | As of June 30, 2025 | As of June 30, 2024 | Variance ($) | Variance (%) | | :------------------ | :------------------ | :----------- | :----------- | | $28,154,682 | $24,757,025 | $3,397,657 | 13.7% | Current Assets and Liabilities (As of June 30) | Item | As of June 30, 2025 | As of June 30, 2024 | Variance ($) | Variance (%) | | :---------------- | :------------------ | :------------------ | :----------- | :----------- | | Current assets | $33,685,800 | $29,300,167 | $4,385,633 | 15% | | Current liabilities | $5,531,118 | $4,543,142 | $987,976 | 22% | | Current ratio | 6.09 | 6.45 | -0.36 | -6% | - The company had zero bank debt as of June 30, 2025, after terminating its revolving credit agreement in March 2024 due to its strong financial position[158][161] Contractual Obligations Details of contractual obligations, primarily financing leases, are presented as of June 30, 2025 Contractual Obligations (As of June 30, 2025) | Item | Less than 1 Year | 1-3 Years | Total Lease Payments | Less Imputed Interest | Total | | :----------------- | :--------------- | :--------- | :------------------- | :-------------------- | :---- | | Financing Leases | $254,936 | $289,998 | $544,934 | $(34,961) | $509,973 | Inflation Historically, inflation has not materially affected the company, but higher rates could impact sales - Historically, inflation has not materially affected the company's financial condition or operations, but higher inflation rates could cause retailers to slow technology spending, impacting sales[164] Item 7A. Quantitative and Qualitative Disclosures About Market Risk All contracts are in U.S. dollars, eliminating foreign currency exchange rate risks and the need for hedging - All contracts require payment in U.S. dollars, eliminating exposure to foreign currency exchange rate risks and the need for hedging transactions[165] Item 8. Financial Statements and Supplementary Data The required financial statements and supplementary data are presented starting on Page F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure to report Item 9A. Controls and Procedures Management concluded disclosure controls and internal control over financial reporting were effective as of June 30, 2025 - As of June 30, 2025, the company's CEO and CFO concluded that disclosure controls and procedures were effective[168] - Management's assessment, based on the COSO framework, found internal control over financial reporting to be effective as of June 30, 2025[171] - No material changes in internal control over financial reporting were identified during the period covered by the report[172] Evaluation of Disclosure Controls and Procedures. Management assessed the effectiveness of disclosure controls and procedures as of June 30, 2025 Management's Annual Report on Internal Control over Financial Reporting. Management's assessment confirmed the effectiveness of internal control over financial reporting Changes in Internal Controls over Financial Reporting. No material changes in internal control over financial reporting were identified during the period Item 9B. Other Information There is no other information to report under this item Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance will be incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement, expected to be filed by October 28, 2025[176] Item 11. Executive Compensation Information regarding executive compensation will be incorporated by reference from the definitive proxy statement - Information for this item is incorporated by reference from the company's definitive proxy statement[177] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership will be incorporated by reference from the definitive proxy statement - Information for this item is incorporated by reference from the company's definitive proxy statement[178] Item 13. Certain Relationships and Related Transactions, and Director Independence Information regarding related transactions and director independence will be incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement[179] Item 14. Principal Accounting Fees and Services Information regarding principal accounting fees and services will be incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement[180] PART IV Item 15. Exhibits, Financial Statement Schedules This section lists all exhibits and financial statement schedules filed as part of the Annual Report on Form 10-K - The section includes a comprehensive list of exhibits, such as merger agreements, articles of incorporation, bylaws, stock incentive plans, employment agreements, and certifications[182][183][184][185] Financial Statements Report of Independent Registered Public Accounting Firm Haynie & Company issued an unqualified opinion on financial statements, identifying revenue recognition as a critical audit matter - Haynie & Company issued an unqualified opinion, stating that the consolidated financial statements present fairly the financial position and results of operations in conformity with GAAP[193] - A critical audit matter identified was 'Revenue Recognition – Multiple Element Arrangements' due to the complexity and judgment required in determining appropriate value and allocation of revenue to multiple performance obligations[197][199][200] Consolidated Balance Sheets Total assets increased to $55.3 million, liabilities to $5.8 million, and equity to $49.5 million in 2025 Consolidated Balance Sheet Highlights (As of June 30) | Item | 2025 ($) | 2024 ($) | | :------------------------ | :----------- | :----------- | | Total Assets | 55,329,047 | 51,596,732 | | Total Current Assets | 33,685,800 | 29,300,167 | | Cash | 28,568,805 | 25,153,862 | | Receivables, net | 4,133,026 | 3,678,627 | | Total Liabilities | 5,809,866 | 4,742,114 | | Total Current Liabilities | 5,531,118 | 4,543,142 | | Total Stockholders' Equity| 49,519,181 | 46,854,618 | - Current assets increased by 15% to $33.69 million in 2025, primarily due to increases in cash, accounts receivable, and prepaid expenses[157][204] - Current liabilities increased by 22% to $5.53 million in 2025, mainly due to higher deferred revenue and accrued liabilities, offset by a decrease in operating lease liabilities[158][204] Consolidated Statements of Operations Revenue increased 11% to $22.6 million, net income grew 17.5% to $6.98 million, with rising EPS Consolidated Statements of Operations Highlights (Fiscal Years Ended June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------------- | :----------- | :----------- | | Revenue | 22,606,066 | 20,453,320 | | Total operating expense | 16,378,923 | 15,429,089 | | Income from operations | 6,227,143 | 5,024,231 | | Net income | 6,978,127 | 5,958,290 | | Dividends on Preferred Stock | (360,306) | (549,645) | | Net income applicable to common shareholders | 6,617,821 | 5,408,645 | | Basic earnings per share | 0.36 | 0.30 | | Diluted earnings per share | 0.35 | 0.29 | - Revenue increased by 11% from $20.45 million in 2024 to $22.61 million in 2025[206] - Net income grew by 17.5% from $5.96 million in 2024 to $6.98 million in 2025[206] - Basic EPS increased from $0.30 in 2024 to $0.36 in 2025, and diluted EPS increased from $0.29 to $0.35[206] Consolidated Statements of Stockholders' Equity (Deficit) Total equity increased to $49.52 million in 2025, driven by net income, offset by dividends and Preferred Stock redemptions Consolidated Statements of Stockholders' Equity (Deficit) Highlights (Fiscal Years Ended June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------------- | :------------ | :------------ | | Total Stockholders' Equity | 49,519,181 | 46,854,618 | | Net income | 6,978,127 | 5,958,290 | | Common Stock Dividends - Declared | (1,296,071) | (1,173,716) | | Preferred Stock Redemption | (2,999,970) | (2,367,996) | | Stock Buyback | (200,035) | (1,515,574) | - Total stockholders' equity increased by $2.66 million, from $46.85 million in 2024 to $49.52 million in 2025[209] - The company redeemed 280,372 shares of Series B Preferred Stock for $3.00 million in 2025, and 212,402 shares of Series B-1 Preferred Stock for $2.27 million in 2024[209][306][307] Consolidated Statements of Cash Flows Operating cash flow increased 21% to $8.42 million, financing cash flow decreased, leading to a $3.41 million cash increase Consolidated Statements of Cash Flows Highlights (Fiscal Years Ended June 30) | Item | 2025 ($) | 2024 ($) | | :------------------------------------ | :------------ | :------------ |\ | Net cash provided by operating activities | 8,420,132 | 6,964,401 | | Net cash (used in) provided by investing activities | 169 | (100,707) | | Net cash used in financing activities | (5,005,358) | (5,700,711) | | Net (decrease) increase in cash and cash equivalents | 3,414,943 | 1,162,983 | | Cash and cash equivalents at end of period | 28,568,805 | 25,153,862 | - Net cash provided by operating activities increased by 21% to $8.42 million in 2025, driven by higher net income and changes in operating assets and liabilities[151][152][211] - Net cash used in financing activities decreased by 12% to $5.01 million in 2025, mainly due to a decrease in common stock buybacks[154][211] Notes to Consolidated Financial Statements Provides detailed explanations of accounting policies, financial components, and other relevant disclosures NOTE 1. Description of Business ReposiTrak is a SaaS B2B e-commerce, compliance, and supply chain management platform, rebranded in December 2023 - ReposiTrak, Inc. is a Nevada corporation operating a SaaS B2B e-commerce, compliance & traceability, and supply chain management platform[213] - The company's services are delivered through proprietary software products grouped into three application suites: Compliance Management, Traceability Network (RTN), and Supply Chain Solutions[214][220] - The company changed its corporate name from Park City Group, Inc. to ReposiTrak, Inc. on December 21, 2023[217] NOTE 2. Significant Accounting Policies Covers consolidation, critical policies, lease accounting, and revenue recognition principles - The financial statements are consolidated, eliminating all inter-company transactions and balances[219] - Critical accounting policies include revenue recognition, goodwill and other long-lived asset valuations, income taxes, stock-based compensation, and capitalization of software development costs[221] - The company adopted ASU 2016-02 'Leases (Topic 842)' on July 1, 2019, recognizing lease liabilities and right-of-use assets for all non-short-term leases[234] - Revenue is recognized when control of deliverables is transferred to customers, applying a five-step approach, and allocating transaction price to performance obligations based on standalone selling price[238][239] Disaggregated Revenue by Contract-Type (Fiscal Years Ended June 30) | Revenue Type | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | :--------- | | Recurring revenue – subscription and support services | 22,300,840 | 20,357,893 | 1,942,947 | 10% | | Non-recurring revenue – setup and training services | 305,226 | 95,427 | 209,799 | 220% | | Total | 22,606,066 | 20,453,320 | 2,152,746 | 11% | NOTE 3. Receivables Accounts receivable increased by 12.3%, with one customer exceeding 10% of total receivables Accounts Receivable (As of June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------- | :---------- | :---------- | | Accounts receivable | 4,375,463 | 3,906,200 | | Allowance for doubtful accounts | (242,437) | (227,573) | | Total Receivables, net | 4,133,026 | 3,678,627 | - Accounts receivable increased by $454,399 (12.3%) from 2024 to 2025[268] - One customer accounted for greater than 10% of accounts receivable at June 30, 2025, with a balance of $962,300[225] NOTE 4. Property and Equipment Net property and equipment increased to $602,172 in 2025, with higher depreciation expense Property and Equipment, Net (As of June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------------- | :---------- | :---------- | | Computer equipment | 2,700,590 | 2,684,626 | | Furniture and equipment | 180,976 | 180,976 | | Leased equipment | 905,765 | 629,947 | | Leasehold improvements | 681,314 | 681,314 | | Less accumulated depreciation and amortization | (3,866,473) | (3,663,586) | | Total Property and Equipment, net | 602,172 | 513,277 | - Depreciation expense was $581,513 for 2025, up from $546,341 in 2024[269] NOTE 5. Capitalized Software Costs Net capitalized software costs decreased to $128,207 in 2025, with lower amortization expense Capitalized Software Costs, Net (As of June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------- | :---------- | :---------- | | Capitalized software costs | 3,678,289 | 3,678,289 | | Less accumulated amortization | (3,550,082) | (3,293,668) | | Total Capitalized Software Costs, net | 128,207 | 384,621 | - Amortization expense for capitalized software was $256,414 in 2025, a decrease from $313,659 in 2024[270] NOTE 6. Acquisition Related Intangible Assets, Net Customer relationships were fully amortized by June 30, 2025 Customer Relationships, Net (As of June 30) | Item | 2025 ($) | 2024 ($) | | :---------------------------- | :---------- | :---------- | | Customer relationships | 5,537,161 | 5,537,161 | | Less accumulated amortization | (5,537,161) | (5,405,761) | | Total Customer Relationships, net | - | 131,400 | - Customer relationships were fully amortized by June 30, 2025, with amortization expense of $131,400 in both 2025 and 2024[271] NOTE 7. Accrued Liabilities Total accrued liabilities increased by 18.5% due to higher accrued taxes and stock-based compensation Accrued Liabilities (As of June 30) | Item | 2025 ($) | 2024 ($) | | :------------------------------ | :---------- | :---------- | | Accrued stock-based compensation | 237,249 | 172,170 | | Accrued compensation and other liabilities | 690,335 | 730,089 | | Accrued taxes | 511,248 | 231,935 | | Accrued dividends | 403,007 | 420,581 | | Total Accrued Liabilities | 1,841,839 | 1,554,775 | - Total accrued liabilities increased by $287,064 (18.5%) from 2024 to 2025, primarily due to higher accrued taxes and stock-based compensation[272] NOTE 8. Line of Credit The $10.0 million revolving credit agreement was terminated in March 2024, resulting in zero bank debt - The company terminated its $10.00 million revolving credit agreement with U.S. Bank N.A. on March 15, 2024, due to its strong financial position[277] - As of June 30, 2025, the company had zero bank debt[275] NOTE 9. Deferred Revenue Deferred revenue increased by 30.1% to $3.18 million, primarily from subscription revenue Deferred Revenue (As of June 30) | Item | 2025 ($) | 2024 ($) | | :----------- | :---------- | :---------- | | Subscription | 2,799,317 | 2,085,621 | | Other | 376,591 | 355,613 | | Total | 3,175,908 | 2,441,234 | - Deferred revenue increased by $734,674 (30.1%) from 2024 to 2025, primarily driven by subscription revenue[278] NOTE 10. Income Taxes Total income tax provision increased by 80.5% to $675,850, with federal current tax provision in 2025 Provision for Income Taxes (Fiscal Years Ended June 30) | Item | 2025 ($) | 2024 ($) | | :-------------------- | :-------- | :-------- | | Current: Federal | 641,718 | - | | Current: State | 34,132 | 374,491 | | Total Current Provision | 675,850 | 374,491 | - Total income tax provision increased by 80.5% from $374,491 in 2024 to $675,850 in 2025, with federal current tax provision appearing in 2025[280] - The company had net operating loss carryforwards of approximately $7.02 million at June 30, 2025, with a significant portion expiring in 2019[282] - A Research & Development Tax Study is estimated to provide $1.10 million to $4.80 million in tax credits, with $1.10 million estimated in the current tax provision[285] NOTE 11. Commitments and Contingencies Operating lease for office space expired and was not renewed, now on a month-to-month basis - The company's operating lease for its office space expired during fiscal year 2025 and was not renewed, resulting in derecognition of the related right-of-use asset and lease liability[291] - The company now leases office space under a month-to-month arrangement that qualifies as a short-term lease, for which no right-of-use asset or lease liability is recognized[291] NOTE 12. Employee Benefit Plan Offers a 401(k) plan, with employer matching contributions totaling $64,098 in 2025 - The company offers a 401(k) employee benefit plan and, at its discretion, may match employee contributions. Employer matching contributions totaled $64,098 in 2025, compared to $0 in 2024[293] NOTE 13. Stockholders Equity Total equity increased, driven by net income, offset by dividends and Preferred Stock redemptions - The company's 2011 Stock Plan terminated on April 1, 2023, and was replaced by the 2023 Omnibus Equity Incentive Plan (400,000 shares authorized) and the 2023 Employee Stock Purchase Plan (50,000 shares authorized), both approved by shareholders in November 2023[295][296][297] - As of June 30, 2025, there was approximately $4.50 million of unrecognized stock-based compensation obligations under equity compensation plans[301] - The company redeemed 280,372 shares of Series B Preferred Stock in 2025 for $3.00 million and completed the full redemption of Series B-1 Preferred Stock in fiscal 2024[306][307] Restricted Stock Units Activity | Item | Restricted Stock Units | Weighted Average Grant Date Fair Value ($/share) | | :------------------------ | :--------------------- | :----------------------------------------------- | | Outstanding at July 1, 2023 | 907,451 | 5.30 | | Granted | 15,130 | 10.55 | | Vested and issued | (69,437) | 5.53 | | Outstanding at June 30, 2024 | 853,144 | 5.37 | | Granted | 6,368 | 18.87 | | Vested and issued | (31,989) | 6.78 | | Outstanding at June 30, 2025 | 827,523 | 5.45 | Warrants Outstanding (As of June 30, 2025) | Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise Price | | :----------------------- | :----------------- | :-------------------------------------------------- | :------------------------------ | | $4.00 | 1,085,068 | 0.60 | $4.00 | | $10.00 | 15,825 | 0.57 | $10.00 | | Total | 1,100,893 | 0.60 | $4.09 | NOTE 14. Recent Accounting Pronouncements New ASUs on income tax and income statement expense disclosures are expected to impact disclosures, not financial statements - ASU 2023-09 (Improvements to Income Tax Disclosures) requires disaggregated income tax disclosures starting fiscal year 2026[313] - ASU 2024-03 (Disaggregation of Income Statement Expenses) requires specified disclosures about certain costs and expenses starting fiscal year 2028[314] - Both new standards are expected to impact disclosures but not the consolidated financial statements[313][314] NOTE 15. Related Party Transactions Paid Fields Management $1.03 million for executive services and redeemed Preferred Stock from related parties - The company paid Fields Management, Inc. (controlled by CEO Randall K. Fields) $1.03 million in 2025 and $969,804 in 2024 for executive management services[315] - In 2025, the company redeemed $2.94 million in Series B Preferred Stock from Mr. Randall K. Fields, his affiliates, and Robert W. Allen (a director)[316] NOTE 16. Segment Information Operates as one segment, with the CEO reviewing consolidated financial metrics for performance assessment - The company operates as one operating segment, with the CEO reviewing consolidated financial information (gross profit margin, operating margin, net income) to assess performance and allocate resources[317] NOTE 17. Subsequent Events No subsequent events identified that are reasonably likely to impact financial statements - No events have occurred subsequent to June 30, 2025, that are reasonably likely to impact the company's financial statements[318]