TRAK 10-K
ReposiTrak, Inc. (TRAK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Commission file number)
REPOSITRAK, INC.
(Exact name of registrant as specified in its charter)
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| State or other jurisdiction of incorporation | (IRS Employer Identification No.) |
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| (Address of principal executive offices) | (Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging Growth Company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the issuer as of December 31, 2025, which is the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $
As of September 28, 2026,
DOCUMENTS INCORPORATED BY REFERENCE
Items 10, 11, 12, 13 and 14 of Part III incorporate by reference certain information from ReposiTrak, Inc.’s definitive proxy statement, to be filed with the Securities and Exchange Commission on or before October 28, 2026.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED June 30, 2026
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including the risk factors set forth below and elsewhere in this Annual Report. See “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Statements made herein are as of the date of the filing of this Annual Report with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
| ITEM 1. | BUSINESS |
Overview
ReposiTrak, Inc., a Nevada corporation (“ReposiTrak”, “We”, “us”, “our” or the “Company”) is a Software-as-a-Service (“SaaS”) company that operates a business-to-business (‘B2B’) e-commerce, compliance, traceability and supply chain management platform. The platform enables retailers, wholesalers, distributors and their suppliers to (a) manage supply chain programs, including out-of-stock management and scan-based trading; (b) manage compliance documents and data and support compliance with traceability requirements; and (c) improve product ordering and forecasting to increase supply chain efficiency and manage risk.
Recent Developments
Dividend Payment
On June 18, 2026, the Board of Directors declared a quarterly cash dividend of $0.02 per share, payable to shareholders of record on June 30, 2026, which was paid on or about August 14, 2026. Based on the closing prices on June 30, 2026, this represented an annual dividend yield of approximately 0.88%. The $0.02 quarterly dividend rate is equivalent to $0.08 per share annually if maintained. The declaration and payment of future dividends are subject to the discretion of the Board of Directors and will depend on, among other factors, the Company’s financial condition, results of operations and capital requirements.
SPAR Group Transactions
On March 29, 2026, the Company entered into an amendment (the “Amendment”) to that certain Services Agreement dated March 13, 2026 (the “Agreement”) by and between the Company and SPAR Group, Inc. (the “Client”), which Agreement was entered into in the ordinary course of business. Under the terms of the Agreement, the Company agreed to provide certain services (the “Services”) to the Client for a one-year term beginning March 13, 2026. In accordance with the terms of the Agreement, the Client was to pay the Company in cash for the Services provided thereunder.
Under the terms of the Amendment, the Company can elect to receive payment for the Services in cash, shares of common stock, par value $0.01 per share, of the Client (“Client Stock”), or a combination thereof. Any issuance of Client Stock pursuant to the Amendment shall be valued based upon the volume weighted average price (“VWAP”) of Client Stock for the five (5) trading days immediately preceding the applicable issuance date.
On May 29, 2026, the Company elected to receive payment of the outstanding balance owed to the Company under the Amendment in shares of Client Stock, resulting in the issuance by Client to the Company of 3,190,569 shares of Client Stock at a deemed value of $0.728710119 per share, in consideration of the payment of $2,325,000 otherwise payable to the Company under the terms of the Agreement.
On July 1, 2026 (the “Closing Date”), the Company entered into Stock Purchase Agreements with William Bartels (“Bartels”) and WHB Services, Inc. Incentive Savings Plan and Trust (“WHB”) (together, the “Agreements”). Under the terms of the Agreements, on the Closing Date, the Company is to be issued an aggregate of 4,709,837 shares of common stock (the “SPAR Shares”) of Client. Aggregate contingent consideration due under the Agreements on the Closing Date by the Company for the SPAR Shares is approximately $3.3 million consisting of (i) a previously paid non-refundable deposit of $100,000 (the “Deposit”); (ii) $139,883 to be paid upon delivery to the Company of the SPAR Shares held by William Bartels; (iii) $485,118 to be paid upon delivery to the Company of the SPAR Shares held by WHB; and (iv) the issuance of an unsecured promissory note in the principal amount of $2,571,885 (the “Note”). The Note bears interest at 6.0% per annum and matures on the fourth anniversary of its issuance. Principal is payable in annual cash installments of $725,000, together with all accrued and unpaid interest, on each of the first three anniversaries of the Note, with the remaining outstanding principal and accrued interest due at maturity on July 1, 2030. The Note may be prepaid at any time without premium or penalty and contains customary events of default, including payment defaults and bankruptcy events. Upon an event of default, the holder may accelerate all outstanding amounts due under the Note. The Note also provides for automatic acceleration upon certain change-of-control transactions involving the Company or upon the sale of substantially all of the Company’s assets. In addition, amounts remaining outstanding become payable to the seller’s designated heirs or beneficiaries within sixty (60) days following the seller’s death.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on June 3, 2026, and is incorporated herein by reference. The foregoing descriptions of the Agreements and the Note do not purport to be complete and are qualified in their entirety by reference to the Agreements and the Note, copies of which were filed as Exhibits 10.1, 10.2 and 10.3, respectively, to the Company's Current Report on Form 8-K filed with the SEC on July 8, 2026, and are incorporated herein by reference.
Federal Regulation & Traceability: FSMA 204(d) and USDA SOE
In 2020, the United States Food and Drug Administration (“FDA”) announced the “New Era of Smarter Food Safety” blueprint, outlining objectives to enhance traceability, strengthen predictive analytics, accelerate outbreak response, address evolving business models, reduce food contamination, and promote a more robust food safety culture.
In November 2022, the FDA issued the final rule under the Food Safety Modernization Act Section 204(d) (“FSMA 204”) relating to traceability for high-risk foods. The rule became effective on January 20, 2023, and applies broadly to entities that manufacture, process, pack, or hold foods designated on the FDA’s Food Traceability List (“FTL”). The FTL encompasses 16 food categories, representing thousands of products commonly distributed across grocery, convenience, and foodservice channels.
FSMA 204 requires impacted entities to establish traceability programs capable of capturing, creating, maintaining, and sharing specified Key Data Elements (“KDEs”) at defined Critical Tracking Events (“CTEs”) throughout the supply chain. These records must be retained for a minimum of two years and be retrievable within 24 hours upon request by the FDA. Compliance necessitates the management of substantial volumes of supply chain data across a highly fragmented network of more than one million facilities.
In March 2025, the FDA extended the compliance deadline for FSMA 204 by 30 months to July 20, 2028. Despite this extension, adoption of traceability solutions continues to accelerate due to commercial and competitive pressures. Several major retailers have announced traceability requirements that exceed the scope of FSMA 204, including requirements for additional data elements, application across all food categories (not limited to the FTL), and implementation timelines preceding FDA enforcement.
While the FTL currently defines the regulatory scope, the FDA has indicated that it views these requirements as foundational and encourages broader, industry-wide adoption. Early indicators suggest the industry is moving toward comprehensive traceability across all food products.
Traceability is fundamentally a supply chain data management challenge, which aligns with the Company’s core competencies. The Company has developed the ReposiTrak Traceability Network (“RTN”), a scalable, cloud-based solution designed to facilitate compliant traceability through low-cost, rapid deployment across supplier, distributor, and retailer networks. The RTN connects thousands of supply chain participants and is designed to support end-to-end traceability, improve recall responsiveness, and enhance food safety outcomes.
Patent-Pending Technology
The Company has developed proprietary, patent-pending technologies designed to address critical challenges associated with large-scale traceability data management. These innovations focus on (i) the automated detection and correction of errors in supply chain traceability data and (ii) the generation of compliant traceability records without reliance on case-level scanning or probabilistic methods.
The first patent-pending technology relates to the use of advanced algorithms and machine learning techniques to identify inconsistencies, omissions, and inaccuracies within traceability datasets and to automatically correct such errors in real time. This capability is intended to materially improve data integrity, reduce manual intervention, and increase confidence in compliance with regulatory requirements.
The second patent-pending technology relates to the Company’s ability to generate end-to-end traceability records across distribution environments without requiring physical scanning of individual cases. This approach leverages system-level data integration and validation techniques to create compliant Key Data Element records at each Critical Tracking Event, enabling scalable deployment in high-volume distribution operations.
These patent-pending innovations are integral to the Company’s traceability platform and are designed to enhance scalability, reduce implementation complexity, and differentiate the Company’s offering in a rapidly evolving regulatory and commercial environment.
Company History
The Company’s technology has its genesis in the operations of Mrs. Fields Cookies, a company co-founded by Randall K. Fields, the Company’s Chief Executive Officer. The Company began operations utilizing patented computer software and profit optimization consulting services to help its retail clients reduce their inventory and labor costs.
On January 13, 2009, the Company acquired 100% of Prescient Applied Intelligence, Inc., a Delaware corporation (“Prescient”), a provider of solutions for retailers which, among other things, captured information about transactions between retailers and their suppliers.
In February 2014, Prescient changed its name to Park City Group, Inc. As a result, both Park City Group and PCG Delaware were named Park City Group, Inc.
In June 2015, the Company elected to exercise an option to acquire a 75% interest in ReposiTrak from Leavitt Partners, LP for a cash payment and negotiated the purchase of the remaining 25% with an exchange of shares of the Company. As a result, ReposiTrak became a wholly owned subsidiary of the Company.
As of June 30, 2020, the Company completed its Supply Chain and Compliance and Food Safety, and MarketPlace supplier discovery and B2B e-commerce solution. As a result, the Company is now largely capable of delivering its services through a single ReposiTrak branded user interface.
As of June 30, 2023, the Company was substantially complete with its Audit Management solution providing a wide variety of Good Manufacturing Practices (“GMP”) and Global Food Safety Initiative (“GFSI”) approved audits. The new solution will help improve quality and safety by making audits more efficient and accurate through better corrective actions management and documentation.
In connection with the rebranding of the Company, on December 21, 2023, the Company effected a change of its corporate name from Park City Group, Inc. to ReposiTrak, Inc., pursuant to a short-form merger with its wholly owned subsidiary, ReposiTrak, Inc., a Utah corporation, with the Company remaining as the surviving entity.
Target Industries Overview
The Company develops its software and services for multi-store retail chains, wholesalers and distributors, and their suppliers. The bulk of the Company’s customers are in the U.S. consumer retail sector for food, convenience store, and general merchandise, although the Company’s software and services are not sold exclusively to this customer base, and the Company believes that its software and services are also applicable to a wide variety of other potential customers domestically and abroad.
Backdrop
The U.S. consumer retail sector in general, which includes food, convenience store, and general merchandise retailers more specifically, is facing pressure from several significant forces. These include (i) increased competitive pressures from the rise of online retailers, (ii) increased regulatory and tort risks, particularly for food retailers, as a result of the passage of the FSMA which placed greater responsibility for the safety of products on the participants in the food supply chain, and (iii) the pressure from consumers to increase product diversity, and in particular, the number of smaller, localized vendors.
Solutions and Services
The Company’s software and services are designed to address the business problems faced by our customers. These solutions are delivered via a cloud-based infrastructure and grouped in three product application suites that mirror the workflow of the Company’s customers as they manage the activities of their supply chain.
The Company’s services are grouped in three application suites:
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ReposiTrak Compliance Management (“Compliance”) solutions, which help the Company’s customers vet suppliers and reduce a company’s potential regulatory, legal, and criminal risk from its supply chain partners by providing a way for them to ensure these suppliers are compliant with food safety regulations, such as the Food Safety Modernization Act of 2011 (“FSMA”); |
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ReposiTrak Traceability Network (“Traceability” or “RTN”), which helps the Company’s customers comply with federal regulatory requirements of traceability and is designed to provide a scalable, cost-effective approach to capturing and sharing key data elements (“KDEs”) now required by Section 204(d) of FSMA 2011 as designated products move through the supply chain at each ‘event’ known as a ‘critical tracking event’ or “CTE”, which includes tracking from farm to shelf; and |
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ReposiTrak Supply Chain Solutions (“Supply Chain”), which help the Company’s customers to more efficiently manage various interactions with their suppliers. In other words, they provide customers with greater flexibility in sourcing products by enabling them to choose new suppliers and integrate them into their supply chain faster and more cost effectively, and they help customers to manage these relationships more efficiently, enhancing revenue while lowering working capital, labor costs and reducing waste. |
The Company’s services are delivered through proprietary software products designed, developed, marketed and supported by the Company. These products provide visibility and facilitate improved business processes among all key constituents in the supply chain, starting with the retailer and moving backwards to suppliers and eventually to raw material providers.
The Company provides cloud-based applications and services that address e-commerce, supply chain, food safety, compliance and traceability activities. The principal customers for the Company’s products are household name multi-store food retail chains and restaurants including their suppliers, branded food manufacturers, food wholesalers and distributors, and other food service businesses.
The Company has a hub and spoke business model. The Company is typically engaged by retailers and wholesalers (“Hubs”), which in turn require their suppliers (“Spokes”) to utilize the Company’s services.
Professional Services
The Company has two professional services groups: (i) the Business Analytics Group offers business-consulting services to suppliers and retailers in the grocery, convenience store and specialty retail industries; and (ii) the Professional Services Group provides consulting services to ensure that our solutions are seamlessly integrated into our customers’ business processes as quickly and efficiently as possible.
Technology, Development and Operations
Product Development
The Company’s product development strategy is focused on creating common technology elements that can be leveraged in multiple applications across our core markets. To remain competitive, the Company is currently designing, coding and testing new products and developing expanded functionality of its current products.
Operations
We currently serve our customers from a third-party data center hosting facility. Along with the Company’s Statement on Standards for Attestation Engagements (“SSAE”) No. 16 certification Service Organization Control (“SOC2”), the third-party facility is also a SSAE No. 16 – SOC2 certified location and is secured by around-the-clock guards, biometric screening and escort-controlled access, and is supported by multiple on-site backup generators in the event of a power failure.
Customers
The Company is currently engaged primarily by food-related consumer goods retailers, wholesalers, and their suppliers. The bulk of the Company’s customers are in the U.S. consumer retail sector for food, convenience stores, and general merchandise. However, the Company is opportunistic and will offer its solutions to a wide variety of other potential customers. No single customer exceeded 10% of the Company’s total revenue in the fiscal year ended June 30, 2026.
Sales, Marketing and Customer Support
Sales and Marketing
Through a focused and dedicated sales effort designed to address the requirements of each of its solutions, the Company believes it is well positioned to understand its customers’ businesses, trends in the marketplace, competitive products and opportunities for new product development.
The Company’s primary marketing objectives have been to increase awareness of our solutions, generate sales leads and develop new customer relationships. To this end, the Company attends industry trade shows, conducts direct marketing programs and webinars, publishes industry trade articles, participates in interviews and selectively advertises in industry publications.
In fiscal 2016, the Company embarked on a process of repurposing the Company’s supply chain applications so that they can be delivered via ReposiTrak’s highly scalable online infrastructure. As a result, the Company is now largely capable of delivering its services through a single ReposiTrak branded user interface.
With the convergence of the Company’s solutions to a single delivery platform, the Company also reorganized its sales force and reoriented its marketing efforts. This process involved streamlining the sales force to enable cross-selling by reducing regional account managers and shifting our sales emphasis towards the Company’s inside remote sales team located largely in Utah.
Customer Support
The Company’s global customer support group responds to both business and technical inquiries from its customers relating to how to use its solutions and is available to customers by telephone and email. Basic customer support during business hours is available to customers. Premier customer support includes extended availability and additional services and is available along with additional support services such as developer support and partner support for an additional fee.
Competition
The Company competes with various software vendors, developers and integrators, B2B exchanges, consulting firms, focused solution providers, and business intelligence technology platforms. Although our competitors are often considerably larger companies in size with larger sales forces and marketing budgets, the Company believes that its deep industry knowledge, the breadth and depth of our offerings, and our long-standing relationships with key industry, wholesaler, and other trade groups and associations, give it a competitive advantage.
Patents and Proprietary Rights
The Company relies on a combination of trademark, copyright, trade secret and patent laws in the U.S. and other jurisdictions as well as confidentiality procedures and contractual provisions to protect our proprietary technology and our name. We also enter into confidentiality agreements with our employees, consultants and other third parties and control access to software, documentation and other proprietary information.
The Company has been awarded nine U.S. patents, and a number of U.S. registered trademarks and U.S. copyrights relating to its software technology and solutions. The Company’s patent portfolio has been transferred to an unrelated third party, although the Company retains the right to use the licensed patents in connection with its business. The Company’s policy is to continue to seek patent protection for all developments, inventions and improvements that are patentable and have potential value to the Company and to protect its trade secrets and other confidential and proprietary information, and the Company intends to defend its intellectual property rights to the extent its resources permit.
The Company is not aware of any patent infringement claims against it; however, there are no assurances that litigation to enforce patents issued to the Company to protect proprietary information, or to defend against the Company’s alleged infringement of the rights of others will not occur. Should any such litigation occur, the Company may incur significant litigation costs, and it may result in resources being diverted from other planned activities, which may have a material adverse effect on the Company’s operations and financial condition.
Employees
As of June 30, 2026, the Company employed a total of 67 employees. Of these employees, 22 are located overseas. The Company plans to continue expanding its offshore workforce to augment its analytics services offerings, expand its professional services and to provide additional programming resources. The employees are not represented by any labor union.
Available Information
The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, it files annual, quarterly and other reports and information with the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Copies of these reports, proxy and information statements and other information may be obtained by electronic request at the following e-mail address: [email protected].
Government Regulation and Approval
Like all businesses, the Company is subject to numerous federal, state and local laws and regulations, including regulations relating to patent, copyright, and trademark law matters.
Cost of Compliance with Environmental Laws
Compliance with environmental laws and regulations has not had a material effect on the Company’s capital expenditures, earnings or competitive position, and the Company does not currently expect such compliance to have a material effect in the foreseeable future.
| ITEM 1A. |
RISK FACTORS |
An investment in our Common Stock is subject to many risks. You should carefully consider the risks described below, together with all of the other information included in this Annual Report, including the financial statements and the related notes, before you decide whether to invest in our Common Stock. Our business, operating results and financial condition could be harmed by any of the following risks. The trading price of our Common Stock could decline due to any of these risks, and you could lose all or part of your investment.
Risks Related to the Company
Although we have experienced year-over-year growth and continue to generate net income in recent periods, there can be no assurance that our revenue growth will continue or that we will operate profitably in the future.
Our marketing strategy emphasizes sales of subscription-based services, instead of annual licenses, and using Spokes to connect to our Hubs. This strategy has resulted in the development of a foundation of retail and wholesale Hubs to which suppliers can be “connected”, thereby accelerating future growth. If, however, this marketing strategy fails, revenue and operations will be negatively affected. We had net income of $7,569,487 for the year ended June 30, 2026, compared to a net income of $6,978,127 for the year ended June 30, 2025. Although we generated a year over year increase in net income in the year ended June 30, 2026, there can be no assurance that we will continue to increase net income and/or continue to achieve profitability in future periods. We cannot provide assurance that we will continue to generate revenue or have sustainable profits. If we do not continue to operate profitably in the future, our current cash resources will be used to fund our operating losses. Continued losses would have an adverse effect on the long-term value of our Common Stock and any investment in the Company.
Our business is dependent upon the continued services of our founder and Chief Executive Officer, Randall K. Fields. Should we lose the services of Mr. Fields, our operations will be negatively impacted.
Our business is dependent upon the expertise and continued service of our founder and Chief Executive Officer, Randall K. Fields. Mr. Fields is essential to our operations. Accordingly, an investor must rely on Mr. Fields’ management decisions that will continue to control our business affairs. The loss of the services of Mr. Fields may have a materially adverse effect upon our business.
Quarterly and annual operating results may fluctuate, which makes it difficult to predict future performance.
A significant portion of our revenue stream comes from the sale of monthly subscriptions and professional services charged to new customers. These amounts will fluctuate and are uncertain because predicting future sales is difficult and involves speculation. In addition, we may potentially experience significant fluctuations in future operating results caused by a variety of factors, many of which are outside of our control, including:
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our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements; |
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the renewal rates for our subscriptions and other services; |
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changes in our pricing policies, whether initiated by us or as a result of competition; |
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the cost, timing and management effort for the introduction of new services, including new features to our existing services; |
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the rate of expansion and productivity of our sales force; |
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new product and service introductions by our competitors; |
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variations in the revenue mix of editions or versions of our service; |
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technical difficulties or interruptions in our service; |
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general economic conditions that may adversely affect either our customers’ ability or willingness to purchase additional subscriptions or upgrade their services, or delay a prospective customer’s purchasing decision, or reduce the value of new subscription contracts or affect renewal rates; |
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timing of additional expense and investments in infrastructure to support growth in our business; |
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regulatory compliance costs; |
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consolidation in the food industry; |
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the timing of customer payments and payment defaults by customers; |
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extraordinary expenses, such as litigation or other dispute-related settlement payments; |
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the impact of new accounting pronouncements; |
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the timing of stock awards to employees and the related financial statement impact; and |
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system or service failures, security breaches or network downtime. |
Future operating results may fluctuate because of the foregoing factors, making it difficult to predict operating results. Period-to-period comparisons of operating results are not necessarily meaningful and should not be relied upon as an indicator of future performance. In addition, a large portion of our expenses will be fixed in the short-term, particularly with respect to facilities and personnel making future operating results sensitive to fluctuations in revenue.
We face threats from competing and emerging technologies that may affect our revenue growth and profitability, as well as competitors that are larger and have greater financial and operational resources that may give them an advantage in the market.
Markets for our type of software products and that of our competitors are characterized by development of new software, software solutions or enhancements that are subject to constant change; rapidly evolving technological change; and unanticipated changes in customer needs. Because these markets are subject to such rapid change, the life cycle of our products is difficult to predict. As a result, we are subject to the following risks: whether or how we will respond to technological changes in a timely or cost-effective manner; whether the products or technologies developed by our competitors will render our products and services obsolete or shorten the life cycle of our products and services; and whether our products and services will achieve market acceptance.
Moreover, many of our competitors are larger and have greater financial and operational resources than we do. This may allow them to offer better pricing terms to customers in the industry, which could result in a loss of potential or current customers or could force us to lower prices. Our competitors may have the ability to devote more financial and operational resources to the development of new technologies that provide improved operating functionality and features to their product and service offerings. If successful, their development efforts could render our product and service offerings less desirable to customers, again resulting in the loss of customers or a reduction in the price we can demand for our offerings. Any of these actions could have a significant effect on revenue.
We face risks associated with new product introductions.
Our future revenue is dependent upon the successful and timely development of new and enhanced versions of our products and potential product offerings suitable to the customers’ needs. If we fail to successfully upgrade existing products and develop new products, and those new products do not achieve market acceptance, our revenue will be negatively impacted.
It may be difficult for us to assess risks associated with potential new product offerings:
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it may be difficult for us to predict the amount of service and technological resources that will be needed by customers of new offerings, and if we underestimate the necessary resources, the quality of our service will be negatively impacted, thereby undermining the value of the product to the customer; |
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technological issues between us and our customers may be experienced in capturing data necessary for new product offerings, and these technological issues may result in unforeseen conflicts or technological setbacks when implementing these products, which could result in material delays and even result in a termination of the engagement; |
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a customer’s experience with new offerings, if negative, may prevent us from having an opportunity to sell additional products and services to that customer; |
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if customers do not use our products as recommended and/or fail to implement any needed corrective action(s), it is unlikely that customers will experience the business benefits from these products and may, therefore, be hesitant to continue the engagement as well as acquire any other products from us; and |
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delays in proceeding with the implementation of new products for a new customer will negatively affect our cash flow and our ability to predict cash flow. |
We cannot accurately predict renewal or upgrade rates and the impact these rates may have on our future revenue and operating results.
Our customers have no obligation to renew their subscriptions for our services after the expiration of their initial subscription period. Our renewal rates may decline or fluctuate as a result of factors, including customer dissatisfaction with our services, customers’ ability to continue their operations and spending levels, consolidation, other competitive solutions, taking the process in-house, and deteriorating general economic conditions. If our customers do not renew their subscriptions for our services or reduce the level of service at the time of renewal, our revenue will decline, and our business will suffer.
Our future success also depends in part on our ability to increase rates, sell additional features and services, or sell additional subscriptions to our current customers. This may also require increasingly sophisticated and costly sales and marketing efforts that are targeted at senior management. If these strategies fail, we will need to refocus our efforts toward other solutions, which could lead to increased development and marketing costs, delayed revenue streams, and otherwise negatively affect our operations.
If our compliance and food safety solutions do not perform as expected, whether as a result of operator error or otherwise, it could impair our operating results and reputation.
Our success depends on the food safety market’s confidence that we can provide reliable, high-quality reporting for our customers. We believe that our customers are likely to be particularly sensitive to product defects and operator errors, including if our systems fail to accurately report issues that could reduce the liability of our clients in the event of a product recall. In addition, our reputation and the reputation of our products can be adversely affected if our systems fail to perform as expected. However, if our customers or potential customers fail to implement and use our systems as suggested by us, they may not be able to deal with a recall as effectively as they otherwise could have. As a result, the failure or perceived failure of our products to perform as expected could have a material adverse effect on our revenue, results of operations and business.
If a customer is sued because of a recalled product, we could be joined in that suit, the defense of which would impair our operating results.
We believe our compliance and food safety solutions would be helpful in the event of a recall. However, their ultimate usefulness is dependent on how the customer uses our products, which is in many ways out of our control. Similarly, a customer that is a defendant in a product liability case could claim that had our services performed as represented the extent of potential liability would have been minimized and therefore, we should have some contributory liability in the case. Defending such a claim could have a material adverse effect on our revenue, results of operations and business.
The deployment of our services, or consultation provided by our personnel, could result in litigation naming us as a party, which litigation could result in a material and adverse effect on us, and our results of operations.
Our compliance and food safety solutions are marketed to potential customers based, in part, on our service’s ability to reduce a company’s potential regulatory, legal, and criminal risk from its supply chain partners. In the event litigation is commenced against a customer based on issues caused by a constituent in the supply chain, or consultation provided by our personnel, we could be joined or named in such litigation. As a result, we could face substantial defense costs. In addition, any adverse determination resulting in such litigation could have a material and adverse effect on us, and our results of operations.
We face risks relating to the sale and delivery of merchandise to customers.
We depend on a number of other companies to perform functions critical to our ability to deliver products to our customers, including maintaining inventory, preparing merchandise for shipment to our customers and delivering purchased merchandise on a timely basis. We also depend on the delivery services that we and they utilize. We also depend on our partners to ensure proper labeling of products. Issues or concerns regarding product safety, labeling, content or quality could result in consumer or governmental claims. In limited circumstances, we sell merchandise that we have purchased. In these instances, we assume the risks related to inventory.
We face risks associated with proprietary protection of our software.
Our success depends on our ability to develop and protect existing and new proprietary technology and intellectual property rights. We seek to protect our software, documentation and other written materials primarily through a combination of patents, trademarks, and copyright laws, trade secret laws, confidentiality procedures and contractual provisions. While we have attempted to safeguard and maintain our proprietary rights, there are no assurances that we will be successful in doing so. Our competitors may independently develop or patent technologies that are substantially equivalent or superior to ours.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. In some types of situations, we may rely in part on ‘shrink wrap’ or ‘point and click’ licenses that are not signed by the end user and, therefore, may be unenforceable under the laws of certain jurisdictions. Policing unauthorized use of our products is difficult. While we are unable to determine the extent to which piracy of our software exists, software piracy can be expected to be a persistent problem, particularly in foreign countries where the laws may not protect proprietary rights as fully as the U.S. We can offer no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not reverse engineer or independently develop similar technology.
We may discover software errors in our products that may result in a loss of revenue, injury to our reputation or subject us to substantial liability.
Non-conformities or bugs (“errors”) may be found from time to time in our existing, new or enhanced products after commencement of commercial shipments, resulting in loss of revenue or injury to our reputation. In the past, we have discovered errors in our products and as a result, have experienced delays in the shipment of products. Errors in our products may be caused by defects in third-party software incorporated into our products. If so, we may not be able to fix these defects without the cooperation of these software providers. Because these defects may not be as significant to the software provider as they are to us, we may not receive the rapid cooperation that may be required. We may not have the contractual right to access the source code of third-party software, and even if we do have access to the code, we may not be able to fix the defect. In addition, our customers may use our service in unanticipated ways that may cause a disruption in service for other customers attempting to access their data. Since our customers use our products for critical business applications, any errors, defects or other performance problems could hurt our reputation and may result in damage to our customers’ business. If that occurs, we could lose future sales or customers may make warranty or other claims against us, which could result in an increase in our provision for doubtful accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation. Customers could also elect not to renew their subscription or delay or withhold payment to us. These potential scenarios, successful or otherwise, would likely be time-consuming and costly.
Interruptions or delays in service from our third-party data center hosting facility could impair the delivery of our service and harm our business.
We currently serve our customers from a third-party data center hosting facility located in the U.S. Any damage to, or failure of, our systems generally could result in interruptions in our service. As we continue to add capacity, we may move or transfer our data and our customers’ data. Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our service. Further, any damage to, or failure of, our systems generally could result in interruptions in our service. Interruptions in our service may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our renewal rates and our ability to attract new customers. Our business will also be harmed if our customers and potential customers believe our service is unreliable.
As part of our current disaster recovery arrangements, our production environment and all of our customers’ data is currently replicated in near real-time in a separate facility physically located in a different region of the U.S. We do not control the operation of these facilities, and they are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct. Despite precautions taken at these facilities, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions in our service. Even with the disaster recovery arrangements, our service could be interrupted.
If our security measures are breached and unauthorized access is obtained to a customer’s data, our data or our information technology systems, our service may be perceived as not being secure, customers may curtail or stop using our service and we may incur significant legal and financial exposure and liabilities.
Our service involves the storage and transmission of customers’ proprietary information, and security breaches could expose us to a risk of loss of this information, litigation and possible liability. These security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise during transfer of data to additional data centers or at any time, and result in someone obtaining unauthorized access to our customers’ data or our data, including our intellectual property and other confidential business information, or our information technology systems. Additionally, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information, such as usernames, passwords or other information in order to gain access to our customers’ data or our data, including our intellectual property and other confidential business information, or our information technology systems. Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures. Any security breach could result in a loss of confidence in the security of our service, damage our reputation, disrupt our business, lead to legal liability and negatively impact our future sales.
Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our customers and employees, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disrupt our operations and the services we provide to customers, damage our reputation and cause a loss of confidence in our products and services, which could adversely affect our business/operating margins, revenues and competitive position.
The secure processing, maintenance and transmission of this information is critical to our operations and business strategy, and we devote significant resources to protecting our information. The expense associated with protecting our information could reduce our operating margins.
A delay in the deadline for compliance with FSMA 204 may slow the adoption of our technology as a compliance tool for FSMA, therefore negatively affecting our revenue.
Section 204(d) of the FSMA (“FSMA 204”) went into effect in January 2023, and the deadline for compliance was January 20, 2026. In March 2025, the deadline for compliance with FSMA 204 was extended by 30 months to July 20, 2028. In the event the FDA delays the deadline for compliance, and the industry or our customers likewise delay the rate of information technology spending in response, our customers’ ability or willingness to purchase our enterprise cloud computing services could adversely affect our operating results, and such effect may be material.
Failure or delay by our customers in the implementation of Section 204(d) of the FSMA may slow the adoption of our technology as a compliance tool for FSMA 204.
The FDA proposed FSMA 204 in September 2020, which was published in November 2022 and went into effect in January 2023, although compliance has been delayed until July 20, 2028. FSMA 204 applies to all foods on the FDA’s Food Traceability List. In the event (i) FSMA 204 is modified to the extent of applicability of the rules of FSMA 204 to various food industry sectors, (ii) the penalties for violations of FSMA 204 are reduced or eliminated, or (iii) further delays or failure by the industry to adopt practices in compliance with FSMA 204, in each case, could slow the adoption of our technology as a compliance tool for FSMA 204, which could have a material adverse effect on our business, results of operations, and financial condition.
Weakened global economic conditions may adversely affect our industry, business and results of operations.
The rate at which our customers purchase new or enhanced services depends on several factors, including general economic conditions. The U.S. and other key international economies have experienced in the past a downturn in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy. For example the U.S. Consumer Price Index (“CPI”), which measures a wide-ranging basket of goods and services, rose substantially following the COVID-19 pandemic. While the CPI has come off its recent highs, the Company’s general business strategy may be adversely affected by any such inflationary fluctuations, economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. These conditions affect the rate of information technology spending and could adversely affect our customers’ ability or willingness to purchase our enterprise cloud computing services, delay prospective customers’ purchasing decisions, reduce the value or duration of their subscription contracts or affect renewal rates, all of which could adversely affect our operating results, or cause us to increase our prices to maintain the same level of profitability.
Geopolitical conflicts could potentially affect our sales and disrupt our operations and could have a material adverse impact on the Company.
Geopolitical conflicts could adversely impact our operations or those of our customers. The extent to which these events impact our operations and those of our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence. If the uncertainty surrounding geopolitical conflicts and in the global marketplace continues, or if we, or any of our customers encounter any disruptions to our or their respective operations, facilities or stores, then we or they may be prevented or delayed from effectively operating our or their business, respectively, and the marketing and sale of our services and our financial results could be adversely affected.
Our investment in and commercial relationship with SPAR Group, Inc. (“SPAR”), as well as our obligations under indebtedness incurred in connection with a portion of our investment, may not generate the returns or benefits we anticipate and expose us to additional risks.
As of June 30, 2026, we beneficially owned approximately 14.8% of SPAR’s outstanding common stock. Based on the facts and circumstances existing at that time, including our lack of control or significant influence over SPAR’s operating and financial policies, our investment was accounted for at fair value, with changes in fair value reflected in our results of operations. On July 1, 2026, we acquired an additional 4,709,837 shares of SPAR common stock, increasing our beneficial ownership to approximately 31% of SPAR’s outstanding common stock. Our investment in SPAR was acquired through a series of transactions, including purchases for cash and other consideration and the receipt of shares as consideration for services provided to SPAR. In connection with the July 2026 acquisition, we issued an unsecured promissory note (the “Note”) in the original principal amount of approximately $2.6 million. In addition to our equity investment, we have a commercial relationship with SPAR pursuant to which we provide certain services intended to assist SPAR in developing products and improving its operational processes. We entered into these transactions based on our expectation that our investment and commercial relationship with SPAR could generate a positive return and contribute to the growth of our business over time. There can be no assurance that these expectations will be realized.
Risks Related to Our Equity Investment. Our investment in SPAR is subject to risks associated with an equity investment in a publicly traded company, including fluctuations in the market price and liquidity of SPAR’s common stock and risks relating to SPAR’s business, financial condition and results of operations, many of which are outside our control. SPAR may not successfully execute its business strategy or may otherwise perform differently than we anticipated when making our investment. As a result, the value of our investment could decline, potentially significantly, which could adversely affect our results of operations and financial condition.
Although we beneficially own a significant minority interest in SPAR, we do not control SPAR or its board of directors or management. Accordingly, SPAR may make strategic, operational, financing or capital allocation decisions with which we disagree or that adversely affect the value of our investment. Our ability to dispose of some or all of our SPAR shares also may be limited by the trading liquidity of SPAR’s common stock, applicable securities laws and regulations, contractual restrictions, if any, and prevailing market conditions. Consequently, we may be unable to realize the value of our investment at the time or on the terms we desire.
Our increased ownership interest also may affect the accounting treatment of our investment. As a result of the increase in our ownership interest, we are evaluating whether we have the ability to exercise significant influence over SPAR and, therefore, whether our investment should be accounted for under the equity method of accounting. If we determine that we have the ability to exercise significant influence over SPAR, we would be required to account for our investment under the equity method from the date such significant influence is determined to have arisen. Under the equity method, our results of operations would include our proportionate share of SPAR’s earnings or losses, subject to applicable accounting adjustments, regardless of whether SPAR distributes cash to us. A change from fair value accounting to the equity method could materially affect the manner in which SPAR’s operating performance and our investment are reflected in our financial statements and could increase the volatility or complexity of our reported financial results.
Risks Related to the Note Issued in Connection with Our Investment. Our obligation to make principal and interest payments under the Note is independent of the performance or value of our investment in SPAR and the success of our commercial relationship with SPAR. Accordingly, even if the value of our SPAR investment declines, the investment becomes less liquid, or our commercial relationship with SPAR does not generate the anticipated benefits, we will remain obligated to make payments under the Note when due. The Note contains customary events of default and provides for acceleration under certain circumstances. Required payments under the Note will reduce cash otherwise available for operations, investments, acquisitions, dividends, share repurchases or other corporate purposes. If we were unable to satisfy our obligations under the Note when due, a resulting default or acceleration could adversely affect our liquidity, financial condition and results of operations.
Risks Related to Our Commercial Relationship with SPAR. We provide services to SPAR relating to product development and improvements to certain business and operational processes. We have devoted, and expect to continue to devote, management time, personnel and other resources to this relationship. There can be no assurance that these activities will result in increased revenue, additional commercial opportunities or other benefits commensurate with the resources we devote to the relationship. The benefits we may realize from our relationship with SPAR depend in part on matters outside our control, including SPAR’s business performance, financial condition, strategic priorities, implementation of product and process improvements and continued willingness and ability to engage us to provide services. If the anticipated benefits of the relationship do not materialize, or if the scope of our relationship with SPAR is reduced or terminated, we may not realize the anticipated return on the resources devoted to the relationship, which could adversely affect our business, financial condition and results of operations.
Additional Risks Arising from Our Relationship with SPAR. Our position as both a significant shareholder of SPAR and a commercial counterparty may give rise to potential conflicts of interest in connection with transactions between us and SPAR, the negotiation of commercial arrangements, the exchange of confidential or competitively sensitive information, and the allocation of business opportunities. Transactions between us and SPAR also may be subject to heightened scrutiny because of the size of our ownership interest. Our ownership of SPAR common stock also subjects us to reporting, disclosure and other requirements under the federal securities laws applicable to significant beneficial owners. Compliance with these requirements may increase our administrative costs and may restrict the timing or manner in which we acquire or dispose of SPAR securities.
Risks Relating to Our Common Stock
Our quarterly results of operations may fluctuate in the future, which could result in volatility in the price of our Common Stock.
Our quarterly revenue and results of operations have varied in the past and may fluctuate as a result of a variety of factors. If our quarterly revenue or results of operations fluctuate, the price of our Common Stock could decline substantially. Fluctuations in our results of operations may be due to several factors, including, but not limited to, those listed and identified throughout this “Risk Factors” section.
The limited public market for our Common Stock may adversely affect an investor’s ability to liquidate an investment in us.
Although our Common Stock is currently listed and traded on the New York Stock Exchange (the "NYSE"), there is limited trading activity. We can give no assurance that an active market will develop, or if developed, that it will be sustained. If an investor acquires shares of our Common Stock, the investor may not be able to liquidate such shares of our Common Stock should there be a need or desire to do so.
Future issuances of our shares may lead to future dilution in the value of our Common Stock, will lead to a reduction in shareholder voting power and may prevent a change in control.
The shares of our Common Stock may be substantially diluted due to the issuance of Common Stock in connection with funding agreements with third parties and future issuances of Common Stock and the Company’s Preferred Stock, par value $0.01 (“Preferred Stock”). Common Stock and/or Preferred Stock issuances may result in reduction of the book value or market price of outstanding shares of Common Stock. If we issue any additional shares of Common Stock or Preferred Stock, proportionate ownership of Common Stock and voting power will be reduced. Further, any new issuance of Common Stock or Preferred Stock may prevent a change in control or management.
Our officers and directors have significant control over us, which may lead to conflicts with other stockholders over corporate governance.
Our officers and directors control approximately 37% of our Common Stock. Randall K. Fields, our Chief Executive Officer, controls 31% of our Common Stock. Consequently, Mr. Fields, individually, and our officers and directors, as stockholders acting together, can significantly influence all matters requiring approval by our stockholders, including the election of directors and significant corporate transactions, such as mergers or other business combination transactions.
Our corporate charter contains authorized, unissued “blank check” Preferred Stock issuable without stockholder approval with the effect of diluting then current stockholder interests.
Our articles of incorporation currently authorize the issuance of up to 30,000,000 shares of “blank check” Preferred Stock with designations, rights, and preferences as may be determined from time to time by our Board of Directors, of which 700,000 shares are currently designated as Series B Convertible Preferred Stock (“Series B Preferred”) and 550,000 shares are designated as Series B-1 Preferred Stock (“Series B-1 Preferred”), which designation was withdrawn on December 9, 2024. As of June 30, 2026, 160,865 shares of Series B Preferred Stock were issued and outstanding.
Our Board of Directors is empowered, without stockholder approval, to issue one or more additional series of Preferred Stock with dividend, liquidation, conversion, voting, or other rights that could dilute the interest of, or impair the voting power of, holders of our Common Stock. The issuance of an additional series of Preferred Stock could be used as a method of discouraging, delaying or preventing a change in control.
Although we have recently declared quarterly cash dividends on our Common Stock, investors should consider the potential for us to terminate the payment of dividends as a factor when determining whether to invest in us.
We commenced paying quarterly dividends on our Common Stock in September 2022. In the future we may elect to retain earnings, if any, to finance the development and expansion of our business. Our Board of Directors will determine our future dividend policy at their sole discretion, and future dividends will be contingent upon future earnings, if any, obligations of the stock issued, our financial condition, capital requirements, general business conditions and other factors. Future dividends may also be affected by covenants contained in loan or other financing documents, which we may execute in the future. Therefore, there can be no assurance that quarterly dividends will continue to be paid on our Common Stock.
Our officers and directors have limited liability and indemnification rights under our organizational documents, which may impact our results.
Our officers and directors are required to exercise good faith and high integrity in the management of our affairs. Our articles of incorporation and bylaws, however, provide that the officers and directors shall have no liability to the stockholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated their duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend or stock repurchase or derived an improper benefit from the transaction. As a result, an investor may have a more limited right to action than they would have had if such a provision were not present. Our articles of incorporation and bylaws also require us to indemnify our officers and directors against any losses or liabilities they may incur as a result of the manner in which they operate our business or conduct our internal affairs, provided that the officers and directors reasonably believe such actions to be in, or not opposed to, our best interests, and their conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations.
| UNRESOLVED STAFF COMMENTS |
None.
| CYBERSECURITY |
Risk Management and Strategy
.
Governance
.
| ITEM 2. | PROPERTIES |
Our principal place of business operations is located at 5282 South Commerce Drive, Suite D292, Murray, Utah 84107. We lease approximately 5,000 square feet at this corporate office location, consisting primarily of office space, conference rooms and storage areas. Our telephone number is (435) 645-2000. Our website address is http://www.repositrak.com.
| ITEM 3. | LEGAL PROCEEDINGS |
We are, from time to time, involved in various legal proceedings incidental to the conduct of our business. Historically, the outcome of all such legal proceedings has not, in the aggregate, had a material adverse effect on our business, financial condition, results of operations or liquidity. There are no pending or threatened material legal proceedings at this time.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Share Price History
Our Common Stock is listed and traded on the New York Stock Exchange (“NYSE”) under the trading symbol “TRAK”. The following table sets forth the high and low sales prices of our Common Stock for the periods indicated:
| Quarterly Common Stock Price Ranges |
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| 2026 |
2025 |
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| Fiscal Quarter Ended |
High |
Low |
High |
Low |
||||||||||||
| September 30 |
$ | 20.15 | $ | 13.87 | $ | 21.56 | $ | 15.12 | ||||||||
| December 31 |
$ | 16.11 | $ | 11.98 | $ | 25.01 | $ | 17.56 | ||||||||
| March 31 |
$ | 12.48 | $ | 6.94 | $ | 22.73 | $ | 18.50 | ||||||||
| June 30 |
$ | 10.68 | $ | 6.95 | $ | 23.72 | $ | 15.72 | ||||||||
Dividends
Outstanding shares of Series B Preferred accrue dividends at the rate per share of 7% per annum if paid by the Company in cash, or 9% per annum if paid by the Company by the issuance of additional shares of Series B Preferred. Dividends on the Series B Preferred are payable quarterly.
During fiscal 2026, the Company's quarterly cash dividend rate was increased to $0.02 per share ($0.08 annually), beginning with the dividend payable to shareholders of record as of September 30, 2025. On June 18, 2026, the Board of Directors declared a quarterly cash dividend of $0.02 per share payable to shareholders of record on June 30, 2026, which was paid on or about August 14, 2026. The declaration and payment of future dividends are subject to the discretion of our Board of Directors and will depend upon a number of factors, including our financial condition, results of operations, capital requirements, statutory and regulatory limitations, tax considerations and general economic conditions. Accordingly, there can be no assurance that dividends will continue at the current rate or at all.
Holders of Record
At June 30, 2026, there were 599 holders of record of our Common Stock with 18,189,408 shares issued and outstanding and 3 holders of Series B Preferred with 160,865 shares issued and outstanding. The number of holders of record and shares of Common Stock issued and outstanding was calculated by reference to the books and records of the Company’s transfer agent.
Common Stock Share Repurchase Program
On May 9, 2019, our Board of Directors approved the repurchase of up to $4.0 million in shares of our Common Stock, which repurchases may be made in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices (the “Share Repurchase Program”). Under the Share Repurchase Program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable laws and regulations, including Rule 10b-18 of the Exchange Act.
On March 17, 2020, the Board, given the extreme uncertainty due to COVID-19 at the time, suspended the Share Repurchase Program. On May 18, 2021, our Board of Directors resumed its Share Repurchase Program, and increased the number of shares of Common Stock available to repurchase under the Share Repurchase Program by an additional $4 million. On August 31, 2021, our Board of Directors approved a further increase by an additional $4.0 million. On May 10, 2022, our Board of Directors approved a further increase of $9.0 million, resulting in a total approved for repurchase through the Share Repurchase Program of $21.0 million in shares of Common Stock as of June 30, 2026.
Since inception of the Share Repurchase Program through June 30, 2026, 2,275,288 shares of Common Stock have been repurchased at an average purchase price of $6.60, and $5,993,636 remains available to repurchase under the current Share Repurchase Program as of June 30, 2026. From time-to-time, our Board of Directors may authorize further increases to our Share Repurchase Program. The Share Repurchase Program may also be further suspended for periods of time or discontinued at any time, at the Board’s discretion.
The following table provides information about repurchases of our Common Stock registered pursuant to Section 12 of the Exchange Act, during the years ended June 30, 2026 and 2025:
| Remaining |
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| Amount |
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| Available for |
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| Dollars |
Future |
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| Total |
Expended |
Share |
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| Number |
by Period |
Repurchases |
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| of Shares |
Average |
Under the |
Under the |
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| Purchased |
Price Paid |
Plans or |
Plans or |
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| Period (1) |
by Period |
Per Share |
Programs |
Programs |
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| Year Ended June 30, 2025: |
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| 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 | |||||||||
| Year Ended June 30, 2026: |
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| July 1, 2025 – September 30, 2025 |
8,715 | $ | 17.21 | $ | 149,985 | $ | 7,642,188 | |||||||||
| October 1, 2025 – December 31, 2025 |
79,927 | $ | 13.75 | $ | 1,098,608 | $ | 6,543,580 | |||||||||
| January 1, 2026 – March 31, 2026 |
55,262 | $ | 9.95 | $ | 549,944 | $ | 5,993,636 | |||||||||
| April 1, 2026 – June 30, 2026 |
- | $ | - | $ | - | $ | 5,993,636 | |||||||||
| (1) |
We close our books and records on the last calendar day of each month to align our financial closing with our business processes. |
| ITEM 6. |
[Reserved] |
| ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following Management’s Discussion and Analysis is intended to assist the reader in understanding our results of operations and financial condition. Management’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements beginning on page F-1 of this Annual Report on Form 10-K (this "Annual Report"). This Annual Report includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). All statements, other than statements of historical fact, included in this Annual Report that address activities, events or developments that we expect, project, believe, or anticipate will or may occur in the future, including matters having to do with expected and future revenue, our ability to fund our operations and repay debt, business strategies, expansion and growth of operations and other such matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. These statements are subject to a number of assumptions, risks and uncertainties, including general economic and business conditions, the business opportunities (or lack thereof) that may be presented to and pursued by us, our performance on our current contracts and our success in obtaining new contracts, our ability to attract and retain qualified employees, and other factors, many of which are beyond our control. You are cautioned that these forward-looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in such statements.
Overview
ReposiTrak, Inc. is a SaaS which operates a B2B e-commerce, compliance & traceability, and supply chain management platform that partners with retailers, wholesalers, distributors and their product suppliers to (a) help them manage specific programs, such as out-of-stock management and scan-based trading; (b) reduce risk in their supply chain by managing compliance documents and data; ensure compliance with new regulatory requirements supporting traceability; and (c) improve product ordering and forecasting in order to accelerate sales, control risks, and improve supply chain efficiencies. The Company’s fiscal year ends on June 30. References to fiscal 2026 refer to the fiscal year ended June 30, 2026, and references to fiscal 2025 refer to the fiscal year ended June 30, 2025.
Sources of Revenue
The principal customers for the Company’s products are multi-store retail chains, wholesalers and distributors, and their suppliers. The Company has a hub and spoke business model, whereby the Company is typically engaged by Hubs, which in turn require their Spokes to utilize the Company’s services.
The Company’s software and services are designed to address the business problems faced by our customers. These solutions are delivered via a cloud-based infrastructure and grouped in three product application suites that mirror the workflow of the Company’s customers as they manage the activities of their supply chain.
The Company’s services are grouped in three application suites:
| 1. |
ReposiTrak Compliance Management (“Compliance”) solutions, which help the Company’s customers vet suppliers and reduce a company’s potential regulatory, legal, and criminal risk from its supply chain partners by providing a way for them to ensure these suppliers are compliant with food safety regulations, such as the Food Safety Modernization Act of 2011 (“FSMA”); |
|
| 2. |
ReposiTrak Traceability Network (“Traceability” or “RTN”), which helps the Company’s customers comply with federal regulatory requirements of traceability and is designed to provide a scalable, cost-effective approach to capturing and sharing key data elements (“KDEs”) now required by Section 204(d) of FSMA 2011 as designated products move through the supply chain at each ‘event’ known as a ‘critical tracking event’ or “CTE”, which includes tracking from farm to shelf; and |
|
| 3. |
ReposiTrak Supply Chain Solutions (“Supply Chain”), which help the Company’s customers to more efficiently manage various interactions with their suppliers. In other words, it provides customers with greater flexibility in sourcing products by enabling them to choose new suppliers and integrate them into their supply chain faster and more cost effectively, and it helps them to manage these relationships more efficiently, enhancing revenue while lowering working capital, labor costs and reducing waste. |
The Company derives revenue from five sources: (i) subscription fees, (ii) transaction-based fees, (iii) professional services fees, (iv) license fees, and (v) hosting and maintenance fees.
A significant portion of the Company’s revenue is generated from its Compliance and Supply Chain Food Safety solutions, with a growing portion of the revenue derived from its newest Traceability solution. The revenue generated is primarily in the form of a recurring subscription payment from the suppliers. Subscription fees can be based on a negotiated flat fee per supplier, or some volumetric metric, such as the number of stores, or the volume of economic activity between a retailer and its suppliers. Subscription revenue contains arrangements with customers for use of the application, application and data hosting, maintenance of the application, and standard support.
The Company also provides professional consulting services targeting implementation, assessments, profit optimization and support functions for its applications and related products, for which revenue is recognized over time using an appropriate measure of progress, including the output method, depending on the nature of the engagement. Premier customer support includes extended availability and additional services and is available along with additional support services such as developer support and partner support for an additional fee.
In rare instances, the Company may sell its software in the form of a license. License arrangements may be term-based or perpetual. Software license maintenance agreements are typically annual contracts, paid in advance or according to terms specified in the contract. When sold as a license, the Company’s software is usually accompanied by a corresponding maintenance and/or hosting agreement to support the service.
Software maintenance agreements provide the customer with access to new software enhancements, maintenance releases, patches, updates and technical support personnel. Our hosting services provide remote management and maintenance of our software and customers’ data, which is physically located in third-party facilities. Customers access “hosted” software and data through a secure internet connection.
Critical Accounting Estimates
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” discusses the Company’s financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expense during the reporting period.
On an ongoing basis, management evaluates its estimates and assumptions based on historical experience of operations and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Income Taxes
In determining the carrying value of the Company’s net deferred income tax assets, the Company must assess the likelihood of sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions, to realize the benefit of these assets. If these estimates and assumptions change in the future, the Company may record a reduction in the valuation allowance, resulting in an income tax benefit in the Company’s statements of operations. Management evaluates quarterly whether to realize the deferred income tax assets and assesses the valuation allowance.
Goodwill and Other Long-Lived Asset Valuations
Goodwill is assigned to specific reporting units and is reviewed for possible impairment at least annually or upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. Management reviews the long-lived tangible and intangible assets for impairment when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Management evaluates, at each balance sheet date, whether events and circumstances have occurred which indicate possible impairment.
The carrying value of a long-lived asset is considered impaired when the anticipated cumulative undiscounted cash flows of the related asset or group of assets is less than the carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the estimated fair market value of the long-lived asset. Economic useful lives of long-lived assets are assessed and adjusted as circumstances dictate.
Stock-Based Compensation
The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. The Company records compensation expense on a straight-line basis. The fair value of any options granted are estimated at the date of grant using a Black-Scholes option pricing model with assumptions for the risk-free interest rate, expected life, volatility, dividend yield and forfeiture rate.
Capitalization of Software Development Costs
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established.
We have determined that technological feasibility for our software products is reached shortly after a working prototype is complete and meets or exceeds design specifications including functions, features, and technical performance requirements. Costs incurred after technological feasibility is established have been and will continue to be capitalized until such time as when the product or enhancement is available for general release to customers.
Available-for-Sale Debt Investments
We classify our investments in fixed income securities as available-for-sale debt investments. Our available-for-sale debt investments primarily consist of U.S. government, U.S. government agency, non-U.S. government and agency, corporate debt, U.S. agency mortgage-backed securities, commercial paper and certificates of deposit. These available-for-sale debt investments are primarily held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debt investments sold. These investments are recorded in the Consolidated Balance Sheets at fair value. Unrealized gains and losses on these investments are included as a separate component of accumulated other comprehensive income (“AOCI”). We classify our investments as current based on the nature of the investments and their availability for use in current operations.
Impairment Consideration of Investments
For our available-for-sale debt securities in an unrealized loss position, we determine whether a temporary or permanent credit loss exists. In this assessment, which requires judgment, among other factors, we consider the extent to which the fair value is less than the amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security. If factors indicate a permanent credit loss exists, an allowance for credit loss is recorded to other income (loss), net, limited by the amount that the fair value is less than the amortized cost basis. The amount of fair value change relating to all other factors will be recognized in other comprehensive income (“OCI”).
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenue and results of operation, liquidity or capital expenditures.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09 (ASC Topic 740), Improvements to Income Tax Disclosures, which requires incremental income tax disclosures that increase the transparency and usefulness of income tax disclosures. The updated disclosures primarily require specific categories and greater disaggregation within the rate reconciliation, disaggregation of income taxes paid, and modifications of other income tax-related disclosures. The Company adopted this guidance prospectively effective July 1, 2025. The adoption impacted the presentation and disclosure of income taxes but did not have a material impact on the Company’s financial statements.
In November 2024, the FASB issued ASU 2024-03 (ASC Subtopic 220-40), Disaggregation of Income Statement Expenses. The Company is required to disclose, in the notes to the financial statements, specified information about certain costs and expenses. The Company is required to adopt this guidance for its annual reporting in fiscal year 2028, and for interim period reporting beginning the first quarter of fiscal year 2029 on either a prospective or retrospective basis. Early adoption is permitted. This standard is expected to impact the Company's disclosures and will not have an impact on its Consolidated Financial Statements.
Results of Operations – Fiscal Years Ended June 30, 2026 and 2025
Revenue
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Revenue |
$ | 23,287,319 | $ | 681,253 | 3 | % | $ | 22,606,066 | ||||||||
During the fiscal year ended June 30, 2026, the Company generated revenue of $23.3 million, compared with $22.6 million for the fiscal year ended June 30, 2025, representing an increase of approximately 3%. The increase in revenue was primarily attributable to growth in recurring subscription revenue across the Company’s compliance, supply chain and traceability solutions.
Demand for the Company’s subscription-based services continues to be influenced by increased regulatory requirements, food safety and traceability initiatives, and greater demand for transparency throughout the food supply chain. These factors have increased the compliance, documentation and traceability requirements applicable to grocery retailers, wholesalers, distributors and their suppliers. As adoption of these requirements has expanded, the Company has experienced increased demand for its compliance and traceability services.
The Company continues to focus its sales and marketing efforts on recurring subscription-based software services while placing less emphasis on non-recurring transactional revenue. Certain customers may, from time to time, elect to purchase specific services or licenses on a non-recurring basis. Accordingly, the Company expects that a portion of its revenue may continue to be derived from non-recurring transactions; however, its strategy remains focused on increasing recurring subscription revenue.
Cost of Services and Product Support
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Cost of service and product support |
$ | 3,306,855 | $ | (374,475 | ) | -10 | % | $ | 3,681,330 | |||||||
| Percent of total revenue |
14 | % | 16 | % | ||||||||||||
Cost of services and product support was $3.3 million, or 14% of total revenue, for the fiscal year ended June 30, 2026, compared with $3.7 million, or 16% of total revenue, for the fiscal year ended June 30, 2025, representing a decrease of approximately 10%. The decrease was primarily attributable to the capitalization of certain qualifying software development costs that otherwise would have been recognized as expense during the period. This decrease was partially offset by increased cybersecurity costs and higher offshore development costs associated with the Company’s Traceability initiative.
Sales and Marketing Expense
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Sales and marketing |
$ | 5,751,151 | $ | (92,121 | ) | -2 | % | $ | 5,843,272 | |||||||
| Percent of total revenue |
25 | % | 26 | % | ||||||||||||
Sales and marketing expense was $5.8 million, or 25% of total revenue, for the fiscal year ended June 30, 2026, compared with $5.8 million, or 26% of total revenue, for the fiscal year ended June 30, 2025, representing a decrease of approximately 2%. The decrease was primarily attributable to lower personnel costs resulting from a reduction in marketing staff and lower trade show expenses. The Company also continued to utilize artificial intelligence and other technology-enabled tools to enhance the efficiency and targeting of its sales and marketing activities.
General and Administrative Expense
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| General and administrative |
$ | 5,738,314 | $ | 135,507 | 2 | % | $ | 5,602,807 | ||||||||
| Percent of total revenue |
25 | % | 25 | % | ||||||||||||
General and administrative expense was $5.7 million, or 25% of total revenue, for the fiscal year ended June 30, 2026, compared with $5.6 million, or 25% of total revenue, for the fiscal year ended June 30, 2025, representing an increase of approximately 2%. The increase was primarily attributable to higher personnel-related costs, including stock-based compensation and employee benefit costs, as well as increased liability insurance premiums, bad debt expense and travel-related costs.
Depreciation and Amortization Expense
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Depreciation and amortization |
$ | 647,637 | $ | (603,877 | ) | -48 | % | $ | 1,251,514 | |||||||
| Percent of total revenue |
3 | % | 6 | % | ||||||||||||
The Company’s depreciation and amortization expense was $647,637 and $1,251,514 for the years ended June 30, 2026 and 2025, respectively, a decrease of 48%. The decrease was primarily attributable to lower depreciation and amortization as certain existing property, software and acquired intangible assets became fully depreciated or amortized.
Other Income and Expense
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Net other income |
$ | 1,676,124 | $ | 249,290 | 17 | % | $ | 1,426,834 | ||||||||
| Percent of total revenue |
7 | % | 6 | % | ||||||||||||
Net other income was $1,676,124 for the fiscal year ended June 30, 2026, compared with $1,426,834 for the fiscal year ended June 30, 2025, representing an increase of $249,290, or approximately 17%. The increase was primarily attributable to higher interest income and a favorable year-over-year change in unrealized gains on investments, partially offset by lower realized gains on investments. Interest income may fluctuate in future periods based on changes in market interest rates and the amount of cash and investments held by the Company.
Preferred Dividends
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Preferred dividends |
$ | 167,804 | $ | (192,502 | ) | -53 | % | $ | 360,306 | |||||||
| Percent of total revenue |
1 | % | 2 | % | ||||||||||||
Dividends accrued on the Company’s Series B Preferred Stock and Series B-1 Preferred Stock were $167,804 and $360,306 for the fiscal years ended June 30, 2026 and 2025, respectively, representing a decrease of approximately 53%. The decrease was primarily attributable to the redemption and retirement of shares of Preferred Stock during fiscal 2026.
Since inception of the redemption program, the Company has redeemed and retired an aggregate of 676,912 shares of Series B Preferred Stock and Series B-1 Preferred Stock at a redemption price of $10.70 per share, for total consideration of approximately $7.2 million. As of June 30, 2026, approximately $1.7 million of Preferred Stock remained outstanding and subject to redemption. The Company currently intends to redeem the remaining outstanding Preferred Stock on or before December 31, 2026, subject to the availability of sufficient cash and other applicable considerations.
Financial Position, Liquidity and Capital Resources
We believe that our existing cash and short-term investments, together with cash expected to be generated from operations, will be sufficient to meet our anticipated operating, investing and other cash requirements for at least the next twelve months.
Our future capital requirements will depend on a number of factors, including general macroeconomic conditions, our rate of revenue growth, sales and marketing activities, investments in research and development, capital expenditures, strategic investments, including our investment in SPAR Group, Inc., and other uses of capital, and continued market acceptance of our products and services.
| As of |
Variance |
|||||||||||||||
| June 30, 2026 |
June 30, 2025 |
Dollars |
Percent |
|||||||||||||
| Cash and cash equivalents |
$ | 27,256,008 | $ | 28,568,805 | $ | (1,312,797 | ) | (5 | )% | |||||||
Historically, the Company has funded its operations through cash generated from operations, equity financings and borrowings under a revolving credit facility with U.S. Bank N.A. In March 2024, the Company terminated its revolving credit facility and currently has no outstanding borrowings under a credit facility.
Cash and cash equivalents were $27.3 million as of June 30, 2026, compared with $28.6 million as of June 30, 2025, representing a decrease of $1.3 million, or approximately 5%. During fiscal 2026, operating activities provided $8.2 million of cash, while investing activities used $4.1 million and financing activities used $5.4 million of cash.
Net Cash Flows from Operating Activities
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Cash provided by operating activities |
$ | 8,224,806 | $ | (195,326 | ) | -2 | % | $ | 8,420,132 | |||||||
Net cash provided by operating activities is summarized as follows:
| Year Ended |
Year Ended |
|||||||
| June 30, 2026 |
June 30, 2025 |
|||||||
| Net income |
$ | 7,569,487 | $ | 6,978,127 | ||||
| Noncash expense and income, net |
(666,049 | ) | 2,306,632 | |||||
| Net changes in operating assets and liabilities |
1,321,368 | (864,627 | ) | |||||
| $ | 8,224,806 | $ | 8,420,132 | |||||
Net cash provided by operating activities was $8.2 million for fiscal 2026, compared with $8.4 million for fiscal 2025, representing a decrease of approximately $0.2 million. The year-over-year change primarily reflected an approximately $3.0 million decrease in noncash adjustments to net income, partially offset by a $0.6 million increase in net income and an approximately $2.2 million favorable change in operating assets and liabilities. The decrease in noncash adjustments primarily reflected $2.3 million of common stock received in settlement of accounts receivable and lower depreciation and amortization expense, partially offset by higher bad debt expense.
Net Cash Flows Used in Investing Activities
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Cash (used in) provided by investing activities |
$ | (4,117,006 | ) | $ | 4,117,175 | NM | $ | 169 | ||||||||
Net cash used in investing activities was $4.1 million for fiscal 2026, compared with nominal net cash provided by investing activities in fiscal 2025. The increase in cash used in investing activities was primarily attributable to $3.0 million advanced under the SPAR note receivable and approximately $1.0 million of capitalized software development costs.
Net Cash Flows from Financing Activities
| Year Ended |
$ |
% |
Year Ended |
|||||||||||||
| June 30, 2026 |
Change |
Change |
June 30, 2025 |
|||||||||||||
| Cash used in financing activities |
$ | (5,420,597 | ) | $ | 415,239 | 8 | % | $ | (5,005,358 | ) | ||||||
Net cash used in financing activities was $5.4 million for fiscal 2026, compared with $5.0 million for fiscal 2025. The increase in cash used in financing activities was primarily attributable to higher repurchases of the Company’s common stock, partially offset by lower redemptions of Preferred Stock and lower payments on notes payable and finance lease obligations.
Liquidity and Working Capital
At June 30, 2026, the Company had working capital of $24.2 million, compared with $28.2 million at June 30, 2025, representing a decrease of approximately $3.9 million. The decrease was attributable to a $0.9 million decrease in current assets and a $3.0 million increase in current liabilities. The decrease also partially reflected our investment in SPAR Group, Inc. during the quarter ended June 30, 2026, described below.
The decrease in current assets primarily reflected a $1.3 million decrease in cash and cash equivalents and a $0.1 million decrease in prepaid expenses and other current assets, partially offset by a $0.5 million increase in accounts receivable. The increase in current liabilities primarily reflected increases of approximately $1.4 million in accrued liabilities, $1.3 million in deferred revenue and $0.2 million in accounts payable.
| As of |
As of |
Variance |
||||||||||||||
| June 30, 2026 |
June 30, 2025 |
Dollars |
Percent |
|||||||||||||
| Current assets |
$ | 32,752,828 | $ | 33,685,800 | $ | (932,972 | ) | -3 | % | |||||||
Current assets totaled $32,752,828 as of June 30, 2026, as compared to $33,685,800 as of June 30, 2025. The decrease in current assets is primarily attributable to the decrease in cash, and prepaid expense and other current assets partially offset by an increase in accounts receivable.
| As of |
As of |
Variance |
||||||||||||||
| June 30, 2026 |
June 30, 2025 |
Change |
Percent |
|||||||||||||
| Current liabilities |
$ | 8,505,379 | $ | 5,531,118 | $ | 2,974,261 | 54 | % | ||||||||
| Current ratio |
3.85 | 6.09 | (2.24 | ) | -37 | % | ||||||||||
Current liabilities were $8.5 million as of June 30, 2026, compared with $5.5 million as of June 30, 2025. The increase was primarily attributable to higher deferred revenue and accrued liabilities, partially offset by a decrease in operating lease liabilities following the termination of the Company’s operating lease in March 2025.
The Company previously maintained a revolving credit facility with U.S. Bank N.A. On March 15, 2024, the Company elected not to renew the facility. No amounts were outstanding under the facility at the time of termination. As of June 30, 2026, the Company had no outstanding bank debt and no borrowing availability under the former credit facility.
The Company expects that cash generated from operations, together with its existing cash and short-term investments, will be used to fund its operating requirements and other anticipated uses of capital. Significant anticipated uses of cash include the following:
Quarterly Cash Dividends. The Company has paid quarterly cash dividends since fiscal 2023. In June 2025, the Board of Directors approved an increase in the quarterly cash dividend to $0.02 per share, or $0.08 per share on an annualized basis, beginning with the dividend payable with respect to the quarter ended September 30, 2025. The declaration and payment of future dividends are subject to the discretion of the Board of Directors and will depend on, among other factors, the Company’s financial condition, results of operations, cash requirements and other factors deemed relevant by the Board.
Preferred Stock Redemptions. Since inception of the Company’s preferred stock redemption program, the Company has redeemed an aggregate of 676,912 shares of Series B Preferred Stock and Series B-1 Preferred Stock at a redemption price of $10.70 per share, for total consideration of approximately $7.2 million. The Series B-1 Preferred Stock was fully redeemed during fiscal 2024. As of June 30, 2026, approximately $1.7 million of Series B Preferred Stock remained outstanding and subject to redemption.
SPAR Group Transactions
On March 17, 2026, the Company, through its subsidiary PC Group Inc., entered into a financing arrangement with SPAR Marketing Force, Inc. providing up to $4.0 million of funding, of which $3.0 million has been advanced. The arrangement provides for interest income at 8.0% and includes additional return components in the form of equity consideration and contingent price protection provisions. These features may increase the effective yield on the loan but also introduce variability in expected returns and earnings due to potential fair value adjustments and contingent cash flows. As a result, the Company's future results of operations may be impacted by changes in the market price of SPAR Group, Inc. common stock and the timing and issuance of equity consideration.
On March 29, 2026, the Company entered into an amendment (the “Amendment”) to that certain Services Agreement dated March 13, 2026 (the “Agreement”) by and between the Company and SPAR Group, Inc. (the “Client”), which Agreement was entered into in the ordinary course of business. Under the terms of the Agreement, the Company agreed to provide certain services the (“Services”) to the Client for a one-year term beginning March 13, 2026. In accordance with the terms of the Agreement, the Client was to pay the Company in cash for the Services provided thereunder.
Under the terms of the Amendment, the Company can elect to receive payment for the Services in cash, shares of common stock, par value $0.01 per share, of the Client (“Client Stock”), or a combination thereof. Any issuance of Client Stock pursuant to the Amendment shall be valued based upon the volume weighted average price (“VWAP”) of Client Stock for the five (5) trading days immediately preceding the applicable issuance date.
On May 29, 2026, the Company elected to receive payment of an outstanding balance owed to the Company under an amendment (the “Amendment”) to that certain Services Agreement dated March 13, 2026 (the “Agreement”) by and between the Company and SPAR Group, Inc. (the “Client”) in shares of common stock, par value $0.01 per share, of the Client (“Client Stock”), resulting in the issuance by Client to the Company of 3,190,569 shares of Client Stock at a deemed value of $0.728710119 per share, in consideration of the payment of $2,325,000 otherwise payable to the Company under the terms of the Agreement.
On July 1, 2026 (the “Closing Date”), the Company entered into Stock Purchase Agreements with William Bartels (“Bartels”) and WHB Services, Inc. Incentive Savings Plan and Trust (“WHB”) (together, the “Agreements”). Under the terms of the Agreements, on the Closing Date, the Company is to be issued an aggregate of 4,709,837 shares of common stock (the “SPAR Shares”) of Client. Aggregate contingent consideration due under the Agreements on the Closing Date by the Company for the SPAR Shares is approximately $3.3 million consisting of (i) a previously paid non-refundable deposit of $100,000 (the “Deposit”); (ii) $139,883 to be paid upon delivery to the Company of the SPAR Shares held by William Bartels; (iii), $485,118 to be paid upon delivery to the Company of the SPAR shares held by WHB; and (iv) the issuance of an unsecured promissory note in the principal amount of $2,571,885 (the “Note”). The Note bears interest at 6.0% per annum and matures on the fourth anniversary of its issuance. Principal is payable in annual cash installments of $725,000, together with all accrued and unpaid interest, on each of the first three anniversaries of the Note, with the remaining outstanding principal and accrued interest due at maturity on July 1, 2030. The Note may be prepaid at any time without premium or penalty and contains customary events of default, including payment defaults and bankruptcy events. Upon an event of default, the holder may accelerate all outstanding amounts due under the Note. The Note also provides for automatic acceleration upon certain change-of-control transactions involving the Company or upon the sale of substantially all of the Company’s assets. In addition, amounts remaining outstanding become payable to the seller’s designated heirs or beneficiaries within sixty (60) days following the seller’s death.
The Company is currently evaluating the accounting treatment of these features, including potential derivative accounting. The ultimate impact on earnings may vary based on future equity pricing and market conditions. The loan is unsecured, and the Company is exposed to credit risk associated with the Borrower's financial condition.
Contractual Obligations
Total contractual obligations and commercial commitments as of June 30, 2026 are summarized in the following table:
| Financing Leases |
||||
| Less than 1Year |
$ | 243,460 | ||
| 1-3 Years |
62,131 | |||
| Total lease payments |
305,591 | |||
| Less imputed interest |
(11,251 | ) | ||
| Total |
$ | 294,340 | ||
Inflation
The impact of inflation has historically not had a material effect on the Company’s financial condition or results from operations; however, higher rates of inflation may cause retailers to slow their spending in the technology area, which could have an impact on the Company’s sales.
| ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Each of our contracts require payment in U.S. dollars. We therefore do not engage in hedging transactions to reduce our exposure to changes in currency exchange rates, although in the event any future contracts are denominated in a foreign currency, we may do so in the future. As a result, our financial results are not affected by factors such as changes in foreign currency exchange rates.
| ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
The information required hereunder in this Annual Report is set forth in the financial statements and the notes thereto beginning on Page F-1.
| ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
| ITEM 9A. |
CONTROLS AND PROCEDURES |
| (a) |
Evaluation of Disclosure Controls and Procedures. |
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2026. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, including to ensure that information required to be disclosed by the Company is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
| (b) |
Management’s Annual Report on Internal Control over Financial Reporting. |
We are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With our participation, an evaluation of the effectiveness of our internal control over financial reporting was conducted as of June 30, 2026, based on the framework and criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of June 30, 2026.
| (c) |
Changes in Internal Controls over Financial Reporting. |
Our Chief Executive Officer and Chief Financial Officer have determined that there has been no change in the Company’s internal control over financial reporting during the period covered by this report identified in connection with the evaluation described in the above paragraph that have materially affected, or are reasonably likely to materially affect, Company’s internal control over financial reporting.
| ITEM 9B. | OTHER INFORMATION |
| ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
Not applicable.
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
The required by this item will be incorporated by reference from ReposiTrak, Inc.’s definitive proxy statement, to be filed with the Securities and Exchange Commission on or before October 28, 2026 (the “Proxy Statement”).
| ITEM 11. | EXECUTIVE COMPENSATION |
The required by this item will be incorporated by reference from ReposiTrak, Inc.’s Proxy Statement.
| ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The information required by this item will be incorporated by reference from ReposiTrak, Inc.’s Proxy Statement.
| ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The information required by this item will be incorporated by reference from ReposiTrak, Inc.’s Proxy Statement.
| ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES |
The information required by this item will be incorporated by reference from ReposiTrak, Inc.’s Proxy Statement.
| ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
Exhibits, Financial Statements and Schedules
| Exhibit Number |
Description |
|
| 2.1 | Agreement and Plan of Merger by and between ReposiTrak, Inc. and Park City Group, Inc. d/b/a ReposiTrak (Incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K dated December 18, 2023). | |
| Articles of Incorporation (Incorporated by reference from the Company’s Definitive Proxy Statement on Schedule 14C dated June 5, 2002). |
||
| Certificate of Amendment (Incorporated by reference from Exhibit 3.3 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended Sept 30, 2005, dated November 10, 2005). |
||
| Certificate of Amendment (Incorporated by reference from Exhibit 3.4 to the Company’s Annual Report on Form 10-KSB for the year ended June 30, 2006, dated September 29, 2006). |
||
| Certificate of Amendment (Incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K dated July 28, 2017). |
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| Amended and Restated Bylaws (Incorporated by reference from Exhibit 3.1 the Company’s Current Report on Form 8-K dated October 21, 2016). |
| 3.6 | Articles of Merger filed with the Nevada Secretary of State (Incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 18, 2023). | |
| Certificate of Designation of the Series B Convertible Preferred Stock (Incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K dated July 21, 2010). |
||
| Fourth Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred Stock of Park City Group, Inc. (Incorporated by reference from Exhibit 4.1 the Company’s Current Report on Form 8-K dated January 14, 2016). |
||
| First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock of Park City Group, Inc. (Incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K dated January 14, 2016). |
||
| 4.4 | Certificate of Withdrawal of Designation of Series B-1 Preferred Stock (Incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K dated December 10, 2024). | |
| Second Amended and Restated 2011 Stock Incentive Plan, dated April 1, 2013 (Incorporated by reference from Exhibit 10.1 to the Company’s Registration Statement on Form S-8, dated September 4, 2013). | ||
| Second Amended and Restated 2011 Employee Stock Purchase Plan, dated April 1, 2013 (Incorporated by reference from Exhibit 10.2 to the Company’s Registration Statement on Form S-8, dated September 4, 2013). | ||
| Fields Employment Agreement (Incorporated by reference from Exhibit 10.8 to the Company’s Annual Report on Form 10-K dated September 11, 2014). | ||
| Services Agreement (Incorporated by reference from the Company’s Annual Report on Form 10-K dated September 11, 2014). | ||
| Amendment No. 1 to the Employment Agreement, by and between Park City Group, Inc., Randall K. Fields and Fields Management, Inc., dated July 1, 2016 (Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated November 7, 2016). | ||
| Amendment No. 1 to the Second Amended and Restated 2011 Stock Incentive Plan of Park City Group, Inc., dated August 3, 2017 (Incorporated by reference from Exhibit 10.1 to the Company’s Registration Statement on Form S-8 dated November 9, 2017) | ||
| Amendment No. 1 to the Second Amended and Restated 2011 Employee Stock Purchase Plan of Park City Group, Inc., dated August 3, 2017 (Incorporated by reference from Exhibit 10.2 to the Company’s Registration Statement on Form S-8 dated November 9, 2017) | ||
| Amendment to Services Agreement (Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated May 10, 2018). | ||
| Amendment No. 2 to the Second Amended and Restated 2011 Employee Stock Purchase Plan of Park City Group, Inc., dated March 17, 2021 (Incorporated by reference from Exhibit 10.1 to the Company’s Registration Statement on Form S-8 dated April 12, 2021). | ||
| Amendment No. 2 to the Second Amended and Restated 2011 Employee Stock Purchase Plan of Park City Group, Inc., dated March 17, 2021 (Incorporated by reference from Exhibit 10.1 to the Company’s Registration Statement on Form S-8 dated April 12, 2021). |
| Employment Agreement by and between Park City Group, Inc. and John Merrill, dated September 6, 2022 (Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 8, 2022). |
||
| 10.12 | 2023 Omnibus Equity Incentive Plan (Incorporated by reference from Appendix A to the Company’s Definitive Proxy Statement on Schedule 14 A filed October 3, 2023). | |
| 10.13 | 2023 Employee Stock Purchase Plan (Incorporated by reference from Appendix B to the Company’s Definitive Proxy Statement on Schedule 14 A filed October 3, 2023). | |
| Senior Unsecured Promissory Note by and among SPAR Marketing Force, Inc., PC Group, Inc., and SPAR Group, Inc. (Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 20, 2026). |
||
| Stock Purchase Agreement dated July 1, 2026, by and between ReposiTrak, Inc. and William Bartels (Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 8, 2026). |
||
| Stock Purchase Agreement dated July 1, 2026, by and between ReposiTrak, Inc. and WHB Services, Inc. Incentive Savings Plan and Trust (Incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K filed on July 8, 2026). |
||
| Promissory Note dated July 1, 2026 (Incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K filed on July 8, 2026). |
||
| Employment Agreement by and between ReposiTrak, Inc. and John Merrill, dated August 18, 2026 (Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 18, 2026). |
||
| Code of Ethics and Business Conduct (Incorporated by reference from the Company’s Annual Report Form 10-KSB for the period ended June 30, 2008, dated September 29, 2008). |
||
| List of Subsidiaries (Incorporated by reference from the Company’s Annual Report on Form 10-K for the period ended June 30, 2017, dated September 13, 2017). |
||
| Consent of Haynie & Company, dated September 28, 2026* |
||
| Certification of Principal Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002 * |
||
| Certification of Principal Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002 * |
||
| Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 * |
||
| 97 | ReposiTrak, Inc. Clawback Policy* (Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended June 30, 2024, dated September 30, 2024). | |
| 101.INS |
Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document* |
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| 101.SCH |
Inline XBRL Taxonomy Extension Schema* |
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| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase* |
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| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase* |
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| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase* |
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| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase* |
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| 104 |
Cover page formatted as Inline XBRL and contained in Exhibit 101 |
| * |
Filed herewith |
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| REPOSITRAK, INC. |
|||
| (Registrant) |
|||
| Date: September 28, 2026 |
By: |
/s/ Randall K. Fields |
|
| Principal Executive Officer, |
|||
| Chair of the Board and Director |
|||
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature |
Title |
Date |
| /s/ Randall K. Fields |
Chair of the Board and Director, |
September 28, 2026 |
| Randall K. Fields |
Chief Executive Officer |
|
| (Principal Executive Officer) |
||
| /s/ John Merrill |
Chief Financial Officer |
September 28, 2026 |
| John Merrill |
(Principal Financial Officer & |
|
| Principal Accounting Officer) |
||
| /s/ Robert W. Allen |
Director, and Compensation |
September 28, 2026 |
| Robert W. Allen |
Committee Chair |
|
| /s/ James R. Gillis | Director | September 28, 2026 |
| James R. Gillis | ||
| /s/ Peter J. Larkin |
Director |
September 28, 2026 |
| Peter J. Larkin |
||
| /s/ Ronald C. Hodge |
Director, and Audit Committee Chair |
September 28, 2026 |
| Ronald C. Hodge |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of ReposiTrak, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ReposiTrak, Inc. (the Company) as of June 30, 2026, and 2025, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026, and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition – Multiple Element Arrangements
Description of the Matter:
The Company recognized approximately $23.3 million in revenue during the year ended June 30, 2026. As discussed in Note 2 to the financial statements, the Company enters into several different types of revenue arrangements that often consist of multiple performance obligations. Management must use judgment to determine the appropriate value and allocation of revenue to these performance obligations.
Auditing management’s assumptions and judgments can be complex, involves judgment, and requires a thorough understanding of the Company’s various revenue streams.
How We Addressed the Matter in Our Audit:
We obtained and reviewed documentation to support the revenue recognition criteria. We tested performance obligations by reviewing the underlying contracts, evaluating management’s determination of the method and timing of measuring revenue, and testing management’s allocation of revenue to the performance obligations. Lastly, we tested the design and operating effectiveness of internal controls over the revenue cycle as well as the Information Technology General Controls around the revenue cycle.
| September 28, 2026 PCAOB ID Number | |
| We have served as the Company’s auditor since 2016. | |
Consolidated Balance Sheets
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Receivables, net of allowance for doubtful accounts of $ and $ at June 30, 2026 and 2025, respectively | ||||||||
| Contract asset – unbilled current portion | ||||||||
| Prepaid expense and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Other Assets: | ||||||||
| Note receivable, net | ||||||||
| Investment in equity securities, at fair value | ||||||||
| Deposits and other assets | ||||||||
| Prepaid expense – less current portion | ||||||||
| Goodwill | ||||||||
| Deferred income taxes | ||||||||
| Capitalized software costs, net | ||||||||
| Capitalized software development in progress | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Contract liability – deferred revenue | ||||||||
| Notes payable and financing leases – current | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Notes payable and financing leases – less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred Stock; $ par value, shares authorized; | ||||||||
| Series B Preferred, shares authorized; and shares issued and outstanding at June 30, 2026 and 2025 respectively | ||||||||
| Common Stock, $ par value, shares authorized; and issued and outstanding at June 30, 2026 and 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
Consolidated Statements of Operations
| For the Years Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating expense: | ||||||||
| Cost of revenue and product support | ||||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expense | ||||||||
| Income from operations | ||||||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain on lease termination | ||||||||
| Realized gain (loss) on short term investments | ( | ) | ||||||
| Unrealized gain (loss) on short term investments | ( | ) | ||||||
| Income before income taxes | ||||||||
| (Provision) for income taxes | ( | ) | ( | ) | ||||
| Net income | ||||||||
| Dividends on Preferred Stock | ( | ) | ( | ) | ||||
| Net income applicable to common shareholders | $ | $ | ||||||
| Weighted average shares, basic | ||||||||
| Weighted average shares, diluted | ||||||||
| Basic earnings per share | $ | $ | ||||||
| Diluted earnings per share | $ | $ | ||||||
| Comprehensive income: | ||||||||
| Net income | $ | $ | ||||||
| Other comprehensive loss: | ||||||||
| Unrealized gain (loss) on available-for-sale securities | ( | ) | ||||||
| Total comprehensive income | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
Consolidated Statements of Stockholders’ Equity (Deficit)
| Series B | Additional | Other | ||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Total | |||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Stock issued for: | ||||||||||||||||||||||||||||||||
| Accrued compensation | - | - | ||||||||||||||||||||||||||||||
| Employee stock plan | ||||||||||||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||||||||||
| Preferred Stock Redemption | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred Dividends-Declared | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Common Stock Dividends - Declared | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock Buyback | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||
| Other comprehensive Loss | - | - | ||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Stock issued for: | ||||||||||||||||||||||||||||||||
| Accrued compensation | - | - | ||||||||||||||||||||||||||||||
| Employee stock plan | ||||||||||||||||||||||||||||||||
| Preferred Stock Redemption | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred Dividends-Declared | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Common Stock Dividends - Declared | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock Buyback | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Other comprehensive Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows
| For the Years Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of operating right of use asset | ||||||||
| Amortization of loan discount | ( | ) | ||||||
| Stock compensation expense | ||||||||
| Gain on termination of operating lease | ( | ) | ||||||
| Unrealized gain (loss) on investments | ( | ) | ||||||
| Net amortization/accretion | ( | ) | ||||||
| Realized loss on investments | ( | ) | ||||||
| Common stock received in settlement of accounts receivable | ( | ) | ||||||
| Deferred income tax benefit | ( | ) | ||||||
| Bad debt expense | ||||||||
| (Increase) decrease in: | ||||||||
| Accounts receivables | ( | ) | ( | ) | ||||
| Operating right of use asset | ||||||||
| Contract assets and unbilled receivables | ( | ) | ||||||
| Long-term receivables, prepaids and other assets | ( | ) | ||||||
| Increase (decrease) in: | ||||||||
| Accounts payable | ||||||||
| Operating lease liability | ( | ) | ||||||
| Accrued liabilities | ||||||||
| Deferred revenue | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Issuance of note receivable | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Investment deposit | ( | ) | ||||||
| Capitalization of software development costs in progress | ( | ) | ||||||
| Sale (purchase) of marketable securities | ||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Common stock buyback/retirement | ( | ) | ( | ) | ||||
| Redemption of Series B Preferred | ( | ) | ( | ) | ||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from employee stock plan | ||||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Payments on notes payable and capital leases | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for operating leases | $ | $ | ||||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||||||||
| Common Stock to pay accrued liabilities | $ | $ | ||||||
| Dividends accrued on Preferred Stock | $ | $ | ||||||
| Right of use asset | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
June 30, 2026 and June 30, 2025
| NOTE 1. | DESCRIPTION OF BUSINESS |
Overview
ReposiTrak, Inc., a Nevada corporation (“ReposiTrak”, “We”, “us”, “our” or the “Company”) is a Software-as-a-Service (“SaaS”) which operates a business-to-business (“B2B”) e-commerce, compliance & traceability, and supply chain management platform that partners with retailers, wholesalers, distributors and their product suppliers to (a) help them manage specific programs, such as out-of-stock management and scan-based trading; (b) reduce risk in their supply chain by managing compliance documents and data; ensure compliance with new regulatory requirements supporting traceability; and (c) improve product ordering and forecasting in order to accelerate sales, control risks, and improve supply chain efficiencies.
The Company’s services are grouped in three application suites:
| 1. | ReposiTrak Compliance Management (“Compliance”) solutions, which helps the Company’s customers vet suppliers and reduce a company’s potential regulatory, legal, and criminal risk from its supply chain partners by providing a way for them to ensure these suppliers are compliant with food safety regulations, such as the Food Safety Modernization Act of 2011 (“FSMA”); | |
|
| ||
| 2. | ReposiTrak Traceability Network (“Traceability” or “RTN”), which helps the Company’s customers comply with federal regulatory requirements of traceability and provides the lowest cost, easiest to use way to manage the capture and sharing of key data elements (“KDEs”) now required by Section 204(d) of FSMA 2011 as designated products move through the supply chain at each ‘event’ known as a ‘critical tracking event’ or “CTE”, which includes tracking from farm to shelf; and | |
|
| ||
| 3. | ReposiTrak Supply Chain Solutions (“Supply Chain”), which help the Company’s customers to more efficiently manage various interactions with their suppliers. In other words, it provides customers with greater flexibility in sourcing products by enabling them to choose new suppliers and integrate them into their supply chain faster and more cost effectively, and it helps them to manage these relationships more efficiently, enhancing revenue while lowering working capital, labor costs and reducing waste. |
The Company’s services are delivered through proprietary software products designed, developed, marketed and supported by the Company. These products provide visibility and facilitate improved business processes among all key constituents in the supply chain, starting with the retailer and moving backwards to suppliers and eventually to raw material providers.
The Company provides cloud-based applications and services that address e-commerce, supply chain, food safety, compliance and traceability activities. The principal customers for the Company’s products are household name multi-store food retail chains and restaurants including their suppliers, branded food manufacturers, food wholesalers and distributors, and other food service businesses.
The Company has a hub and spoke business model. The Company is typically engaged by retailers and wholesalers (“Hubs”), which in turn require their suppliers (“Spokes”) to utilize the Company’s services.
On December 21, 2023, the Company effected a change of its corporate name from Park City Group, Inc. to ReposiTrak, Inc. The Company is incorporated in the State of Nevada and has principal subsidiaries: PC Group, Inc., a Utah corporation (
The Company’s principal executive offices are located at 5282 South Commerce Drive, Suite D292, Murray, Utah 84107. Its telephone number is (435) 645-2000. Its website address is www.repositrak.com.
| NOTE 2. | SIGNIFICANT ACCOUNTING POLICIES |
Principles of Consolidation
The financial statements presented herein reflect the consolidated financial position of ReposiTrak, Inc. and our subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that materially affect the amounts reported in the consolidated financial statements. Actual results could differ from these estimates. The methods, estimates, and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its financial statements. The Securities and Exchange Commission (the “SEC”) has defined the most critical accounting policies as those that are most important to the portrayal of the Company’s financial condition and results and require the Company to make its most difficult and subjective judgments, often because of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company’s most critical accounting policies include revenue recognition, goodwill, other long-lived asset valuations, income taxes, stock-based compensation, and capitalization of software development costs.
Concentration of Credit Risk and Significant Customers
The Company maintains cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of trade receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing evaluations of its customers and maintains allowances for possible losses. The provision is based on the overall composition of our accounts receivable aging, our prior history of accounts receivable write-offs, and our experience with specific customers.
Other factors indicating significant risk include customers that have filed for bankruptcy or customers for which we have less payment history to rely upon. We rely on historical trends of bad debt as a percentage of total revenue and apply these percentages to the accounts receivable which when realized have been within the range of management’s expectations. The Company does not require collateral from its customers.
The Company’s accounts receivable are derived from sales of products and services primarily to customers operating multilocation retail and grocery stores. The Company writes off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated financial statements. Amounts that have been invoiced are recorded in accounts receivable (current and long-term), and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met.
The Company had
Prepaid Expense and Other Current Assets
Prepaid expense and other current assets include amounts for which payment has been made but the services have not yet been consumed. The Company’s prepaid expense is made up primarily of prepayments for hosted software applications used in the Company’s operations, maintenance agreements on hardware and software, and other miscellaneous amounts for insurance, membership fees and professional fees. Prepaid expense is amortized on a pro-rata basis to expense accounts as the services are consumed typically by the passage of time or as the service is used.
Depreciation and Amortization
Depreciation and amortization of property and equipment is computed using the straight-line method based on the following estimated useful lives:
| Years | |||
| Furniture and fixtures | |||
| Computer equipment | |||
| Equipment under capital leases | |||
| Long-term use equipment | |||
| Leasehold improvements | See below |
Leasehold improvements are amortized over the shorter of the remaining lease term or the estimated useful life of the improvements.
Amortization of intangible assets are computed using the straight-line method based on the following estimated useful lives:
| Years | |||
| Customer relationships | |||
| Acquired developed software | |||
| Developed software | |||
| Goodwill | See below |
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Other intangible assets are amortized over their useful lives.
Warranties
The Company offers a limited warranty against software defects. Customers who are not completely satisfied with their software purchase may attempt to be reimbursed for their purchases outside the warranty period. For the years ending June 30, 2026 and 2025, the Company did not incur any expense associated with warranty claims.
Adoption of ASC 718, Compensation – Stock Compensation
From time to time, the Company issues shares of common stock as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation (“Topic 718”). Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service or vesting period.
In prior periods through September 30, 2019, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC Subtopic 505-50, Equity – Equity-based Payments to Non-employees (“Subtopic 505-50”). Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated, and the percentage of completion is applied to that estimate to determine the cumulative expense recorded.
The Company adopted Topic 718 during the second quarter of fiscal year 2020. Topic 718 did not have a material impact on the Company’s consolidated financial statements.
Adoption of ASU 2016-02 “Leases (Topic 842)”
Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted the requirements of ASU 2016-02 utilizing the modified retrospective method of transition to identified leases as of July 1, 2019 (the “Effective Date”). The recognition of additional operating lease liabilities was $
On June 21, 2018, the Company entered into an office lease at 5282 South Commerce Drive Suite D292, Murray, Utah 84107, providing for the lease of approximately
On March 1, 2022, the Company exercised the option to renew the office lease for an additional -year term. Terms of the lease were modified to reduce the space from
During the fiscal year ended June 30, 2025, the Company's operating lease for its office space expired and was not renewed for an additional -year term. As a result, the Company derecognized the related right-of-use asset and lease liability upon lease termination. Total lease expense related to this lease was $
Revenue Recognition
The Company recognizes revenue as it transfers control of deliverables (products, solutions and services) to its customers in an amount reflecting the consideration to which it expects to be entitled. To recognize revenue, the Company applies the following five step approach: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when a performance obligation is satisfied. The Company accounts for a contract based on the terms and conditions the parties agree to, if the contract has commercial substance and if collectability of consideration is probable. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience.
The Company may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of its deliverables. To the extent a contract includes multiple promised deliverables, the Company applies judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, the Company allocates consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which the Company would sell a promised good or service separately to the customer. When not directly observable, the Company typically estimates standalone selling price by using the expected cost plus a margin approach. The Company typically establishes a standalone selling price range for its deliverables, which is reassessed on a periodic basis or when facts and circumstances change.
For performance obligations where control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Revenue related to fixed-price contracts for application development and systems integration services, consulting or other technology services is recognized as the service is performed using the output method, under which the total value of revenue is recognized based on each contract’s deliverable(s) as they are completed and when value is transferred to a customer. Revenue related to fixed-price application maintenance, testing and business process services is recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered, in accordance with the practical expedient in FASB ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”), paragraph 606-10-55-18 (“ASC 606-10-55-18”).
If the Company’s invoicing is not consistent with the value delivered, revenue is recognized as the service is performed based on the method described above. The output method measures the results achieved and value transferred to a customer, which is updated as the project progresses to reflect the latest available information; such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately. Revenue related to fixed-price hosting and infrastructure services is recognized based on the Company’s right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered, in accordance with the practical expedient in ASC 606-10-55-18. If the Company’s invoicing is not consistent with value delivered, revenue is recognized on a straight-line basis unless revenue is earned and obligations are fulfilled in a different pattern. The revenue recognition method applied to the types of contracts described above provides the most faithful depiction of performance towards satisfaction of the Company’s performance obligations.
Revenue related to the Company’s software license arrangements that do not require significant modification or customization of the underlying software is recognized when the software is delivered as control is transferred at a point in time. For software license arrangements that require significant functionality enhancements or modification of the software, revenue for the software license and related services is recognized as the services are performed in accordance with the methods described above. In software hosting arrangements, the rights provided to the customer, such as ownership of a license, contract termination provisions and the feasibility of the client to operate the software, are considered in determining whether the arrangement includes a license or a service. Revenue related to software maintenance and support is generally recognized on a straight-line basis over the contract period.
Management expects that incremental commission fees paid as a result of obtaining a contract are recoverable and therefore the Company capitalized them as contract costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.
Revenue related to transaction-based or volume-based contracts is recognized over the period the services are provided in a manner that corresponds with the value transferred to the customer to-date relative to the remaining services to be provided.
From time to time, the Company may enter into arrangements with third party suppliers to resell products or services. In such cases, the Company evaluates whether the Company is the principal (i.e., report revenue on a gross basis) or agent (i.e., report revenue on a net basis). In doing so, the Company first evaluates whether it controls the good or service before it is transferred to the customer. If the Company controls the good or service before it is transferred to the customer, the Company is the principal; if not, the Company is the agent. Determining whether the Company controls the good or service before it is transferred to the customer may require judgment.
The Company provides customers with assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications. General updates or patch fixes are not considered an additional performance obligation in the contract.
Variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value), or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration to which we may be entitled. The Company includes in the transaction price variable consideration only to the extent it is probable that a significant reversal of revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price may involve judgment and is based largely on an assessment of its anticipated performance and all information that is reasonably available to the Company.
The Company assesses the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its services, not to receive or provide financing from or to customers. The Company does not consider set up or transition fees paid upfront by its customers to represent a financing component, as such fees are required to encourage customer commitment to the project and protect us from early termination of the contract.
Trade Accounts Receivable and Contract Balances
We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset (unbilled receivable). A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). For example, we recognize a receivable for revenue related to our transaction or volume-based contracts when earned regardless of whether amounts have been billed. We present such receivables in trade accounts receivable, net in our consolidated statements of financial position at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables, judgment, and other applicable factors.
A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented in current and other assets in our consolidated balance sheets and primarily relate to unbilled amounts on fixed-price contracts utilizing the output method of revenue recognition. The table below shows movements in contract assets:
| Contract | |||||
| assets | |||||
| Balance – June 30, 2025 | $ | ||||
| Revenue recognized during the period but not billed | |||||
| Amounts reclassified to accounts receivable | ) | ||||
| Other | ( | ) | |||
| Balance – June 30, 2026 | $ | (1) | |||
| (1) | Contract asset balances for June 30, 2026 include a current and a long-term contract asset of $ |
Our contract assets and liabilities are reported at the end of each reporting period. The difference between the opening and closing balances of our contract assets and deferred revenue primarily results from the timing difference between our performance obligations and the customer’s payment. We receive payments from customers based on the terms established in our contracts, which may vary generally by contract type.
The table below shows movements in the deferred revenue balances (current and noncurrent) for the period:
| Contract | ||||
| liability | ||||
| Balance – June 30, 2025 | $ | |||
| Amounts billed but not recognized as revenue | ||||
| Revenue recognized related to the opening balance of deferred revenue | ( | ) | ||
| Balance – June 30, 2026 | $ | |||
Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. The difference between the opening and closing balances of our contract assets and deferred revenue primarily results from the timing difference between our performance obligations and the customer’s payment. We receive payments from customers based on the terms established in our contracts, which may vary generally by contract type.
Notes Receivable
SPAR Note Receivable
On March 17, 2026, PC Group, Inc. ("Lender") a subsidiary of the Company, entered into an Amended and Restated Senior Unsecured Promissory Note (the "Note") with SPAR Marketing Force, Inc. (the "Borrower"), a subsidiary of SPAR Group, Inc. (“SPAR”). The financing arrangement provides for advances of up to $
The note bears contractual interest at
Equity Consideration and Price Protection
In connection with the financing, the Borrower agreed to cause SPAR to issue
The arrangement also provides for contingent cash payments if the shares are issued below $
Accounting for Equity Consideration
The Company expects that the equity consideration will be accounted for as an additional component of the overall return on the loan receivable. The Company will evaluate whether the equity represents a discount or other yield enhancement in accordance with ASC 835-30 and ASC 310-20, and will recognize such amount over the term of the Note using the effective interest method.
Embedded Feature Evaluation
The Company has evaluated the price protection provisions and preliminarily concluded that such features are not clearly and closely related to the host loan receivable and therefore may require bifurcation as a derivative instrument under ASC 815. This conclusion is based on the fact that the provisions introduce variability in cash flows based on the equity pricing of SPAR Group, Inc., a third-party issuer, which is not clearly and closely related to a lending arrangement. The final determination is pending completion of the Company’s valuation analysis, which is dependent in part on the issuance and measurement of the related equity consideration.
Credit Risk and Consideration
The loan is unsecured and represents a concentration of credit risk with a single borrower. The Company’s ability to collect principal, interest, and any contingent consideration is dependent on the financial condition and operating performance of the Borrower. The Company monitors the Borrower’s financial condition on an ongoing basis; however, no collateral or other credit enhancements have been obtained to mitigate this risk.
Carrying Amount and Interest Income
The note receivable is measured at amortized cost. The discount is accreted into interest income over the term of the note using the effective-interest method.
The carrying amount at June 30, 2026 was as follows:
| Amount | ||||
| Principal outstanding | $ | |||
| Less: unamortized discount | ( | ) | ||
| Note Receivable, net | $ | |||
During the year ended June 30, 2026, the Company recognized $
Disaggregation of Revenue
The table below presents disaggregated revenue from contracts with customers by contract-type. All revenues for the years ending June 30, 2026 and 2025 were generated from sales in North America. We believe this disaggregation best depicts the nature, amount, timing and uncertainty of our revenue and cash flows that may be affected by industry, market and other economic factors:
| Year Ended, June 30 | ||||||||||||||||
| 2026 | 2025 | Change $ | Change % | |||||||||||||
| Recurring revenue – subscription and support services | $ | $ | $ | % | ||||||||||||
| Non-recurring revenue – setup and training services | ( | ) | - | % | ||||||||||||
| Total | $ | $ | $ | % | ||||||||||||
Software Development Costs
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, the company will occasionally capitalize software costs until the product is available for general release to customers. In these instances, the Company determines technological feasibility for its software products to have been reached when a working prototype is complete and meets or exceeds design specifications including functions, features, and technical performance requirements.
Research and Development Costs
Research and development costs include personnel costs, engineering, consulting, and contract labor and are expensed as incurred for software that has not achieved technological feasibility.
Advertising Costs
Advertising is expensed as incurred. Advertising costs were approximately $
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities.
Earnings Per Share
Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income applicable to common shareholders by the weighted average number of shares of the Company’s common stock, par value $
For the year ended June 30, 2026, warrants to purchase
The following table presents the components of the computation of basic and diluted earnings per share for the periods indicated:
| Year ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Numerator | ||||||||
| Net income applicable to common shareholders | $ | $ | ||||||
| Denominator | ||||||||
| Weighted average common shares outstanding, basic | ||||||||
| Warrants to purchase Common Stock | ||||||||
| Weighted average common shares outstanding, diluted | ||||||||
| Net income per share | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
Stock-Based Compensation
The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. The Company records compensation expense on a straight-line basis. The fair value of options granted are estimated at the date of grant using a Black-Scholes option pricing model with assumptions for the risk-free interest rate, expected life, volatility, dividend yield and forfeiture rate.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of twelve months or less to be cash equivalents. Cash and cash equivalents are stated at fair value.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, cash equivalents, receivables, payables, accruals and notes payable. The carrying amount of cash, cash equivalents, receivables, payables and accruals approximates fair value due to the short-term nature of these items. The notes payable also approximate fair value based on evaluations of market interest rates.
Equity Securities
The Company accounts for investments in equity securities, other than investments accounted for under the equity method or resulting in consolidation, under ASC 321, Investments—Equity Securities. Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in earnings. Realized and unrealized gains and losses are presented within other income (expense) in the consolidated statements of operations. The available-for-sale debt investment policy described below does not apply to these equity securities.
At June 30, 2026, the Company held common shares of SPAR Group, Inc. As described under SPAR Note Receivable, SPAR issued
At June 30, 2026, the Company beneficially owned approximately
The investment in SPAR common stock had a fair value of $
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level hierarchy that prioritizes the inputs used to measure fair value. A measurement is classified in its entirety within the lowest level of input that is significant to the measurement.
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.
Level 2 — Observable inputs other than Level 1 quoted prices, including quoted prices for similar instruments, quoted prices in inactive markets, and other directly or indirectly observable inputs.
Level 3 — Significant unobservable inputs reflecting assumptions market participants would use in pricing the asset or liability.
The fair value of the SPAR equity investment was determined using the market approach based on unadjusted quoted prices in an active market and was classified within Level 1 of the fair value hierarchy.
Assets and liabilities measured at fair value on a recurring basis at June 30, 2026 were as follows:
| Fair value measurements as of June 30, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| SPAR common stock, at fair value | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Available-for-Sale Debt Investments
We classify our investments in fixed income securities as available-for-sale debt investments. Our available-for-sale debt investments primarily consist of U.S. government, U.S. government agency, non-U.S. government and agency, corporate debt, U.S. agency mortgage-backed securities, commercial paper and certificates of deposit. These available-for-sale debt investments are primarily held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debt investments sold. These investments are recorded in the Consolidated Balance Sheets at fair value. Unrealized gains and losses on these investments are included as a separate component of accumulated other comprehensive income (“AOCI”). We classify our investments as current based on the nature of the investments and their availability for use in current operations.
Impairment Consideration of Investments
For our available-for-sale debt securities in an unrealized loss position, we determine whether a temporary or permanent credit loss exists. In this assessment, which requires judgment, among other factors, we consider the extent to which the fair value is less than the amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security. If factors indicate a permanent credit loss exists, an allowance for credit loss is recorded to other income (loss), net, limited by the amount that the fair value is less than the amortized cost basis. The amount of fair value change relating to all other factors will be recognized in other comprehensive income (“OCI”).
| NOTE 3. | RECEIVABLES |
Accounts receivable consists of the following at June 30:
| 2026 | 2025 | |||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Accounts receivable consists of trade accounts receivable and unbilled amounts recognized as revenue during the year for which invoicing occurs subsequent to year-end. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met.
| NOTE 4. | PROPERTY AND EQUIPMENT |
Property and equipment are stated at cost and consist of the following at June 30:
| 2026 | 2025 | |||||||
| Computer equipment | $ | $ | ||||||
| Furniture and equipment | ||||||||
| Leased equipment | ||||||||
| Leasehold improvements | ||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Depreciation expense for the years ended June 30, 2026 and 2025 was $
| NOTE 5. | CAPITALIZED SOFTWARE COSTS |
Capitalized software costs consist of the following at June 30:
| 2026 | 2025 | |||||||
| Capitalized software costs | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Amortization expense for the years ended June 30, 2026 and 2025 was $
| NOTE 6. | ACQUISITION RELATED INTANGIBLE ASSETS, NET |
Customer relationships consist of the following at June 30:
| 2026 | 2025 | |||||||
| Customer relationships | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| $ | - | $ | - | |||||
Amortization expense for the years ended June 30, 2026 and 2025 was $
| NOTE 7. | ACCRUED LIABILITIES |
Accrued liabilities consist of the following at June 30:
| 2026 | 2025 | |||||||
| Accrued stock-based compensation | $ | $ | ||||||
| Accrued compensation and other liabilities | ||||||||
| Accrued taxes | ||||||||
| Accrued dividends | ||||||||
| $ | $ | |||||||
| NOTE 8. | LINE OF CREDIT |
On October 6, 2021, the Company and U.S. Bank N.A. (the “Bank”) entered into a Revolving Credit Agreement and related addendum and Stand-Alone Revolving Note (collectively, the “Credit Agreement”), effective September 30, 2021. The Credit Agreement replaced the Company’s prior $
The Credit Agreement contained customary affirmative and negative covenants, conditions to borrowing and events of default. Among other requirements, the Company was required to maintain liquid assets of at least $
On April 28, 2023, the Company and the Bank entered into an amendment to the Credit Agreement, effective March 31, 2023. The amendment, among other things, increased the Company’s minimum liquidity requirement to $
On March 15, 2024, given the Company’s liquidity and financial position, the Company elected not to renew the Credit Agreement. There were
| NOTE 9. | DEFERRED REVENUE |
Deferred revenue consisted of the following at June 30:
| 2026 | 2025 | |||||||
| Subscription | $ | $ | ||||||
| Other | ||||||||
| $ | $ | |||||||
| NOTE 10. | INCOME TAXES |
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The provision for income taxes for the year ended June 30, 2026 and 2025 consists of the following:
| 2026 | 2025 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Total Current | ||||||||
| Deferred: | ||||||||
| Federal | ||||||||
| State | ( | ) | ||||||
| Total Deferred | ( | ) | ||||||
| Total Provision | $ | $ | ||||||
The table below provides the updated requirements of ASU 2023-09 for the year ended June 30, 2026.
| 2026 | ||||||||
| Amount | Percent | |||||||
| Federal income tax expense at the statutory rate | $ | % | ||||||
| State and local income taxes, net of Federal income tax effect | % | |||||||
| Foreign tax effects | % | |||||||
| Effect of changes in tax laws or rates enacted in the current period | % | |||||||
| Effect of cross-border tax laws | % | |||||||
| Tax credits | ( | ) | ( | )% | ||||
| Change in valuation allowance | % | |||||||
| Nontaxable/nondeductible items | ||||||||
| Non-deductible officer compensation | % | |||||||
| Other, net | % | |||||||
| Change in unrecognized tax benefits | % | |||||||
| Other adjustments, net | ||||||||
| Deferred tax liability adjustment | % | |||||||
| Other, net | ( | ) | ( | )% | ||||
| Income tax provision (benefit) | $ | % | ||||||
Deferred tax assets and liabilities consist of the following components at June 30:
| 2026 | 2025 | |||||||
| Deferred tax assets: | ||||||||
| NOL carryover | $ | $ | ||||||
| Accrued bonus | ||||||||
| Allowance for bad debts | ||||||||
| Accrued expense | ||||||||
| Capital loss carryover | ||||||||
| Tax credits | ||||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Amortization | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Valuation allowance | ||||||||
| Net deferred tax asset (liability) | $ | $ | ( | ) | ||||
The is for 2026 is
| 2025 | ||||
| Expected income tax expense (benefit) | $ | |||
| State income tax expense (benefit) | ||||
| Federal tax credits | ( | ) | ||
| Officer life insurance | ||||
| Unrealized gain/loss | ( | ) | ||
| Meals and entertainment | ||||
| Stock expenses | ||||
| Officer salary (162m limit) | ||||
| NOL expiry | ||||
| Other permanent differences | ||||
| Change in deferred tax asset/liability | ( | ) | ||
| Total income tax expense/benefit | $ | |||
At June 30, 2026, the Company had net operating loss carryforwards of approximately $
The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities, based on technical merits. If the more-likely-than-not threshold is met, the Company measures the tax position to determine the amount to recognize in the financial statements. The Company performed a review of its material tax positions in accordance with these recognition and measurement standards. As of June 30, 2026 and 2025, the Company did not record any material interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods.
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes.
The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local income tax examinations by tax authorities for the years before June 30, 2023.
| NOTE 11. | COMMITMENTS AND CONTINGENCIES |
Leases
On May 1, 2019, the Company completed the expansion of new equipment for the Company’s information technology infrastructure, buildout of its corporate headquarters, and expansion of its collocation data center, which it completed using approximately $
On June 21, 2018 the Company entered into an office lease at 5282 South Commerce Drive Suite D292, Murray, Utah 84107, providing for the lease of approximately
On March 1, 2022, the Company exercised the option to renew the office lease for an additional -year term. Terms of the lease were modified to reduce the space to approximately
During the fiscal year ended June 30, 2025, the Company's operating lease for its office space expired and was not renewed for an additional -year term. As a result, the Company derecognized the related right-of-use asset and lease liability upon lease termination. Total lease expense related to this lease was $
From time to time the Company may enter into or exit from diminutive operating lease agreements for equipment such as copiers, temporary back up servers, etc. These leases are not of a material amount and thus will not in the aggregate have a material adverse effect on our business, financial condition, results of operation or liquidity.
| NOTE 12. | EMPLOYEE BENEFIT PLAN |
The Company offers an employee benefit plan under Benefit Plan Section 401(k) of the Internal Revenue Code. Employees who have attained the age of 18 are eligible to participate. The Company, at its discretion, may match employee’s contributions at a percentage determined annually by the Board of Directors. Employer matching expense totaled $
| NOTE 13. | STOCKHOLDERS EQUITY |
Officers and Directors Stock Compensation
Effective October 2018, the Board of Directors approved the following compensation for directors who are not employed by the Company:
| ● | Annual compensation of $ |
| ● | Upon appointment, outside independent directors receive a grant of $ |
| ● | Reimbursement of all travel expense related to performance of Directors’ duties on behalf of the Company. |
Officers, Key Employees, Consultants and Directors Stock Compensation
In January 2013, the Board of Directors approved the Second Amended and Restated 2011 Stock Plan (the “Amended 2011 Plan”), which Amended 2011 Plan was approved by shareholders on March 29, 2013. Under the terms of the Amended 2011 Plan, all employees, consultants and directors of the Company are eligible to participate. The maximum aggregate number of shares of Common Stock that may be granted under the Amended 2011 Plan is
In August 2023, our Board of Directors approved the 2023 Omnibus Equity Incentive Plan (the “2023 Plan”), which plan was approved by shareholders on November 20, 2023. Under the terms of the 2023 Plan, all employees, consultants and directors of the Company are eligible to participate. The maximum aggregate number of shares of Common Stock that may be granted under the 2023 Plan is
In August 2023, our Board of Directors approved the 2023 Employee Stock Purchase Plan (the “2023 ESPP”), which plan was approved by shareholders on November 20, 2023. Under the terms of the 2023 ESPP, all full- and part-time employees of the Company are eligible to participate. The maximum aggregate number of shares of Common Stock that may be granted under the 2023 ESPP is
The Company issued
The Company issued
The Company holds treasury stock.
Vested and issued shares under the 2023 Plan for the fiscal year ending June 30, 2026 and June 30, 2025 totaling
Restricted Stock Units
| Weighted | ||||||||
| Average | ||||||||
| Restricted | Grant Date | |||||||
| Stock | Fair Value | |||||||
| Units | ($/share) | |||||||
| Outstanding at July 1, 2024 | ||||||||
| Granted | ||||||||
| Vested and issued | ( | ) | ||||||
| Forfeited | ||||||||
| Outstanding at June 30, 2025 | ||||||||
| Granted | ||||||||
| Vested and issued | ( | ) | ||||||
| Forfeited | ||||||||
| Outstanding at June 30, 2026 | ||||||||
The number of restricted stock units outstanding at June 30, 2026 includes
As of June 30, 2026, there was approximately $
Warrants
Outstanding warrants were issued in connection with private placements of the Company’s Common Stock and with the restructuring of the Series B Preferred that occurred in March of 2018. The following table summarizes information about fixed stock warrants outstanding at June 30, 2026:
| Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
| at June 30, 2026 | at June 30, 2026 | |||||||||||||||||||||
| Range of | Weighted average | Weighted | Weighted | |||||||||||||||||||
| exercise | Number | remaining contractual | average | Number | average | |||||||||||||||||
| prices | Outstanding | life (years) | exercise price | exercisable | exercise price | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | |||||||||||||||||||||
During the quarter ended March 31, 2026, the Company’s Board of Directors approved the modification to extend the expiration dates of the Company’s existing January 26, 2023 and February 5, 2023 warrants by an additional years, co-terminating March 31, 2028. The exercise price of $
Preferred Stock
The Company’s articles of incorporation currently authorizes the issuance of up to
Preferred Redemption
Section 5 of the Company’s Fourth Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred Stock, as amended (the “Series B COD”) and Section 4 of the First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock, as amended (the "Series B-1 COD") provides the Company’s Board of Directors with the right to redeem any or all of the outstanding shares of the Company’s Series B Preferred or Series B-1 Preferred, respectively, for a cash payment of $
On August 29, 2023, the Board approved the redemption and retirement of its Series B Preferred and Series B-1 Preferred for their stated value, or $
The Company fully redeemed the Series B-1 Preferred during fiscal 2024. On December 9, 2024, the Company filed a Withdrawal of Certificate of Designation with the Secretary of State of the State of Nevada and terminated the designation of the Series B-1 Preferred.
During the years ended June 30, 2026 and 2025,
| Series B Preferred | ||||||||||||||||
| Dollars | Remaining | |||||||||||||||
| Expended | Amount | |||||||||||||||
| Total | by Period | Available | ||||||||||||||
| Number of | under the | for Future | ||||||||||||||
| Shares | Price Paid | Preferred | Preferred | |||||||||||||
| Period (1) | Redeemed | Per Share | Redemption | Redemption | ||||||||||||
| July 1, 2024 – September 30, 2024: | $ | $ | $ | |||||||||||||
| October 1, 2024 – December 31, 2024: | $ | $ | $ | |||||||||||||
| January 1, 2025 – March 31, 2025: | $ | $ | $ | |||||||||||||
| April 1, 2025 – June 30, 2025: | $ | $ | $ | |||||||||||||
| Total | $ | $ | ||||||||||||||
| July 1, 2025 – September 30, 2025: | $ | $ | $ | |||||||||||||
| October 1, 2025 – December 31, 2025: | $ | $ | $ | |||||||||||||
| January 1, 2026 – March 31, 2026: | $ | $ | $ | |||||||||||||
| April 1, 2026 – June 30, 2026: | $ | - | $ | $ | ||||||||||||
| Total | $ | $ | ||||||||||||||
| (1) | We close our books and records on the last calendar day of each month to align our financial closing with our business processes. |
As of June 30, 2026, a total of
The following table provides information about the redemption and retirement of the Series B-1 Preferred during the year ended June 30, 2024:
| Series B-1 Preferred | ||||||||||||||||
| Dollars | Remaining | |||||||||||||||
| Expended | Amount | |||||||||||||||
| Total | by Period | Available | ||||||||||||||
| Number of | under the | for Future | ||||||||||||||
| Shares | Price Paid | Preferred | Preferred | |||||||||||||
| Period (1) | Redeemed | Per Share | Redemption | Redemption | ||||||||||||
| July 1, 2023 – September 30, 2023: | $ | $ | ||||||||||||||
| October 1, 2023 – December 31, 2023: | $ | $ | $ | |||||||||||||
| January 1, 2024 – March 31, 2024: | $ | $ | $ | |||||||||||||
| April 1, 2024 – June 30, 2024: | $ | $ | $ | |||||||||||||
| Total | $ | $ | ||||||||||||||
| (1) | We close our books and records on the last calendar day of each month to align our financial closing with our business processes. |
Share Repurchase Program
On May 9, 2019, our Board of Directors approved the repurchase of up to $
On March 17, 2020, the Board, given the extreme uncertainty due to COVID-19 at the time, suspended the Share Repurchase Program. On May 18, 2021, our Board of Directors resumed its Share Repurchase Program, and increased the number of shares of Common Stock available to repurchase under the Share Repurchase Program by an additional $
Since inception of the Share Repurchase Program through June 30, 2026,
The following table provides information about repurchases of our Common Stock registered pursuant to Section 12 of the Exchange Act, during the years ended June 30, 2026 and 2025:
| Remaining | ||||||||||||||||
| Amount | ||||||||||||||||
| Available for | ||||||||||||||||
| Dollars | Future | |||||||||||||||
| Total | Expended | Share | ||||||||||||||
| Number | by Period | Repurchases | ||||||||||||||
| of Shares | Average | Under the | Under the | |||||||||||||
| Purchased | Price Paid | Plans or | Plans or | |||||||||||||
| Period (1) | by Period | Per Share | Programs | Programs | ||||||||||||
| Year Ended June 30, 2025: | ||||||||||||||||
| July 1, 2024 – September 30, 2024 | $ | $ | $ | |||||||||||||
| October 1, 2024 – December 31, 2024 | $ | $ | $ | |||||||||||||
| January 1, 2025 – March 31, 2025 | $ | $ | $ | |||||||||||||
| April 1, 2025 – June 30, 2025 | $ | $ | $ | |||||||||||||
| Year Ended June 30, 2026: | ||||||||||||||||
| July 1, 2025 – September 30, 2025 | $ | $ | $ | |||||||||||||
| October 1, 2025 – December 31, 2025 | $ | $ | $ | |||||||||||||
| January 1, 2026 – March 31, 2026 | $ | $ | $ | |||||||||||||
| April 1, 2026 – June 30, 2026 | $ | $ | $ | |||||||||||||
(1) We close our books and records on the last calendar day of each month to align our financial closing with our business processes.
| NOTE 14. | RECENT ACCOUNTING PRONOUNCEMENTS |
In December 2023, the FASB issued ASU 2023-09 (ASC Topic 740), Improvements to Income Tax Disclosures, which requires incremental income tax disclosures that increase the transparency and usefulness of income tax disclosures. The updated disclosures primarily require specific categories and greater disaggregation within the rate reconciliation, disaggregation of income taxes paid, and modifications of other income tax-related disclosures. The Company adopted this guidance prospectively effective July 1, 2025. The adoption impacted the presentation and disclosure of income taxes but did not have a material impact on the Company’s financial statements.
In November 2024, the FASB issued ASU 2024-03 (ASC Subtopic 220-40), Disaggregation of Income Statement Expenses, which requires the Company to disclose, in the notes to the financial statements, specified information about certain costs and expenses. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 for non-calendar-year-end entities. The Company is required to adopt this guidance for its annual reporting in fiscal year 2028, and for interim period reporting beginning the first quarter of fiscal year 2029 on either a prospective or retrospective basis. Early adoption is permitted. This standard is expected to impact the Company's disclosures and will not have an impact on its Consolidated Financial Statements.
| NOTE 15. | RELATED PARTY TRANSACTIONS |
Service Agreement. During the year ended June 30, 2026, the Company continued to be a party to a service agreement (the “Service Agreement”) with Riverview Financial Corp ("Riverview"). Riverview was the sole shareholder of Fields Management, Inc. (“FMI”) which was merged into Riverview and Riverview became party to the Service Agreement by assumption of the Service Agreement. Riverview, like FMI prior to the merger, provided certain executive management services to the Company, including designating Randall K. Fields to perform the functions of President and Chief Executive Officer for the Company. Mr. Fields, Riverview’s designated executive, who also serves as the Company’s Chair of the Board of Directors, controls Riverview. During the years ended June 30, 2026 and 2025, the Company paid Riverview $
During the year ended June 30, 2026, the Company redeemed and retired an aggregate of $
Relationship with Borrower
The Company evaluated its relationship with SPAR Marketing Force, Inc. (the "Borrower") under ASC 850, Related Party Disclosures, and determined that the Borrower is not a related party, as it is not under common control with the Company and does not meet the criteria for significant influence.
| NOTE 16. | SEGMENT INFORMATION |
The Company operates as operating segment. The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated gross profit margin, operating margin, and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions such as the allocation of budget between cost of sales, sales and marketing, and general and administrative expenses.
| NOTE 17. | SUBSEQUENT EVENTS |
The Company evaluated subsequent events through September 28, 2026, the date the consolidated financial statements were issued.
On July 1, 2026, the Company entered into Stock Purchase Agreements to acquire an aggregate of
Exhibit 23.1
 |
 |
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in this Annual Report on Form 10-K of ReposiTrak, Inc. for the year ended June 30, 2026, of our report dated September 28, 2026, included in its Registration Statements on Form S-8 (No. 333-255189) and S-3 (No. 333-273940) relating to the financial statements for the year ended June 30, 2026, listed in the accompanying index.
Haynie & Company
Salt Lake City, Utah
September 28, 2026
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULE 13A-14(A)
I, Randall K. Fields, certify that:
1. I have reviewed this Annual Report on Form 10-K of ReposiTrak, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
Date: September 28, 2026 |
By: |
/s/ Randall K. Fields Randall K. Fields Chief Executive Officer and Chair of the Board (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULE 13A-14(A)
I, John R. Merrill, certify that:
1. I have reviewed this Annual Report on Form 10-K of ReposiTrak, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
Date: September 28, 2026 |
By: |
/s/ John R. Merrill John R. Merrill Chief Financial Officer (Principal Financial Officer & Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. Sec.1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Annual Report of ReposiTrak, Inc. (the “Company”) on Form 10-K for the period ending June 30, 2026 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Randall K. Fields, Principal Executive Officer of the Company, and John Merrill, Principal Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
|
Date: September 28, 2026 |
By: |
/s/ Randall K. Fields Randall K. Fields Chief Executive Officer, Chairman and Director (Principal Executive Officer) |
|
Date: September 28, 2026 |
By: |
/s/ John Merrill John Merrill Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 97
REPOSITRAK, INC.
CLAWBACK POLICY
Introduction
The Board of Directors (the “Board”) of ReposiTrak, Inc. (the “Company”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company's pay-for-performance compensation philosophy. The Board has therefore adopted this policy which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 303A.14 of the New York Stock Exchange Listed Company Manual (the “Clawback Listing Standards”).
Administration
This Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee, in which case references herein to the Board shall be deemed references to the Compensation Committee. Any determinations made by the Board shall be final and binding on all affected individuals.
Covered Executives
This Policy applies to the Company's current and former executive officers, as determined by the Board in accordance with the definition in Section 10D of the Exchange Act and the Clawback Listing Standards, and such other senior executives who may from time to time be deemed subject to the Policy by the Board (“Covered Executives”).
Recoupment; Accounting Restatement
In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company's material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Board will require reimbursement or forfeiture of any excess Incentive Compensation received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.
Incentive Compensation
For purposes of this Policy, Incentive Compensation means any of the following; provided that, such compensation is granted, earned, or vested based wholly or in part on the attainment of a financial reporting measure:
|
● |
Annual bonuses and other short- and long-term cash incentives. |
|
● |
Stock options. |
|
● |
Stock appreciation rights. |
|
● |
Restricted stock. |
|
● |
Restricted stock units. |
|
● |
Performance shares. |
|
● |
Performance units. |
Financial reporting measures include:
|
● |
Company stock price. |
|
● |
Total shareholder return. |
|
● |
Revenues. |
|
● |
Net income. |
|
● |
Earnings before interest, taxes, depreciation, and amortization (EBITDA). |
|
● |
Funds from operations. |
|
● |
Liquidity measures such as working capital or operating cash flow. |
|
● |
Return measures such as return on invested capital or return on assets. |
|
● |
Earnings measures such as earnings per share. |
Excess Incentive Compensation: Amount Subject to Recovery
The amount to be recovered will be the excess of the Incentive Compensation paid to the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Board, without regard to any taxes paid by the Covered Executive in respect of the Incentive Compensation paid based on the erroneous data. If the Board cannot determine the amount of excess Incentive Compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.
Method of Recoupment
The Board will determine, in its sole discretion, the method for recouping Incentive Compensation hereunder
which may include, without limitation:
|
(a) |
requiring reimbursement of cash Incentive Compensation previously paid; |
|
(b) |
seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards; |
|
(c) |
offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive; |
|
(d) |
cancelling outstanding vested or unvested equity awards; and/or |
|
(e) |
taking any other remedial and recovery action permitted by law, as determined by the Board. |
No Indemnification
The Company shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive Compensation.
Interpretation
The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act, any applicable rules or standards adopted by the Securities and Exchange Commission, and the Clawback Listing Standards.
Effective Date
This Policy shall be effective as of the date it is adopted by the Board (the “Effective Date”) and shall apply to Incentive Compensation that is received by Covered Executives on or after the Effective Date, even if such Incentive Compensation was approved, awarded, or granted to Covered Executives prior to the Effective Date.
Amendment; Termination
The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to reflect final regulations adopted by the Securities and Exchange Commission under Section 10D of the Exchange Act and to comply with the Clawback Listing Standards and any other rules or standards adopted by a national securities exchange on which the Company's securities are listed. The Board may terminate this Policy at any time.
Other Recoupment Rights
Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
Relationship to Other Plans and Agreements
The Board intends that this Policy will be applied to the fullest extent of the law. The Board may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. In the event of any inconsistency between the terms of the Policy and the terms of any employment agreement, equity award agreement, or similar agreement under which Incentive Compensation has been granted, awarded, earned or paid to a Covered Executive, whether or not deferred, the terms of the Policy shall govern.
Impracticability
The Board shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the national securities exchange on which the Company's securities are listed.
Successors
This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.