ReposiTrak Inc

Previous wording

On September 19, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.0165 per share ($0.066 per year), payable to shareholders of record on November 13, 2024, which were paid to shareholders of record on or about September 30, 2024. Based on the closing prices on September 30, 2024, this represented an annual dividend yield of approximately 0.34%. Subsequent dividends will be paid within 45 days of each fiscal quarter end.

Current wording

On September 19, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.0165 per share ($0.066 per year), payable to shareholders of record on November 13, 2024, which were paid to shareholders of record on or about December 31, 2024. Based on the closing prices on December 31, 2024, this represented an annual dividend yield of approximately 0.31%. Subsequent dividends will be paid within 45 days of each fiscal quarter end.

Previous wording

On September 30, 2024, the Company announced that the Board of Directors approved a 10% increase to the quarterly dividend beginning with the dividend payable to shareholders of record on December 31, 2024.

Current wording

On December 16, 2024, the Company announced that the Board of Directors approved a 10% increase to the quarterly cash dividend of $0.0165 per share ($0.066 per year). The quarterly dividend will increase 10% to $0.01815 per quarter ($0.0726 per share annually) beginning with the dividend payable to shareholders of record on December 31, 2024.

Previous wording

Revenue was $5,441,142 and $5,060,112 for the three months ended September 30, 2024 and 2023, respectively, a 8% increase year-over-year. The increase in revenue was due to growth in recurring subscription revenue primarily in traceability but includes growth in all lines of business. These include compliance, supply chain and traceability. Growth in traceability is the result of growing industry and consumer response to food contaminations and food safety hazards, whether biological, chemical, physical, or allergenic. The risks have elevated regulatory requirements, documentation requisites, and principally has resulted in mandates from the retailers to its suppliers. As more and more retailers, wholesalers and distributors mandate their requirements to suppliers, the Company continues to see a corresponding rise in demand for its services.

Current wording

Revenue was $5,490,908 and $5,125,751 for the three months ended December 31, 2024 and 2023, respectively, a 7% increase year-over-year. The increase in revenue was due to growth in recurring subscription revenue in all lines of business. These include compliance, supply chain and traceability. Growth in traceability is the result of growing industry and consumer response to food contaminations and food safety hazards, whether biological, chemical, physical, or allergenic. The risks have elevated regulatory requirements, documentation requisites, and principally has resulted in mandates from the retailers to its suppliers. As more and more retailers, wholesalers and distributors mandate their requirements to suppliers, the Company continues to see a corresponding rise in demand for its services.

Previous wording

Cost of services and product support was $859,219 and $766,334 for the three months ended September 30, 2024 and 2023, respectively, a 12% increase. This $92,885 increase is primarily the result of development to accelerate automation of onboarding and support services in effort to support the acceleration and expansion of the FSMA 204 initiative. Given the demand in traceability the Company has also expended additional resources on further upgrading its information security services to increase protection of customer data.

Current wording

Cost of services and product support was $1,002,556 and $973,287 for the three months ended December 31, 2024 and 2023, respectively, a 3% increase. This $29,269 increase is primarily the result of development to accelerate automation of onboarding and support services in effort to support the scale and expansion of the FSMA 204 initiative. Given the demand in traceability the Company has also expended additional resources on further upgrading its cyber security services to increase protection of customer data.

Previous wording

Net other income was $335,094 for the three months ended September 30, 2024, compared to net other income of $279,003 for the three months ended September 30, 2023. Other income increased due to higher cash balances and an increase in interest income attributable to higher earnings on fixed income instruments. In September 2024, the Federal Reserve began cutting interest rates, which reductions make it unlikely the Company will be able to maintain the same interest income on its existing cash balances without taking additional credit risk.

Current wording

Net other income was $351,134 for the three months ended December 31, 2024, compared to net other income of $324,325 for the three months ended December 31, 2023. Other income increased due to higher cash balances and an increase in interest income attributable to higher earnings on fixed income instruments. In September 2024, the Federal Reserve began cutting interest rates, which reductions make it unlikely the Company will be able to maintain the same interest income on its existing cash balances without taking additional credit risk.

Previous wording

Sales and marketing expense was $1,529,100 and $1,505,501 for the three months ended September 30, 2024 and 2023, respectively, a 2% increase. The increase in sales and marketing expense was primarily the result of higher sales commissions, sales travel, and investment in marketing for our suite of services. The largest contributors to the increase in sales and marketing expense has been an increase in commission and FSMA 204 traceability awareness marketing. We believe the uptick in marketing costs will flatten over the next twelve months as awareness of the 2026 traceability regulatory deadline approaches.

Current wording

Sales and marketing expense was $2,984,136 and $2,769,878 for the six months ended December 31, 2024 and 2023, respectively, a 8% increase. The increase in sales and marketing expense was primarily the result of higher sales commissions, sales travel, and investment in marketing for our suite of services. The largest contributors to the increase in sales and marketing expense has been an increase in commission and FSMA 204 traceability awareness marketing. We believe the uptick in marketing costs will flatten over the next twelve months as awareness of the 2026 traceability regulatory deadline approaches. However, we believe sales commissions will continue to reflect 8% of incremental revenue.

Previous wording

General and administrative expense was $1,292,551 and $1,279,323 for the three months ended September 30, 2024 and 2023, respectively, a 1% increase. The increase in general and administrative expense was primarily due to higher employee benefit costs, general liability insurance, D&O insurance, and payroll taxes.

Current wording

General and administrative expense was $2,669,104 and $2,626,601 for the six months ended December 31, 2024 and 2023, respectively, a 2% increase. The increase in general and administrative expense was primarily due to higher employee benefit costs, general liability insurance, D&O insurance, and payroll taxes.

Previous wording

Depreciation and amortization expense was $280,211 and $308,945 for the three months ended September 30, 2024 and 2023, respectively, a decrease of 9%. The decrease was due to certain assets that have been fully depreciated or amortized.

Current wording

Depreciation and amortization expense was $584,923 and $608,903 for the six months ended December 31, 2024 and 2023, respectively, a decrease of 4%. The decrease was due to certain assets that have been fully depreciated or amortized offset by investments in our newest data center in Reno, NV.

Previous wording

Preferred dividends accrued on the Company’s Preferred Stock was $107,882 for the three months ended September 30, 2024 and $146,611 for the three months ended September 30, 2023. Dividends decreased due to the redemption and retirement of Preferred Stock. Although no assurances can be given, the Company announced that it intends to redeem all of the Series B and B-1 Preferred stock over three years which commenced August of 2023.

Current wording

Preferred dividends accrued on the Company’s Preferred Stock was $203,498 for the six months ended December 31, 2024 and $293,222 for the six months ended December 31, 2023. Dividends decreased due to the redemption and retirement of Preferred Stock. Although no assurances can be given, the Company announced that it intends to redeem all of the Series B and B-1 Preferred stock over three years which commenced August of 2023. Since inception, a total of 361,493 Preferred shares, including Series B and Series B-1, at the redemption price of $10.70 per share have been redeemed for a total of $3,867,975.

Previous wording

Cash was $25,790,206 and $25,153,862 at September 30, 2024 and June 30, 2024, respectively. This 3% increase is primarily the result of higher revenue and the corresponding cash receipts from customers. It also includes higher earnings associated with a growing cash balance.

Current wording

Cash was $28,041,398 and $25,153,862 at December 31, 2024 and June 30, 2024, respectively. This 11% increase is primarily the result of higher revenue and the corresponding cash receipts from customers who in many cases are required to pay annual subscriptions in advance generating higher cash balances in advance of higher revenue. It also includes higher earnings associated with a growing cash balance.

Previous wording

Net cash provided by operating activities for the three months ended September 30, 2024 was $1,868,900 compared to net cash provided by operating activities of $1,520,770 for the three months ended September 30, 2023. Net cash provided by operating activities increased 23% due principally to an increase in collections due to higher revenues, offset by lower accounts payable. Noncash expense in the quarter increased by $61,683 in the three months ended September 30, 2024, compared to three months ended September 30, 2023 as a result of a decrease in bad debt expense and stock compensation expense offset by an increase in depreciation and amortization.

Current wording

Net cash provided by operating activities for the six months ended December 31, 2024 was $5,328,630 compared to net cash provided by operating activities of $2,451,947 for the six months ended December 31, 2023. Net cash provided by operating activities increased 117% due principally to an increase in deferred revenue and collections due to higher revenues from traceability customers who in most cases are required to pay for their annual subscription in advance. Noncash expense in the quarter increased by $159,148 in the six months ended December 31, 2024, compared to six months ended December 31, 2023 as a result of bad debt expense and stock compensation expense offset by a decrease in depreciation and amortization.

Previous wording

Net cash provided by investing activities for the three months ended September 30, 2024 was $34,086 compared to net cash used in investing activities of $0 for the three months ended September 30, 2023. This increase in cash provided by investing activities for the three months ended September 30, 2024 was due to the sale of marketable securities.

Current wording

Net cash provided by investing activities for the six months ended December 31, 2024 was $18,869 compared to net cash used in investing activities of $16,427 for the six months ended December 31, 2023. This increase in cash provided by investing activities for the six months ended December 31, 2024 was due to the sale of marketable securities.

Previous wording

Net cash used in financing activities totaled $1,266,642 for the three months ended September 30, 2024, compared to cash used in financing activities of $1,814,421 for the three months ended September 30, 2023. The decrease in net cash used in financing activities is due to no buyback of Common stock during the quarter.

Current wording

Net cash used in financing activities totaled $2,459,963 for the six months ended December 31, 2024, compared to cash used in financing activities of $3,173,328 for the six months ended December 31, 2023. The decrease in net cash used in financing activities is due the decrease in our buyback of Common stock offset by the increased redemption of Preferred stock during the period.

Previous wording

At September 30, 2024, the Company had positive working capital of $25,634,543, as compared with positive working capital of $24,757,025 at June 30, 2024. This $877,518 increase in working capital is primarily due to an increase in accounts receivable and decrease in prepaid and other assets offset by a decrease in contract liabilities and an increase in deferred revenue due to an increase in annual subscriptions. Cash and cash equivalents also increased due to cash receipts from customers who have signed up for, among other offerings, the ReposiTrak Traceability Network.

Current wording

At December 31, 2024, the Company had positive working capital of $26,141,604, as compared with positive working capital of $24,757,025 at June 30, 2024. This $1,384,579 increase in working capital is primarily due to an increase in contract assets and a decrease in accounts receivables offset by a decrease in accrued liabilities and an increase in deferred revenue due to an increase in annual subscriptions. Cash and cash equivalents also increased due to cash receipts from customers who have signed up for, among other offerings, the ReposiTrak Traceability Network who in most cases pay in advance for their annual subscription.

Previous wording

Current assets totaled $30,091,919 as of September 30, 2024, as compared to $29,300,167 as of June 30, 2024. The increase in current assets is primarily attributable to the increase in cash and prepaid expense and other current assets offset by a decrease of accounts receivables.

Current wording

Current assets totaled $32,394,539 as of December 31, 2024, as compared to $29,300,167 as of June 30, 2024. The increase in current assets is primarily attributable to the increase in cash and contract assets offset by a decrease of accounts receivables.

Previous wording

Current liabilities totaled $4,457,376 as of September 30, 2024 as compared to $4,543,142 as of June 30, 2024. The decrease in current liabilities is primarily attributable to the increase in deferred revenue offset by a decrease in accrued liabilities and paydown of certain financing lease liabilities. As of September 30, 2024, the Company had zero bank debt.

Current wording

Current liabilities totaled $6,252,935 as of December 31, 2024 as compared to $4,543,142 as of June 30, 2024. The increase in current liabilities is primarily attributable to the increase in deferred revenue and addition of certain financing lease liabilities offset by a decrease in accrued liabilities. As of December 31, 2024, the Company had zero bank debt.