ReposiTrak, Inc.

Previous wording

On March 21, 2025, The Company's Board of Directors declared a quarterly cash dividend of $0.01815 per share ($0.0726 per year), payable to shareholders of record on March 31, 2025, which were paid to shareholders of record on or about May 15, 2025. Based on the closing prices on March 31, 2025, this represented an annual dividend yield of approximately 0.33%. Subsequent dividends will be paid within 45 days of each fiscal quarter end.

Current wording

On September 19, 2025, The Company's Board of Directors declared a quarterly cash dividend of $0.02 per share ($0.08 per year), payable to shareholders of record on September 30, 2025, payable to shareholders of record on or about November 14, 2025. Based on the closing prices on September 30, 2025, this represented an annual dividend yield of approximately 0.54%. Subsequent dividends will be paid within 45 days of each fiscal quarter end.

Previous wording

In March 2025, the deadline for compliance with FSMA 204 was extended by 30 months to July 20, 2028. Nearly every company impacted will require some type of technical systems support to meet the requirement by this date. The food supply chain industry is moving toward traceability, driven by competitive pressures beyond regulatory deadlines. Major retailers have announced food traceability programs with more robust requirements than the FDA. While FSMA 204 requires traceability for certain foods included on the Food Traceability List (FTL), retailers have publicly communicated traceability requirements including:

Current wording

In March 2025, the deadline for compliance with FSMA 204 was extended by 30 months to July 20, 2028. Nearly every company impacted will require some type of technical systems support to meet the requirement by this date. The food supply chain industry is moving toward traceability, driven by competitive pressures beyond regulatory deadlines. Major retailers have announced food traceability programs with more robust requirements than the FDA. While FSMA 204 requires traceability for certain foods included on the FTL, retailers have publicly communicated traceability requirements including:

Previous wording

Revenue was $5,913,732 and $5,084,866 for the three months ended March 31, 2025 and 2024, respectively, a 16% 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 tighter 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 $5,971,467 and $5,441,142 for the three months ended September 30, 2025 and 2024, respectively, a 10% 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 tighter 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 $911,693 and $831,912 for the three months ended March 31, 2025 and 2024, respectively, a 10% increase. This $79,781 increase is primarily the result of development personnel to accelerate automation of onboarding and support services in effort to support the scale and expansion of the FSMA 204 initiative. The demand in traceability requires additional offshore resources to further accelerate the systematic onboarding of customers with little if any human intervention.

Current wording

Cost of services and product support was $854,152 and $859,219 for the three months ended September 30, 2025 and 2024, respectively, a 1% decrease. This $5,067 decrease is primarily the result of certain development costs to be capitalized as part of significant enhancements being developed to our current platform of services as well as several new software programs to be released at a future date. The demand in traceability has required additional development of software used on the ReposiTrak platform in order to accurately meet the complex requirements of FSMA 204 in addition to further accelerate the systematic onboarding of customers with little if any human intervention.

Previous wording

Sales and marketing expense was $1,408,861 and $1,349,838 for the three months ended March 31, 2025 and 2024, respectively, a 4% 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 increase in sales and marketing expense has been the result of commission due to higher sales and FSMA 204 traceability awareness marketing. We believe the uptick in marketing spending will flatten over the next twelve months as awareness of the traceability regulatory deadline approaches and the industry continues to mandate early adoption.

Current wording

Sales and marketing expense was $1,607,469 and $1,529,100 for the three months ended September 30, 2025 and 2024, respectively, a 5% 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 increase in sales and marketing expense has been the result of commission due to higher sales and FSMA 204 traceability awareness marketing. We believe the uptick in marketing spending, excluding commissions and other variable costs due to higher sales, will flatten over the next twelve months as awareness of the traceability regulatory deadline approaches and the industry continues to mandate early adoption.

Previous wording

General and administrative expense was $1,455,602 and $1,352,197 for the three months ended March 31, 2025 and 2024, respectively, an 8% increase. The increase in general and administrative expense was primarily due to higher employee benefit costs, general liability insurance, D&O insurance, and higher payroll taxes due to an increase in sales commissions.

Current wording

General and administrative expense was $1,372,227 and $1,295,551 for the three months ended September 30, 2025 and 2024, respectively, a 6% increase. The increase in general and administrative expense was primarily due to higher employee benefit costs, general liability insurance, increases in D&O insurance due to a higher market cap, and higher payroll taxes due to an increase in commissions and other benefit programs.

Previous wording

Net other income was $933,094 for the nine months ended March 31, 2025, compared to net other income of $951,412 for the nine months ended March 31, 2024. 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 $375,355 for the three months ended September 30, 2025, compared to net other income of $335,094 for the three months ended September 30, 2024. Other income increased due to an increase in interest income attributable to earnings on fixed income instruments as a result in higher cash balances. 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 or increasing the total amount of cash held for investment.

Previous wording

Preferred dividends accrued on the Company’s Preferred Stock was $85,725 for the three months ended March 31, 2025 and $134,345 for the three months ended March 31, 2024. Dividends decreased due to the redemption and retirement of Preferred Stock since the inception of the redemption plan that commenced in fiscal 2024. 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 431,586 shares of Preferred Stock, including Series B and Series B-1 Preferred, at the redemption price of $10.70 per share, have been redeemed for a total of $4,617,970.

Current wording

Preferred dividends accrued on the Company’s Preferred Stock was $58,817 for the three months ended September 30, 2025 and $107,882 for the three months ended September 30, 2024. Dividends decreased due to the redemption and retirement of Preferred Stock since the inception of the redemption plan that commenced in fiscal 2024. Although no assurances can be given, the Company announced that it intends to redeem all of the Series B and B-1 Preferred on or before December 2026. Since inception, a total of 571,772 shares of Preferred Stock, including Series B and Series B-1 Preferred, at the redemption price of $10.70 per share, have been redeemed for a total of $6,117,960. There is a total of $2.85 million of Preferred Stock remaining to be redeemed.

Previous wording

We have historically funded our operations with cash from operations, equity financings, and borrowings from our existing line of credit with U.S. Bank N.A. (the “Bank”), which was revised on October 6, 2021, and again in 2022. In March 2024, given our strong financial position, we terminated the credit facility with our bank.

Current wording

We have historically funded our operations with cash from operations, equity financings, and borrowings from our existing line of credit with U.S. Bank N.A. (the “Bank”), which was revised on October 6, 2021, and again in 2022. In March 2024, given our strong financial position, we terminated the credit facility with the Bank.

Previous wording

Cash was $28,134,321 and $25,153,862 at March 31, 2025 and June 30, 2024, respectively. This 12% 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 and the resulting interest income.

Current wording

Cash was $28,794,806 and $28,568,805 at September 30, 2025 and June 30, 2025, respectively. This 1% 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 and the resulting interest income.

Previous wording

Net cash provided by operating activities for the nine months ended March 31, 2025 was $6,763,371 compared to net cash provided by operating activities of 4,910,741 for the nine months ended March 31, 2024. Net cash provided by operating activities increased 38% 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 $284,881 in the nine months ended March 31, 2025, compared to nine months ended March 31, 2024 as a result of bad debt expense, stock compensation expense and a increase in depreciation and amortization.

Current wording

Net cash provided by operating activities for the three months ended September 30, 2025 was $1,538,447 compared to net cash provided by operating activities of $1,868,900 for the three months ended September 30, 2024. Net cash provided by operating activities decreased 18% due principally to an increase in accounts receivable due to longer term contracts and an increase in prepaid expense and other assets. Noncash expense in the quarter increased by $23,937 in the three months ended September 30, 2025, compared to three months ended September 30, 2024 as a result of additional bad debt expense.

Previous wording

Net cash provided by investing activities for the nine months ended March 31, 2025 was $6,315 compared to net cash used in investing activities of $48,538 for the nine months ended March 31, 2024. This increase in cash provided by investing activities for the nine months ended March 31, 2025 was due to the sale of marketable securities.

Current wording

Net cash used in investing activities for the three months ended September 30, 2025 was $20,359 compared to net cash provided by investing activities of $34,086 for the three months ended September 30, 2024. This decrease in cash provided by investing activities for the three months ended September 30, 2025 was due the purchase of fixed assets and realized loss on certain marketable securities.

Previous wording

Net cash used in financing activities totaled $3,789,227 for the nine months ended March 31, 2025, compared to cash used in financing activities of $4,400,402 for the nine months ended March 31, 2024. 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.

Current wording

Net cash used in financing activities totaled $1,292,087 for the three months ended September 30, 2025, compared to cash used in financing activities of $1,266,642 for the three months ended September 30, 2024. The increase in net cash used in financing activities is due to an increase in our buyback of Common Stock and by the continued redemption of Preferred Stock during the period.

Previous wording

At March 31, 2025, the Company had positive working capital of $27,318,199 as compared with positive working capital of $24,757,025 at June 30, 2024. This $2,561,174 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.

Current wording

At September 30, 2025, the Company had positive working capital of $28,899,777 as compared with positive working capital of $28,154,682 at June 30, 2025. This $745,095 increase in working capital is primarily due to an increase in prepaid expense, other current assets and accounts receivables offset by a decrease in contract assets and an increase in accrued liabilities offset by a decrease in deferred revenue. Cash and cash equivalents also increased due to cash receipts from customers in all lines of business which include compliance, supply chain and traceability who in most cases pay annually in advance for their subscription.

Previous wording

Current assets totaled $32,752,375 as of March 31, 2025, 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.

Current wording

Current assets totaled $34,114,277 as of September 30, 2025, as compared to $33,685,800 as of June 30, 2025. The increase in current assets is primarily attributable to the increase in cash and contract assets offset by an increase of accounts receivables.

Previous wording

Current liabilities totaled $5,434,176 as of March 31, 2025 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 March 31, 2025, the Company had zero bank debt.

Current wording

Current liabilities totaled $5,214,500 as of September 30, 2025 as compared to $5,531,118 as of June 30, 2025. The decrease in current liabilities is primarily attributable to the decrease in deferred revenue offset partially by the increase in accounts payable and accrued liabilities. As of September 30, 2025, the Company had zero bank debt.

Previous wording

While no assurances can be given, management currently believes that the Company will continue to increase its cash flow from operations and working capital position in subsequent periods. The Company’s increase in anticipated cash flow from operations and working capital position is expected to be offset by the use of cash required to fund the Company’s quarterly cash dividends of $0.015 per share, announced on September 28, 2022, December 30, 2022, February 10, 2023, March 21, 2023, June 20, 2023, September 19, 2023, and of $0.0165 per share, announced on December 12, 2023, March 18, 2024, June 18, 2024 and September 19, 2024, as well as the redemption and retirement of the Company’s Series B Convertible Preferred Stock (the “Preferred Stock”) for their stated value, or $10.70 for each share of Preferred Stock, resulting in an aggregate purchase price of $8,964,214.

Current wording

While no assurances can be given, management currently believes that the Company will continue to increase its cash flow from operations and working capital position in subsequent periods. The Company’s increase in anticipated cash flow from operations and working capital position is expected to be offset by the use of cash required to fund: