Financial Analysis

NOTE 11. COMMITMENTS AND CONTINGENCIES Leases On May 1, 2019, the Company completed the expansion of new equipment for the Companys information technology infrastructure, buildout of its corporate headquarters, and expansion of its collocation data center, which it completed using approximately $1,269,000 (the Lease Amount ) of funds provided by U.S. Bank to finance equipment and services related to the Companys expansion and relocation pursuant to that certain lease agreement, originally entered into by and between the Company and U.S. Bank on January 9, 2019 ( the Lease Agreement ). Pursuant to the Lease Agreement, as of May 1, 2019, U.S. Bank is now leasing back the property and equipment purchased by the Company. Pursuant to the Lease Agreement, commencing May 1, 2019, the initial term of the lease shall be 48 months, the Lease Amount shall accrue interest at a rate of 5.0% per annum, and the Company shall be required to make monthly rental payments in the amount of approximately $29,097 per month. On July 30, 2020 the Company made an early repayment of the entire outstanding balance on the note payable due to U.S. Bank in the amount of $960,208. The repayment amount included $64,721 of accrued interest. No repayment penalties were incurred as a result of the transaction. 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 9,800 square feet for a period of three yea …

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Year Ended, June 30 2026 2025 Change $ Change % Recurring revenue subscription and support services $ 23,098,359 $ 22,300,840 $ 797,519 4 % Non-recurring revenue setup and training services 188,960 305,226 (116,266 ) -38 % Total $ 23,287,319 $ 22,606,066 $ 681,253 3 % …

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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 $ 1,398,426 $ 641,718 State 602,608 34,132 Total Current 2,001,034 675,850 Deferred: Federal 207,938 - State (258,973 ) - Total Deferred (51,035 ) - Total Provision $ 1,949,999 $ 675,850 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 $ 1,999,092 21.00 % State and local income taxes, net of Federal income tax effect 281,123 3.00 % Foreign tax effects - 0.00 % Effect of c …

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"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, Riverviews designated executive, who also serves as the Companys Chair of the Board of Directors, controls Riverview. During the years ended June 30, 2026 and 2025, the Company paid Riverview $1,025,617 and $1,025,617 respectively, in connection with the Service Agreement. The Company had no payables to Riverview under the Service Agreement as of June 30, 2026 or June 30, 2025. During the year ended June 30, 2026, the Company redeemed and retired an aggregate of $1,874,993 in Series B Preferred from Mr. Randall K. Fields, affiliates of Mr. Fields, and Robert W. Allen. During the year ended June 30, 2025, the Company redeemed and retired an aggregate of $2,937,749 in Series B Preferred from Mr. Randall K. Fields, affiliates of Mr. Fields, and Robert W. Allen. During the year ended June 30, 2024, the Company redeemed and retired an …

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NOTE 9. DEFERRED REVENUE Deferred revenue consisted of the following at June 30: 2026 2025 Subscription $ 3,072,889 $ 2,799,317 Other 1,436,926 376,591 $ 4,509,815 $ 3,175,908

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"NOTE 16. SEGMENT INFORMATION The Company operates as one 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."

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"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 Companys 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 Companys 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 acco …

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"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 $75,000 payable at the rate of $18,750 per quarter. The Company has the right to pay this amount in the form of cash or shares of the Companys Common Stock. Upon appointment, outside independent directors receive a grant of $150,000 payable in shares of the Companys restricted Common Stock calculated based on the market value of the shares of Common Stock on the date of grant. The shares vest ratably over a five -year period. 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 675,000 shares. The Companys Amended 2011 Plan terminated on April 1, 2023, and no new awards were granted under the 2011 Plan thereafter. Awards outstanding under the 2011 Plan remain subject to the 2011 Plan. Any shares subject to outst …

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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 4,709,837 shares of common stock of SPAR Group, Inc. Aggregate consideration was approximately $3.3 million and consisted of a previously paid $100,000 non-refundable deposit, approximately $625,000 of cash consideration and the issuance of an unsecured promissory note with a principal amount of $2,571,885. The note bears interest at 6.0% per annum and matures on July 1, 2030. The transaction occurred subsequent to June 30, 2026 and therefore has not been recognized in the accompanying consolidated financial statements as of June 30, 2026.

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