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 2025 2024 Change $ Change % Recurring revenue subscription and support services $ 22,300,840 $ 20,357,893 $ 1,942,947 10 % Non-recurring revenue setup and training services 305,226 95,427 209,799 220 % Total $ 22,606,066 $ 20,453,320 $ 2,152,746 11 % …

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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. 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, 2025 and 2024 consists of the following: 2025 2024 Current: Federal $ 641,718 $ - State 34,132 374,491 Total Current Provision 675,850 374,491 Total Provision $ 675,850 $ 374,491 Net deferred tax liabilities consist of the following components at June 30: 2025 2024 Deferred tax assets: NOL carryover $ 1,029,290 $ 1,825,300 Accrued bonus 98,278 127,800 Allowance for bad debts 63,034 59,200 Accrued expense 45,180 39,500 Capital loss carryover 38,622 38,600 Operating lease ROU - 2,900 Total deferred tax assets 1,274,404 2,093,300 Deferred tax liabilities: Amortization (1,249,542 ) (1,075,600 ) Depreciation (156,837 ) (120,000 ) Total deferred tax liabilities (1,406,379 ) (1,195,600 ) Valuation allowance - (897,700 ) Net deferred …

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NOTE 15. RELATED PARTY TRANSACTIONS Service Agreement. During the year ended June 30, 2025, the Company continued to be a party to a Service Agreement with Fields Management, Inc. ( FMI ), pursuant to which FMI provided certain executive management services to the Company, including designating Mr. Fields to perform the functions of President and Chief Executive Officer for the Company. Mr. Fields, FMIs designated executive, who also serves as the Companys Chair of the Board of Directors, controls FMI. During the year ended June 30, 2025 and 2024, the Company paid FMI $1,025,617 and $969,804, respectively, in connection with the Service Agreement. The Company had no payables to FMI at June 30, 2025 and 2024 respectively, under the Service Agreement. During the year ended June 30, 2025, the Company redeemed and retired and 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 and aggregate of $95,284 in Series B Preferred and $2,272,701 in Series B- 1 Preferred from Mr. Randall K. Fields, affiliates of Mr. Fields, and Robert W. Allen. Mr. Allen is a director of the Company. …

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NOTE 9. DEFERRED REVENUE Deferred revenue consisted of the following at June 30: 2025 2024 Subscription $ 2,799,317 $ 2,085,621 Other 376,591 355,613 $ 3,175,908 $ 2,441,234

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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 accou …

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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 In accordance with the Subsequent Events Topic of the FASB ASC 855, we have evaluated subsequent events, through the filing date and noted no events have occurred subsequent to June 30, 2025 that are reasonably likely to impact the Companys financial statements. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing