trak20231231

trak20231231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended December 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to .

Commission File Number 001-34941

REPOSITRAK, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	37-1454128
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

5282 South Commerce Drive, Suite D292, Murray, Utah 84107

(Address of principal executive offices)

(435) 645-2000

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	TRAK	New York Stock Exchange

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 and 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. ☒ Yes ☐ No

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 (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

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	☐
Non-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of February 14, 2024, 18,209,501 shares of the registrant’s common stock, $0.01 par value, were issued and outstanding.

REPOSITRAK, INC.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Condensed Balance Sheets as of December 31, 2023 and June 30, 2023 (Unaudited)	1
	Consolidated Condensed Statements of Operations and Comprehensive Income for the Three and Six Months Ended December 31, 2023 and 2022 (Unaudited)	2
	Consolidated Condensed Statements of Cash Flows for the Six Months Ended December 31, 2023 and 2022 (Unaudited)	3
	Consolidated Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended December 31, 2023 and 2022 (Unaudited)	4
	Notes to Consolidated Condensed Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	24

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 5.	Other Information	24

Item 6.	Exhibits	24

Signatures		25

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

REPOSITRAK, INC.

Consolidated Condensed Balance Sheets (Unaudited)

	December 31, 2023			June 30, 2023
*Assets*
Current Assets
Cash and cash equivalents	$	23,253,071		$	23,990,879
Receivables, net of allowance for doubtful accounts of $219,163 and $170,103 at December 31, 2023 and June 30, 2023, respectively		3,799,551			2,523,019
Contract asset – unbilled current portion		150,180			186,959
Prepaid expense and other current assets		366,766			573,763
Total Current Assets		27,569,568			27,274,620

Property and equipment, net		716,979			986,300

Other Assets:
Deposits and other assets		22,414			22,414
Prepaid expense – less current portion		8,996			36,282
Contract asset – unbilled long-term portion		108,052			108,052
Operating lease – right-of-use asset		280,958			310,796
Customer relationships		197,100			262,800
Goodwill		20,883,886			20,883,886
Capitalized software costs, net		541,450			698,281
Total Other Assets		22,042,856			22,322,511

Total Assets	$	50,329,403		$	50,583,431

*Liabilities and Shareholders’ Equity*
Current liabilities
Accounts payable	$	332,306		$	431,387
Accrued liabilities		1,634,620			1,620,000
Contract liability – deferred revenue		2,026,565			1,903,001
Operating lease liability – current		61,372			58,771
Notes payable and financing leases – current		216,542			219,262
Total current liabilities		4,271,405			4,232,421

Long-term liabilities
Operating lease liability – less current portion		231,830			263,047
Notes payable and financing leases – less current portion		83,677			206,032
Total liabilities		4,586,912			4,701,500

Commitments and contingencies

Stockholders’ equity:
Preferred Stock; $0.01 par value, 30,000,000 shares authorized;
Series B Preferred, 700,000 shares authorized; 625,375 shares issued and outstanding at December 31, 2023 and June 30, 2023;		6,254			6,254
Series B-1 Preferred, 550,000 shares authorized; 142,309 and 212,402 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively		1,423			2,124
Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,158,730 and 18,309,051 issued and outstanding at December 31, 2023 and June 30, 2023, respectively		181,590			183,093
Additional paid-in capital		65,637,265			67,732,887
Accumulated other comprehensive loss		(5,904	)		-
Accumulated deficit		(20,078,137	)		(22,042,427	)
Total stockholders’ equity		45,742,491			45,881,931
Total liabilities and stockholders’ equity	$	50,329,403		$	50,583,431

See accompanying notes to consolidated condensed financial statements.

- 1 -

REPOSITRAK, INC.

Consolidated Condensed Statements of Operations and Comprehensive Income (Unaudited)

	Three Months Ended December 31,						Six Months Ended December 31,
	2023			2022			2023			2022

Revenue	$	5,125,751		$	4,750,513		$	10,185,863		$	9,470,990

Operating expense:
Cost of revenue and product support		973,287			866,642			1,739,621			1,699,346
Sales and marketing		1,264,377			1,226,812			2,769,878			2,427,071
General and administrative		1,347,278			1,252,357			2,626,601			2,475,819
Depreciation and amortization		299,958			229,160			608,903			465,166
Total operating expense		3,884,900			3,574,971			7,745,003			7,067,402

Income from operations		1,240,851			1,175,542			2,440,860			2,403,588

Other income (expense):
Interest income		316,445			199,266			574,606			278,358
Interest expense		(7,576	)		(18,058	)		(13,920	)		(42,710	)
Unrealized gain (loss) on short term investments		15,456			(31,406	)		42,642			(38,821	)
Other gain		-			-			-			70,047
Income before income taxes		1,565,176			1,325,344			3,044,188			2,670,462

(Provision) for income taxes:		(114,027	)		(60,000	)		(214,491	)		(120,006	)
Net income		1,451,149			1,265,344			2,829,697			2,550,456

Dividends on preferred stock		(146,611	)		(146,611	)		(293,222	)		(293,222	)

Net income applicable to common shareholders	$	1,304,538		$	1,118,733		$	2,536,475		$	2,257,234

Weighted average shares, basic		18,162,000			18,402,000			18,193,000			18,419,000
Weighted average shares, diluted		18,805,000			18,630,000			18,822,000			18,678,000
Basic income per share	$	0.07		$	0.06		$	0.14		$	0.12
Diluted income per share	$	0.07		$	0.06		$	0.14		$	0.12

Comprehensive income:
Net income	$	1,451,149		$	1,265,344		$	2,829,697		$	2,550,456
Other comprehensive loss:
Unrealized loss on available-for-sale securities		(5,904	)		-			(5,904	)		-

Total comprehensive income	$	1,445,245		$	1,265,344		$	2,823,793		$	2,550,456

See accompanying notes to consolidated condensed financial statements.

- 2 -

REPOSITRAK, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

	Six Months Ended December 31,
	2023			2022
Cash flows from operating activities:
Net income	$	2,829,697		$	2,550,456
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		608,903			465,166
Amortization of operating right-of-use asset		29,838			28,450
Stock compensation expense		171,373			209,869
Bad debt expense		150,000			300,000
(Increase) decrease in:
Accounts receivables		(1,389,753	)		247,507
Long-term receivables, prepaids and other assets		127,755			21,431
Increase (decrease) in:
Accounts payable		(99,081	)		(300,930	)
Operating lease liability		(28,616	)		(26,172	)
Accrued liabilities		(71,733	)		(207,025	)
Deferred revenue		123,564			11,240
Net cash provided by operating activities		2,451,947			3,299,992

Cash flows from investing activities:
Purchase of property and equipment		(10,523	)		(270,854	)
Purchase of marketable securities		(5,904	)		-
Net cash used in investing activities		(16,427	)		(270,854	)

Cash flows from financing activities:
Net decrease in lines of credit		-			(2,142,165	)
Common Stock buyback/retirement		(1,515,574	)		(551,923	)
Redemption of series B-1 preferred		(749,995	)		-
Proceeds from employee stock plan		57,743			48,903
Dividends paid		(840,427	)		(570,511	)
Payments on notes payable and capital leases		(125,075	)		125,865
Net cash used in financing activities		(3,173,328	)		(3,089,831	)

Net decrease in cash and cash equivalents		(737,808	)		(60,693	)

Cash and cash equivalents at beginning of period		23,990,879			21,460,948
Cash and cash equivalents at end of period	$	23,253,071		$	21,400,255

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	317,944		$	264,486
Cash paid for interest	$	6,434		$	40,446
Cash paid for operating leases	$	36,282		$	35,226

Supplemental disclosure of non-cash investing and financing activities:
Common stock to pay accrued liabilities	$	110,000		$	152,195
Dividends accrued on preferred stock	$	293,222		$	293,222

See accompanying notes to consolidated condensed financial statements.

- 3 -

REPOSITRAK, INC.

Consolidated Condensed Statements of Stockholders’ Equity (Deficit) (Unaudited)

Six Months Ended December 31, 2023

	Series B Preferred Stock				Series B-1 Preferred Stock						Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Shares			Amount			Shares			Amount			Capital			Deficit			Loss			Total

Balance, June 30, 2023		625,375	$	6,254		212,402		$	2,124			18,309,051		$	183,093		$	67,732,887		$	(22,042,427	)		-		$	45,881,931
Stock issued for:
Accrued compensation		-		-		-			-			3,716			37			37,463			-			-			37,500
Employee stock plan		-		-		-			-			13,326			133			57,610			-			-			57,743
Stock buyback		-		-		-			-			(155,025	)		(1,550	)		(1,320,532	)		-			-			(1,322,082	)
Preferred Dividends-Declared		-		-		-			-			-			-			-			(146,611	)		-			(146,611	)
Common Stock Dividends-Declared		-		-		-			-			-			-			-			(272,566	)		-			(272,566	)
Net income		-		-		-			-			-			-			-			1,378,548			-			1,378,548
Balance, September 30, 2023		625,375	$	6,254		212,402		$	2,124			18,171,068		$	181,713		$	66,507,428		$	(21,083,056	)	$	-		$	45,614,463
Stock issued for:
Accrued compensation		-		-		-			-			9,674			97			72,403			-			-			72,500
Employee stock plan		-		-		-			-			-			-			-			-			-			-
Stock buyback		-		-		-			-			(22,012	)		(220	)		(193,272	)		-			-			(193,492	)
Preferred stock redemption		-		-		(70,093	)		(701	)		-			-			(749,294	)		-			-			(749,995	)
Preferred Dividends-Declared		-		-		-			-			-			-			-			(146,611	)		-			(146,611	)
Common Stock Dividends-Declare		-		-		-			-			-			-			-			(299,619	)		-			(299,619	)
Net income		-		-		-			-			-			-			-			1,451,149			-			1,451,149
Other comprehensive loss		-		-		-			-			-			-			-			-			(5,904	)		(5,904	)
Balance, December 31, 2023		625,375	$	6,254		142,309		$	1,423			18,158,730		$	181,590		$	65,637,265		$	(20,078,137	)	$	(5,904	)	$	45,742,491

See accompanying notes to consolidated condensed financial statements.

- 4 -

Six Months Ended December 31, 2022

	Series B Preferred Stock				Series B-1 Preferred Stock				Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Loss		Total

Balance, June 30, 2022		625,375	$	6,254		212,402	$	2,124		18,460,538		$	184,608		$	68,653,361		$	(25,943,287	)		-	$	42,903,060
Stock issued for:																						-
Accrued compensation		-		-		-		-		15,603			156			76,717			-			-		76,873
Employee stock plan		-		-		-		-		13,064			131			48,772			-			-		48,903
Stock buyback		-		-		-		-		(20,859	)		(209	)		(103,448	)		-			-		(103,657	)
Preferred Dividends-Declared		-		-		-		-		-			-			-			(146,611	)		-		(146,611	)
Common Stock Dividends-Declared		-		-		-		-		-			-			-			(277,162	)		-		(277,162	)
Net income		-		-		-		-		-			-			-			1,285,112			-		1,285,112
Balance, September 30, 2022		625,375	$	6,254		212,402	$	2,124		18,468,346		$	184,686		$	68,675,402		$	(25,081,948	)	$	-	$	43,786,518

Stock issued for:
Accrued compensation		-		-		-		-		14,691			147			75,175			-			-		75,322
Stock buyback		-		-		-		-		(88,741	)		(888	)		(447,378	)		-			-		(448,266	)
Preferred Dividends-Declared		-		-		-		-		-			-			-			(146,611	)		-

SEC Form 10-Q filed by Park City Group Inc.