ReposiTrak (TRAK) risk factors, FY2026 10-K

Risks Related to the Company

1. 01Although we have experienced year-over-year growth and continue to generate net income in recent periods, there can be no assurance that our revenue growth will continue or that we will operate profitably in the future21% rewritten
2. 02Our business is dependent upon the continued services of our founder and Chief Executive Officer, Randall K. Fields. Should we lose the services of Mr. Fields, our operations will be negatively impacted
3. 03Quarterly and annual operating results may fluctuate, which makes it difficult to predict future performance
4. 04We face threats from competing and emerging technologies that may affect our revenue growth and profitability, as well as competitors that are larger and have greater financial and operational resources that may give them an advantage in the market
5. 05We face risks associated with new product introductions
6. 06We cannot accurately predict renewal or upgrade rates and the impact these rates may have on our future revenue and operating results
7. 07If our compliance and food safety solutions do not perform as expected, whether as a result of operator error or otherwise, it could impair our operating results and reputation
8. 08If a customer is sued because of a recalled product, we could be joined in that suit, the defense of which would impair our operating results
9. 09The deployment of our services, or consultation provided by our personnel, could result in litigation naming us as a party, which litigation could result in a material and adverse effect on us, and our results of operations
10. 10We face risks relating to the sale and delivery of merchandise to customers
11. 11We face risks associated with proprietary protection of our software
12. 12We may discover software errors in our products that may result in a loss of revenue, injury to our reputation or subject us to substantial liability
13. 13Interruptions or delays in service from our third-party data center hosting facility could impair the delivery of our service and harm our business
14. 14If our security measures are breached and unauthorized access is obtained to a customer’s data, our data or our information technology systems, our service may be perceived as not being secure, customers may curtail or stop using our service and we may incur significant legal and financial exposure and liabilities
15. 15Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer
16. 16A delay in the deadline for compliance with FSMA 204 may slow the adoption of our technology as a compliance tool for FSMA, therefore negatively affecting our revenue27% rewritten
17. 17Failure or delay by our customers in the implementation of Section 204(d) of the FSMA may slow the adoption of our technology as a compliance tool for FSMA 204
18. 18Weakened global economic conditions may adversely affect our industry, business and results of operations
19. 19Geopolitical conflicts could potentially affect our sales and disrupt our operations and could have a material adverse impact on the Company
20. 20Our investment in and commercial relationship with SPAR Group, Inc. (“SPAR”), as well as our obligations under indebtedness incurred in connection with a portion of our investment, may not generate the returns or benefits we anticipate and expose us to additional risksNew
21. 21Risks Related to Our Equity InvestmentNew
22. 22Risks Related to the Note Issued in Connection with Our InvestmentNew
23. 23Risks Related to Our Commercial Relationship with SPARNew
24. 24Additional Risks Arising from Our Relationship with SPARNew

Risks Relating to Our Common Stock

1. 25Our quarterly results of operations may fluctuate in the future, which could result in volatility in the price of our Common Stock
2. 26The limited public market for our Common Stock may adversely affect an investor’s ability to liquidate an investment in us
3. 27Future issuances of our shares may lead to future dilution in the value of our Common Stock, will lead to a reduction in shareholder voting power and may prevent a change in control
4. 28Our officers and directors have significant control over us, which may lead to conflicts with other stockholders over corporate governance29% rewritten
5. 29Our corporate charter contains authorized, unissued “blank check” Preferred Stock issuable without stockholder approval with the effect of diluting then current stockholder interests
6. 30Although we have recently declared quarterly cash dividends on our Common Stock, investors should consider the potential for us to terminate the payment of dividends as a factor when determining whether to invest in us
7. 31Our officers and directors have limited liability and indemnification rights under our organizational documents, which may impact our results