Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2023

WHERE FOOD COMES FROM, INC.

(Exact Name of Registrant as Specified in its Charter)

Colorado

001-40314

43-1802805

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer
Identification No.)

202 6^th Street, Suite 400
Castle Rock, Colorado		80104
(Address of Principal Executive Offices)		(Zip Code)

(303) 895-3002

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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, $0.001 par value		WFCF		The NASDAQ Stock Market LLC

Item 2.02

Results of Operations and Financial Condition

Reference is made to the Where Food Comes From, Inc. (the “Company”) press release on November 9, 2023 and conference call transcript, attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein (including, without limitation, the information set forth in the cautionary statement contained in the press release and conference call transcript), relating to the Company’s financial results for the three and nine month period ended September 30, 2023.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits

	Exhibit No.		Description
	99.1		Press Release issued and dated November 9, 2023
	99.2		Transcript for November 9, 2023 conference call
	104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WHERE FOOD COMES FROM, INC. (Registrant)

	By:	/s/ Dannette Henning
Date: November 13, 2023		Dannette Henning
		Chief Financial Officer

Exhibit 99.1

Where Food Comes From, Inc. Reports 2023 Third Quarter Financial Results

Core verification and certification revenue increases but total revenue decreases slightly based on lower hardware sales due primarily to cyclical herd contraction

Third Quarter Highlights – 2023 vs. 2022

●	Verification and certification revenue up 4% to $5.4 million from $5.2 million
●	Product sales decline 23% to $1.2 million from $1.6 million
●	Total revenue down 4% to $7.0 million from $7.3 million
●	Net income decreased 8% to $723,000 from $785,000
●	Diluted EPS flat at $0.13
●	Adjusted EBITDA of $1.2 million vs. $1.3 million
●	Company buys back $855,000 of its stock in Q3, or 60,537 shares; diluted share count drops to 5,658,000 from 6,016,000 year over year

Nine-Month Highlights – 2023 vs. 2022

●	Verification and certification revenue up 8% to $13.9 million from $12.9 million
●	Product sales decline 10% to $3.1 million from $3.5 million
●	Total revenue decreased 2% to $18.4 million from $18.8 million; decline includes impact of one-time $0.9 million contract award in Q1 2022
●	Net income of $1.4 million vs. $1.5 million
●	Diluted EPS of $0.24 vs. $0.25
●	Adjusted EBITDA of $2.5 million vs. $2.8 million
●	Cash generated from operations declined to $2.6 million from $3.0 million
●	Cash & cash equivalents of $3.8 million vs. $4.4 million at 2022 year-end, reflecting impact of stock buybacks
●	Company buys back more than $2.9 million of its stock through first nine months of 2023

CASTLE ROCK, Colorado – November 9, 2023 – Where Food Comes From, Inc. (WFCF) (Nasdaq: WFCF), the most trusted resource for independent, third-party verification of food production practices in North America, today announced financial results for its third quarter and nine-month period ended September 30, 2023.

“Despite continuing headwinds related to cyclical cattle trends, our core verification and certification revenue increased in both the third quarter and nine-month period,” said John Saunders, chairman and CEO. “These increases reflect growth in our customer base and in the number and type of verifications we are conducting. They also underscore continued momentum in consumer preferences for learning more about how and by whom their food is produced. Lower overall revenue in the third quarter was attributable to a decline in hardware sales due to reduced herd sizes. Hardware sales could continue to be lumpy over the next few quarters until herd sizes begin to cycle back to higher levels. Lower hardware sales also weighed on gross margins, although we continued to deliver solid profitability in the quarter and year-to-date period and will be well positioned to drive profit growth over the long term as we benefit from consumer preferences, continued customer growth and high customer retention rates.

“More recently, we announced another important milestone in our aquaculture initiative with the acquisition of Smart Catch™, a program administered by our Postelsia division that promotes transparency and sustainability in seafood,” Saunders added. “Originally a domestic program of the James Beard Foundation designed to link chefs to place-based seafood sustainability initiatives, Smart Catch has tremendous potential for expansion into other areas of the seafood supply chain, including food service institutions, retailers, seafood distributors, suppliers and producers around the world.”

Third Quarter Results – 2023 vs. 2022

Revenue in the third quarter ended September 30, 2023, declined 4% to $7.0 million from $7.3 million. The decline primarily reflected fewer cattle in the supply chain due primarily to cyclical herd contraction.

Revenue mix included:

●	Verification and certification services, up 4% to $5.4 million from $5.2 million.
●	Product revenue, down 23% to $1.2 million from $1.6 million.
●	Consulting revenue of $0.4 million versus $0.5 million.

Gross profit in the third quarter decreased to $2.9 million from $3.2 million.

Selling, general and administrative expense was 9% lower year over year at $1.9 million compared to $2.1 million.

Operating income was 12% lower at $0.9 million versus $1.1 million.

Net income was $723,000, or $0.13 per diluted share, down 8% from $785,000, or $0.13 per diluted share.

Adjusted EBITDA in the third quarter was down slightly at $1.2 million from $1.3 million.

The Company bought back $855,000 of its common stock in the third quarter, or 60,537 shares. The diluted share count was reduced to 5,658,000 from 6,016,000 year over year.

Nine Month Results – 2023 vs. 2022

Total revenue through the first nine months of 2023 decreased 2% to $18.4 million from $18.8 million in the same period last year. The decrease was due to lower hardware sales and the non-recurrence of a large contract award in the first quarter of 2022.

Revenue mix included:

●	Verification and certification services, up 8% to $13.9 million from $12.9 million.
●	Product revenue, down 10% to $3.1 million from $3.5 million.
●	Consulting revenue of $1.3 million compared to $2.4 million in the prior year period when the Company booked a $0.9 million, non-recurring order from a Japanese government entity.

Gross profit through nine months was $7.5 million versus $7.7 million in the year-ago period.

Selling, general and administrative expense was essentially flat at $5.7 million.

Operating income was lower at $1.8 million vs. $2.0 million.

Net income through nine months was $1.4 million, or $0.24 per diluted share, compared to net income of $1.5 million, or $0.25 per diluted share, in the same period last year.

Adjusted EBITDA through nine months was $2.5 million versus $2.8 million a year ago.

The cash and cash equivalents balance at September 30, 2023, declined to $3.8 million from $4.4 million at 2022 year-end due primarily to the Company’s investment in its share repurchase program. Through the first nine months of 2023, the Company bought back more than $2.9 million of its shares.

The Company will conduct a conference call today at 10:00 a.m. Mountain Time.

Call-in numbers for the conference call:

Domestic Toll Free: 1-877-407-8289
International: 1-201-689-8341
Conference Code: 13742404

Phone replay:

A telephone replay of the conference call will be available through December 7, 2023, as follows:
Domestic Toll Free: 1-877-660-6853
International: 1-201-612-7415
Conference Code: 13742404

About Where Food Comes From, Inc.

Where Food Comes From, Inc. is America’s trusted resource for third party verification of food production practices. Through proprietary technology and patented business processes, the Company estimates that it supports more than 17,500 farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands and restaurants with a wide variety of value-added services. Through its IMI Global, Validus Verification Services, SureHarvest, WFCF Organic, and Postelsia units, Where Food Comes From solutions are used to verify food claims, optimize production practices and enable food supply chains with analytics and data driven insights. In addition, the Company’s Where Food Comes From® retail and restaurant labeling program uses web-based customer education tools to connect consumers to the sources of the food they purchase, increasing meaningful consumer engagement for our clients.

*Note on non-GAAP Financial Measures

This press release and the accompanying tables include a discussion of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures provided as a complement to the results provided in accordance with generally accepted accounting principles (“GAAP”). The term “EBITDA” refers to a financial measure that we define as earnings (net income or loss) plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation and, when appropriate, other items that management does not utilize in assessing WFCF’s operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure. We have reconciled Adjusted EBITDA to GAAP net income in the Consolidated Statements of Income table at the end of this release. We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.

CAUTIONARY STATEMENT

This news release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Forward-looking statements are inherently uncertain, and actual events could differ materially from the Company’s predictions. Important factors that could cause actual events to vary from predictions include those discussed in our SEC filings. Specifically, statements in this news release about industry leadership, expectations for hardware sales to be uneven, expectations for profit growth over the long term, expectations for consumer trends to benefit the Company, potential to expand the Smart Catch program internationally, and demand for, and impact and efficacy of, the Company’s products and services on the marketplace are forward-looking statements that are subject to a variety of factors, including availability of capital, personnel and other resources; competition; governmental regulation of the agricultural industry; the market for beef and other commodities; and other factors. Financial results for 2023 and the Company’s pace of stock buybacks are not necessarily indicative of future results. Readers should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update its forward-looking statements to reflect new information or developments. For a more extensive discussion of the Company’s business, please refer to the Company’s SEC filings at www.sec.gov.

Company Contacts:

John Saunders
Chief Executive Officer
303-895-3002

Jay Pfeiffer
Director, Investor Relations
303-880-9000
jpfeiffer@wherefoodcomesfrom.com

Where Food Comes From, Inc.

Statements of Income (Unaudited)

	Three months ended September 30,						Nine months ended September 30,
(Amounts in thousands, except per share amounts)	2023			2022			2023			2022
Revenues:
Verification and certification service revenue	$	5,359		$	5,169		$	13,944		$	12,917
Product sales		1,221			1,588			3,130			3,473
Consulting revenue		431			508			1,330			2,362
Total revenues		7,011			7,265			18,404			18,752
Costs of revenues:
Costs of verification and certification services		3,123			2,900			8,055			7,261
Costs of products		681			826			1,804			1,885
Costs of consulting		341			359			1,030			1,899
Total costs of revenues		4,145			4,085			10,889			11,045
Gross profit		2,866			3,180			7,515			7,707
Selling, general and administrative expenses		1,920			2,106			5,741			5,697
Income from operations		946			1,074			1,774			2,010
Other income/(expense):
Dividend income from Progressive Beef		50			50			150			150
Gain on sale of assets		-			-			5			-
Impairment of digital assets		-			(42	)					(42	)
Loss on foreign currency exchange		(2	)		-			(6	)		(35	)
Other income, net		16			1			36			2
Interest expense		(1	)		-			(3	)		(2	)
Income before income taxes		1,009			1,083			1,956			2,083
Income tax expense		286			298			580			579
Net income	$	723		$	785		$	1,376		$	1,504

Per share - net income:
Basic	$	0.13		$	0.13		$	0.25		$	0.25
Diluted	$	0.13		$	0.13		$	0.24		$	0.25

Weighted average number of common shares outstanding:
Basic		5,599			5,936			5,605			6,019
Diluted		5,658			6,016			5,669			6,101

Where Food Comes From, Inc.

Calculation of Adjusted EBITDA*

(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
(Amounts in thousands)	2023		2022		2023		2022

Net income	$	723	$	785	$	1,376	$	1,504
Adjustments to EBITDA:
Interest expense		1		-		3		2
Income tax expense		286		298		580		579
Depreciation and amortization		153		191		488		583
EBITDA*		1,163		1,274		2,447		2,668
Adjustments:
Stock-based compensation		6		19		38		102
Impairment of digital assets		-		42		-		42
Cost of acquisitions		-		-		-		-
ADJUSTED EBITDA*	$	1,169	$	1,335	$	2,485	$	2,812

*Use of Non-GAAP Financial Measures: Non-GAAP results are presented only as a supplement to the financial statements and for use within management’s discussion and analysis based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader’s understanding of the Company’s financial performance, but non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided herein.

All of the items included in the reconciliation from net income to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company’s ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company’s operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company’s ability to generate free cash flow or invest in its business.

We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

Because not all companies use identical calculations, the Company’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company’s performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.

Where Food Comes From, Inc.

Balance Sheets

	September 30,			December 31,
(Amounts in thousands, except per share amounts)	2023			2022
Assets		(Unaudited)			(Audited)
Current assets:
Cash and cash equivalents	$	3,813		$	4,368
Accounts receivable, net of allowance		2,291			2,172
Inventory		1,120			888
Prepaid expenses and other current assets		495			463
Total current assets		7,719			7,891
Property and equipment, net		848			998
Right-of-use assets, net		2,379			2,607
Equity investments		1,191			991
Intangible and other assets, net		2,097			2,340
Goodwill, net		2,946			2,946
Deferred tax assets, net		508			523
Total assets	$	17,688		$	18,296

Liabilities and Equity
Current liabilities:
Accounts payable	$	722		$	640
Accrued expenses and other current liabilities		1,345			769
Deferred revenue		1,713			1,278
Current portion of finance lease obligations		13			9
Current portion of operating lease obligations		310			341
Total current liabilities		4,103			3,037
Finance lease obligations, net of current portion		44			37
Operating lease obligation, net of current portion		2,522			2,745
Total liabilities		6,669			5,819

Commitments and contingencies

Equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.001 par value; 95,000 shares authorized; 6,511 (2023) and 6,501 (2022) shares issued, and 5,574 (2023) and 5,775 (2022) shares outstanding		6			6
Additional paid-in-capital		12,232			12,145
Treasury stock of 937 (2023) and 727 (2022) shares		(10,184	)		(7,263	)
Retained earnings		8,965			7,589
Total equity		11,019			12,477
Total liabilities and stockholders’ equity	$	17,688		$	18,296

Exhibit 99.2

Where Food Comes From, Inc.

2023 Third Quarter Conference Call

Call date: Thursday November 9, 2023

Call time: 10:00 a.m. Mountain Time

Jay Pfeiffer – Investor Relations

Good morning and welcome to the Where Food Comes From 2023 third quarter earnings call.

Joining me on the call today are CEO John Saunders, President Leann Saunders, and Chief Financial Officer Dannette Henning.

During this call we’ll make forward-looking statements based on current expectations, estimates and projections that are subject to risk. Statements about current and future financial performance, growth strategy, customers, business opportunities, market acceptance of our products and services, and potential acquisitions are forward looking statements. Listeners should not place undue reliance on these statements as there are many factors that could cause actual results to differ materially from our forward-looking statements. We encourage you to review our publicly filed documents as well as our news releases and website for more information. Today we’ll also discuss Adjusted EBITDA, a non-GAAP financial measure provided as a complement to GAAP results. Please refer to today’s earnings release for important disclosures regarding non-GAAP measures.

I’ll now turn the call over to John Saunders.

John Saunders

Good morning and thanks for joining the call today.

As highlighted in our third quarter earnings release this morning, our core verification and certification revenue increased for both the third quarter and nine-month period despite continuing headwinds primarily associated with smaller herd sizes related to cyclical cattle trends.

These increases were offset by lower hardware revenue, which resulted in a decline in total revenue for both periods. You might remember that on our last call in August, I mentioned that headwinds were likely to persist for a while, so slightly lower overall revenue in Q3 was not a surprise.

Nevertheless, we continued to generate a lot of cash and deliver solid profitability in the quarter and year-to-date period. We also returned $855,000 in value to stockholders in the form of stock buybacks in the quarter with year-to-date buybacks totaling nearly $3.0 million. So, in the context of challenges we’ve been facing on multiple fronts in recent quarters, we’re pretty pleased with our overall performance and, as evidenced by our continued stock buybacks, confident in our future prospects.

Getting back to our verification and certification business, which is by far our largest revenue segment: We achieved 4% growth in the quarter and 8% growth through the first nine months of 2023. Within this segment, beef verification is the largest single component of revenue. As herd sizes have shrunk over the past year or so – due to a combination of drought impact and normal cattle cycles – our tag sales have declined as well.

So, as I said, the initial audit and tagging process is the first step in a revenue continuum that follows each animal along its path to the consumer. So, again, in the current environment of smaller herd sizes, there are fewer animals in the pipeline, and that, along with lower tag sales, is a big factor in why overall revenue was slightly lower year-to-date.

The good news is, we are steadily adding more cattle rancher customers and our audit activity is at an all-time high. We have a customer retention rate well over 90% that we believe is unmatched in our industry. In addition, because we now audit to dozens of standards, our revenue from non-cattle verification sources is also on the rise. This is something I like to highlight from time to time because the size and diversity of our services mix is what really sets us apart. We are unique in the depth and breadth of our service base, and that gives us an enormous competitive advantage that would be extremely hard, if not impossible, to duplicate.

Now for some more detail on our Q3 results…

Total revenue in third quarter declined 4% to $7.0 million from $7.3 million in the same quarter last year for reasons I’ve already detailed.

As previously noted, our flagship verification and certification revenue was up 4% in the quarter to $5.4 million from $5.2 million.

That increase was offset by product revenue that declined by $367,000 to $1.2 million from $1.6 million. Consulting revenue was $76,000 lower at $431,000.

Gross profit in the third quarter decreased to $2.9 million from $3.2 million.

SG&A expense was 9% lower year over year at $1.9 million vs. $2.1 million in the same quarter last year.

Net income was $723,000, or $0.13 per diluted share, compared to net income of $785,000, or $0.13 per diluted share, in Q3 a year ago.

Adjusted EBITDA in the third quarter was down slightly at $1.2 million from $1.3 million.

Turning to nine-month results…

Total revenue decreased 2% to $18.4 million from $18.8 million in the same period last year. In addition to the impact of smaller herd sizes and lower tag sales, this decline included the effect of a $0.9 million one-time consulting contract we booked in the first quarter of 2022 that skewed our year-over-year comparisons.

Revenue mix through nine months included:

●	Verification and certification services, up 8% to $13.9 million from $12.9 million.

●	Product revenue, down 10% to $3.1 million from $3.5 million.

●	Consulting revenue of $1.3 million compared to $2.4 million in the prior year period when we booked the aforementioned, one-time contract.

Gross profit through nine months was $7.5 million versus $7.7 million in the year-ago period.

SG&A expense was flat at $5.7 million.

Net income through nine months was $1.4 million, or $0.24 per diluted share, compared to net income of $1.5 million, or $0.25 per diluted share, in the same period last year. So, I’ll reiterate, we’re pleased with our overall profitability in light of some of the headwinds we’ve been dealing with.

Adjusted EBITDA through nine months was $2.5 million versus $2.8 million a year ago.

Our cash and cash equivalents balance at September 30, 2023, declined to $3.8 million from $4.4 million at 2022 year-end due primarily to our investment in share repurchases.

Further to that subject, on a year-to-date basis, we bought back more than $2.9 million of stock as we reduced our diluted share count by 432,000 to under 5.7 million shares.

Now I’d like to switch gears and provide an update on our Smart Catch program, which has been an important strategic focus for us this year.

Last week we announced the acquisition of the Smart Catch program with the intention of accelerating the rollout and expanding the scope of the program. To recap, Smart Catch was originally a program of the James Beard Foundation designed to promote transparency and sustainability in seafood at the restaurant level. Specifically, it is designed to link chefs to place-based seafood sustainability initiatives. Since inception, the program has been administered by our Postelsia division, and going forward, Postelsia will take the lead in driving our growth plan.

We announced the acquisition a couple of weeks ago in conjunction with our sponsorship of the LA Chef Conference, where we hosted a Sustainability Summit to discuss global sustainability trends. The news was well received by hundreds of chefs in attendance who, like other players in the food business, are paying a lot of attention to sustainability in response to broad interest by food consumers at both the restaurant and retail levels.

One thing we heard over and over in our discussions with chefs and other culinary influencers was the concept of evolving from “consumers to contributors.” In other words, there is a growing desire in the chef community to move beyond simply consuming food to actively participating in practices that contribute to higher levels of sustainability.

We see Smart Catch as being an important part of that process. It reinforces our mission of advocating for high food standards and facilitating the accessibility of responsible seafood choices for chefs and diners alike. We also see tremendous potential for expansion into other areas of the seafood supply chain, including food service institutions, retailers, seafood distributors, suppliers and producers around the world.

Although the current focus is on seafood, we, as well as the chef community, are interested in expanding the program to other products. So, overall, the LA Chef Conference was a great kickoff for us in our new role, and with dozens of similar conferences around the world every year, we see these types of events as excellent opportunities to market the program and grow our customer base.

So, with that, I’ll thank you again for joining the call today and open the call to questions. Operator…

Question and Answer Session:

Question 1: Raphi Savitz

Hey John. I think a few calls back you had referenced potential regulations that could drive increased demand for your tags. Just wanted to see where that stood and what sort of outlook is there?

John Saunders

Thanks Raphi for the question. There hasn’t been any significant movement other than the closure of a comment period the USDA put out to the public for comment and those results I think are being compiled. We hope to see something early next year in regard to the results, but they haven’t published anything yet.

Raphi Savitz

Got it. And then maybe big picture. You’ve been with this business and you’ve built this business for a number of years at this point. I guess, as you look to the future what are you most excited about?

John Saunders

Good question and it goes back and forth between things that are requiring attention immediately. I will tell you over the last 12 months what we’ve seen is an increased focus on sustainability. And I think where we’re seeing the most interest is what’s called Level 3 supply chain and valuations related to sustainability. Most specifically, the carbon footprint. I think that’s taking most of the headlines these days. So, we find ourselves right at the middle of that because we are the ones in charge of keeping track where the food comes from. So, it’s a core component and it’s foundational to most of the other attributes, but specifically, the carbon footprint of an animal has to start when that animal is born. So full traceability is a requirement of being able to manage whatever offsets or insets are being associated with that supply chain. And we find ourselves in the middle of a number of different pilot projects and programs that are under the USDA’s Climate-Smart program sheerly because we are the ones maintaining the traceability of the product.

Raphi Savitz

Got it. And any real change in competitive dynamics within auditing all of your tags?

John Saunders

Not really to speak of. I do think I spoke on our last call about the struggles we’re dealing with in finding talent and just keeping our auditor staff. We find that’s the number one limiting factor for us right now is just being able to identify qualified individuals that are able to handle the audits that we’re looking for.

Raphi Savitz

Got it. And just one last one if I can. Happy to see that you’ve been buying back stock this year. How do you think about your kind of capital allocation at this point?

John Saunders

Yes. As I mentioned many times, we are constantly looking for any type of M&A opportunity that does bode well with what we’re doing. And the Smart Catch program was one of those opportunities so investing quite a bit there. In lieu of those opportunities, we’re going to continue to look at our stock very, very aggressively and to continue to buy back in lieu of having other opportunities. But we still are looking at those Raphi so don’t think we’ve moved on from that. It’s just allocating the resources when we can and getting the best bang for our buck.

Operator

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.

Cover	Nov. 09, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 09, 2023
Entity File Number	001-40314
Entity Registrant Name	WHERE FOOD COMES FROM, INC.
Entity Central Index Key	0001360565
Entity Tax Identification Number	43-1802805
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	202 6th Street
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Castle Rock
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80104
City Area Code	(303)
Local Phone Number	895-3002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	WFCF
Security Exchange Name	NASDAQ
Entity Information, Former Legal or Registered Name	Not applicable