Where Food Comes From, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
WFCF$15.32-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001493152-25-022201
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001493152-26-022933
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 44 current paragraphs.
24 unchanged; 17 reworded; 3 added; 14 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Net cash used in investing activities for the three months ended March 31, 2026 was approximately $148,000 compared to $29,000 in the 2025 period. Net cash used in the period ending March 31, 2026 and 2025 was for purchases of equipment and increased expenditures towards capitalized software development costs.
Current report
Costs of verification and certification services for the three months ended March 31, 2026 and 2025 were approximately $2.7 million and $2.4 million, respectively or 61.5% of revenue compared to 57.3% of revenue in the comparable 2025 period. Our costs of verification and certification services are generally impacted by various costs such as salaries and benefits, insurance and taxes. The increase in the percentage of our costs of verification and certification services is primarily due to absorption of certain fixed costs of services over a reduction in revenue related to the beef side of our business. New customer growth helps offset the inflationary impacts on our margins, to some extent.
Current report
Other operating expenses for the three months ended March 31, 2026 and 2025 were approximately $1.6 million and $1.9 million, respectively. Our most significant operating expense includes salaries and benefits. The decrease in the 2026 period is primarily due to a decision by the executive management team to return the bonus amounts paid in late December 2025 which were based on previous internal projections that indicated strong fourth quarter revenue. These projections were made prior to the unexpected announcement that a large midwestern packing plant would cease operations, resulting in a negative impact to the Company’s fourth quarter 2025 revenue. Depreciation and amortization expense for the three months ended March 31, 2026 and 2025 were approximately $0.2 million.
Removed paragraphs (14)
Previous report
Environmental, Social and Governance (“ESG”) and Human Capital Resources
Previous report
ESG
Previous report
We take environmental and social responsibility very seriously. It’s the entire reason we spend day in and day out helping farmers, ranchers and brands around the world provide transparency to their consumers. Communicating authentic, sustainable, and traceable stories directly impacts our future.
Previous report
We believe that sound corporate governance is critical to helping us achieve our goals, including with respect to ESG. We continue to evolve a governance framework that exercises appropriate oversight of responsibilities at all levels throughout the company and manages its affairs consistent with high principles of business ethics. Our internal ESG Council is made up of leaders from across our company, and regularly works with our Executive Team, which oversees our ESG impacts, initiatives, and priorities.
Previous report
Net cash provided by investing activities for the nine months ended September 30, 2025 was approximately $1.7 million compared to cash used in investing activities of $0.1 million in the 2024 period. Net cash provided in the period ending September 30, 2025 was primarily from sale of the Company’s equity investment in Progressive Beef.
Previous report
Over the past several years, our growth has been funded primarily through cash flows from operations. We continually evaluate all funding options, including additional offerings of our securities to private, public and institutional investors and other credit facilities as they become available.
Previous report
The primary driver of our operating cash flow is our third-party verification solutions, specifically the gross margin generated from services provided. Therefore, we focus on the elements of those operations, including revenue growth, gross margin and long-term projects that ensure a steady stream of operating profits to enable us to meet our cash obligations. On a weekly basis, we review the performance of each of our revenue streams focusing on third-party verification solutions compared with prior periods and our operating plan. We believe that our various sources of capital, including cash flow from operating activities, and our ability to obtain additional financing, are adequate to finance current operations. We are not aware of any other event or trend that would negatively affect our liquidity. In the event such a trend develops, we believe that there are sufficient financing avenues available to us and from our internal cash-generating capabilities to adequately manage our ongoing business.
Previous report
Our plan for continued growth is primarily based on diversification and bundling opportunities in our product offerings within national and international markets, as well as, potential acquisitions. We believe that there are significant growth opportunities available to us because of growing consumer awareness and demand on a national level. Internationally, a quality verification program is often the only way to overcome import or export restrictions.
Previous report
Debt Facility
Previous report
The Company had a revolving line of credit (“LOC”) agreement which matured on April 12, 2025. The LOC provided for $75,080 in working capital. The interest rate was at the Wall Street Journal prime rate plus 1.50% and was adjusted daily. Principal and interest were payable upon demand, but if demand is not made, then annual payments of accrued interest only were due, with the principal balance due onmaturity. As of December 31, 2024, the effective interest rate was 9.0%. The LOC was collateralized by all the business assets of Where Food Comes From Organic, Inc. (“WFCFO”). As of December 31, 2024, there were no amounts outstanding under this LOC. The Company decided not to renew the LOC at April 12, 2025.
Previous report
Costs of verification and certification services for the three and nine months ended September 30, 2025 were approximately $3.3 million and $9.0 million, respectively, compared to $3.3 million and $8.8 million, respectively, for the same periods in 2024. Gross margin for the three months ended September 30, 2025 and 2024 was 39.7% and 40.1%, respectively, while the gross margin for the nine months ended September 30, 2025 and 2024 was 40.1% and 41.8%, respectively. Our costs of verification and certification services have increased due to increases in salaries and benefits, insurance and taxes.
Previous report
Other operating expenses for each of the three months ended September 30, 2025 and 2024 were approximately $2.0 million, respectively. Other operating expenses for the nine months ended September 30, 2025 and 2024 were approximately $5.6 million and $5.8 million, respectively. Our most significant operating expense includes salaries and benefits. The decrease in the 2025 period is due to savings in marketing and tradeshow costs, offset by increases in salaries and benefits. Some of the savings are due to timing, while some are due to a very disciplined approach in our marketing process. Depreciation and amortization expense for the three and nine months ended September 30, 2025 and 2024 were approximately $0.1 million and $0.5 million, respectively.
Previous report
For the three months ended September 30, 2025 and 2024, the Company received dividend income from Progressive Beef of $50,000, representing a distribution of their earnings. For the nine months ended September 30, 2025 and 2024, the Company received dividend income from Progressive Beef of $100,000 and $150,000, respectively, representing a distribution of their earnings.
Previous report
On July 22, 2025, the Company entered into a Redemption and Purchase Agreement (the “Agreement”) with Progressive Beef, LLC and BHS, LLC (the “Buyer”). Pursuant to the Agreement, the Buyer redeemed the 10% membership interests in Progressive Beef owned by the Company effective as of June 30, 2025, in exchange for approximately $1.8 million cash and the Buyer’s surrender of 12,585 shares of the Company’s common stock. The transaction resulted in approximately $0.9 million gain on the sale of our investment recorded in the Other Income/Expense section of the Consolidated Statement of Operations for the three months ended September 30, 2025.
Reworded paragraphs (17)
Previous wording
Where Food Comes From, Inc. and its subsidiaries (“WFCF,” the “Company,” “our,” “we,” or “us”) is a leading trusted resource for third-party verification of food production practices in North America. The Company estimates that is supports more than approximately 17,500 farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands, chefs and restaurants with a wide variety of value-added services provided through its family of verifiers, including IMI Global (“IMI”), Where Food Comes From Organic (“WFCFO”), and Validus Verification Services (“Validus”). In order to have credibility, product claims such as gluten-free, non-GMO, non-hormone treated, humane handling, and others require verification by an independent third-party such as WFCF. The Company’s principal business is conducting both on-site and desk audits to verify that claims being made about livestock, aquaculture, crops and other food products are accurate.
Current wording
Where Food Comes From, Inc. and its subsidiaries (“WFCF,” the “Company,” “our,” “we,” or “us”) is a leading trusted resource for third-party verification of food production practices in North America. The Company estimates that is supports more than approximately 17,500 farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands, chefs and restaurants with a wide variety of value-added services provided through its family of verifiers. In order to have credibility, product claims such as gluten-free, non-GMO, non-hormone treated, humane handling, and others require verification by an independent third-party such as WFCF. The Company’s principal business is conducting both on-site and desk audits to verify that claims being made about livestock, aquaculture, crops and other food products are accurate.
Previous wording
Finally, the Company’s Where Food Comes From Source Verified® retail and restaurant labeling program utilizes the verification of product attributes to connect consumers directly to the source of the food they purchase through product labeling and web-based information sharing and education. With the use of Quick Response Code (“QR”) technology, consumers can instantly access information about the producers behind their food.
Current wording
We also provide a wide range of professional consulting services that generate incremental revenue specific to the food and agricultural industry and drive sustainable value creation. Finally, the Company’s Where Food Comes From Source Verified® retail and restaurant labeling program utilizes the verification of product attributes to connect consumers directly to the source of the food they purchase through product labeling and web-based information sharing and education.
Previous wording
Our greatest asset is our people, and we continue to attract the best and brightest with our competitive pay and benefits package. As of September 30, 2025, we had 101 total employees, of which 91 were full-time employees. Approximately 84% of our workforce is comprised of female and other minority employees.
Current wording
Our greatest asset is our people, and we continue to attract the best and brightest with our competitive pay and benefits package. As of March 31, 2026, we had 96 total employees, of which 87 were full-time employees. Approximately 83% of our workforce is comprised of female and other minority employees.
Previous wording
Additionally, the cattle industry is cyclical by nature based on factors impacting current and future supplies such as drought-induced feedlot placements, higher cow and heifer slaughter, and lower auction receipts. The production lags inherent to this industry lead to long-lasting impacts of production decisions. For example, increased liquidation implies tighter supplies for next year. Similarly, times of herd expansion are typically a multi-year period. Historically, these cycles typically lasted approximately 10 years. The beginning of 2025 marks the eleventh year of the current cycle that began in 2014. We are currently in the contraction phase of the cycle after peaking in 2018-2019. How long we will continue to contract will be directly impacted by drought and pasture conditions.
Current wording
Additionally, the cattle industry is cyclical by nature based on factors impacting current and future supplies such as drought-induced feedlot placements, higher cow and heifer slaughter, and lower auction receipts. The production lags inherent to this industry lead to long-lasting impacts of production decisions. For example, increased liquidation implies tighter supplies for next year. Similarly, times of herd expansion are typically a multi-year period. Historically, these cycles typically lasted approximately 10 years. The beginning of 2026 marked the twelfth year of the current cycle that began in 2014. We are currently in the contraction phase of the cycle after peaking in 2018-2019. How long we continue to contract will be directly impacted by drought and pasture conditions.
Previous wording
At September 30, 2025, we had cash and cash equivalents of approximately $4.8 million compared to approximately $2.0 million at December 31, 2024. Our working capital at September 30, 2025 and December 31, 2024 was approximately $4.0 million and $2.4 million, respectively.
Current wording
At March 31, 2026, we had cash and cash equivalents of approximately $3.3 million compared to approximately $3.2 million at December 31, 2025. Our working capital at March 31, 2026 and December 31, 2025 was approximately $3.2 million.
Previous wording
Net cash provided by operating activities for the nine months ended September 30, 2025 was approximately $2.3 million compared to $2.8 million during the same period in 2024. Net cash provided by operating activities is driven by our net income and adjusted by non-cash items. Non-cash adjustments primarily include depreciation, amortization of intangible assets, fair market value gains and losses on digital assets, stock-based compensation expense, and deferred taxes. Fluctuations are primarily due to operating performance offset by the timing of cash receipts and cash disbursements. The cash provided by operating activities for the period ending September 30, 2025 decreased compared to the same period in 2024 primarily due to absorption of increasing costs of services over a slight reduction in revenue.
Current wording
Net cash provided by operating activities for the three months ended March 31, 2026 was approximately $0.5 million compared to $0.6 million during the same period in 2025. Net cash provided by operating activities is driven by our net income and adjusted by non-cash items. Non-cash adjustments primarily include depreciation, amortization of intangible assets, fair market value gains and losses on digital assets, stock-based compensation expense, and deferred taxes. Fluctuations are primarily due to operating performance offset by the timing of cash receipts and cash disbursements. The cash provided by operating activities for the period ending March 31, 2026 decreased compared to the same period in 2025 primarily due to absorption of certain fixed costs of services over a reduction in our professional services revenue.
Previous wording
Net cash used in financing activities for the nine months ended September 30, 2025 and 2024 was approximately $1.3 million and $2.5 million, respectively. Cash used for the period ending September 30, 2025, was primarily due to the repurchase of common shares under the Stock Buyback Plan. Cash used for the period ending September 30, 2024, was primarily due to the private purchase of stock and the repurchase of common shares under the Stock Buyback Plan.
Current wording
Net cash used in financing activities for the three months ended March 31, 2026 and 2025 was approximately $0.3 million and $0.4 million, respectively. Cash used for the periods ending March 31, 2026 and 2025, was primarily due to the repurchase of common shares under the Stock Buyback Plan.
Previous wording
The culmination of all our efforts has brought significant opportunities to us, including increased investor confidence and renewed interest in our company, as well as the potential to develop business relationships with long-term strategic partners. In keeping with our core business, we will continue to review our business model with a focus on profitability, long-term capital solutions and the potential impact of acquisitions or divestitures, if such an opportunity arises.
Current wording
Based on our current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months. We also have multiple opportunities to develop business relationships with long-term strategic partners. In keeping with our core business, we will continue to review our business model with a focus on profitability, long-term capital solutions and the potential impact of acquisitions or divestitures, if such an opportunity arises.
Previous wording
Three and nine months ended September 30, 2025 compared to the same period in fiscal year 2024
Current wording
Three months ended March 31, 2026 compared to the same period in fiscal year 2025
Previous wording
Verification and certification service revenues consist of fees charged for verification audits and other verification and certification related services that the Company performs for customers. Fees earned from our WFCF labeling program are also included in our verification and certification revenues as it represents a value-added extension of our source verification. We are recognized and utilized by numerous standard-setting bodies as an accredited verification or certification service provider. We enable food producers and brands to make certain claims on live animals or packaged food products by verifying that they are meeting the standards or guidelines associated with the claim(s) they are making. Verification and certification service revenue for the three months ended September 30, 2025 increased $0.1 million compared with the same period in 2024, while the nine month period decreased $0.1 million compared to the same period in 2024. We continue to experience new customer growth and bundling opportunities, while also seeing the negative impacts of revenue tied directly to price per head of cattle. We believe we are a low point of a contraction phase within the cattle cycle. However, rebuilding of the herd is impacted by many factors including drought conditions in different regions, the price of inputs and interest rates. The premiums for verified cattle remain strong in the marketplace above commodity cattle prices in spite of significant pressure on beef packer margins. Verified product attributes like animal care, sustainability and natural continued to be demanded and our programs allow supply chains to meet this growing customer demand.
Current wording
Verification and certification service revenues consist of fees charged for verification audits and other verification and certification related services that the Company performs for customers. Fees earned from our WFCF labeling program are also included in our verification and certification revenues as it represents a value-added extension of our source verification. Verification and certification service revenue for the three months ended March 31, 2026 increased $0.2 million compared with the same period in 2025. We continue to experience new customer growth and bundling opportunities, but offsetting some of this growth are supply-side dynamics within the cattle industry. The beef side of our business has been impacted the most significantly. We know the cattle industry is cyclical in nature and based on the data from the USDA, we appear to be at the bottom of a contraction phase within the cattle cycle, however, we are still seeing signs of further contraction in the cattle industry in early 2026. We are also facing rapidly changing trade and tariff uncertainties. Because of the tight cattle supply, ranchers are receiving the highest cattle prices per head in a decade without verification; and beef packers are reluctant to incur additional costs of verification to their supply chain because of the high costs of acquiring cattle for slaughter. To expand supply, herds must be rebuilt within the United States and via imports. But rebuilding of the herd takes time and is impacted by many factors including drought conditions in different regions, the price of inputs and interest rates. We are encouraged because premiums for verified cattle remain strong in the marketplace above commodity cattle prices in spite of significant pressure on beef packer margins. Verified product attributes like animal care, sustainability and natural continued to be demanded and our programs allow supply chains to meet this growing customer demand. We are also optimistic about the recent launch of our Raisewell Certified Standard, which was developed to meet growing consumer and retailer demand for responsibly raised proteins.
Previous wording
Our product sales are an ancillary part of our verification and certification services and represent sales of cattle identification ear tags. Product sales for the three and nine months ended September 30, 2025 decreased 9.6% and 0.5%, respectively, compared to the same periods in 2024.
Current wording
Our product sales are an ancillary part of our verification and certification services and represent sales of cattle identification ear tags. Product sales for the three months ended March 31, 2026 increased slightly by $11,000, compared to the same period in 2025. We continue to see some new customer growth, but our customers are ordering less tags due to smaller beef cow herd size. According to the USDA statistics, overall beef cow inventories have declined from 28.9 million head on January 1, 2023 to 27.6 million head on January 1, 2026.
Previous wording
Professional services revenue includes a wide range of professional consulting, data analysis, reporting and technology solutions that support our verification business and generate incremental revenue specific to the food and agricultural industry. Our professional services revenue stream is predominantly project based and not recurring in nature. Professional services revenue for the three and nine months ended September 30, 2025 decreased $35,000 and $0.1 million, respectively, compared to the same periods in 2024.
Current wording
Professional services revenue includes a wide range of professional consulting, data analysis, reporting and technology solutions that support our verification business and generate incremental revenue specific to the food and agricultural industry. Our professional services revenue stream is predominantly project based and not recurring in nature. Professional services revenue for the three months ended March 31, 2026 decreased less than $0.2 million, compared to the same period in 2025.
Previous wording
Costs of products for each of the three months ended September 30, 2025 and 2024 were approximately $0.8 million, respectively. Costs of products for the nine months ended September 30, 2025 and 2024 were approximately $1.8 million and $1.7 million, respectively. We continue to experience inflationary price increases passed on to us by our manufacturers, while simultaneously, dealing with market conditions that foster a competitive environment for selling cattle ear tags.
Current wording
Costs of products for the three months ended March 31, 2026 and 2025 were approximately $0.4 million, or 61.4% of revenue compared to 61.0% of revenue in the comparable 2025 period. The increase in the percentage of our costs of products is primarily due to inflationary price increases passed on to us by our cattle ear tag manufacturers, while simultaneously, dealing with market conditions that foster a competitive environment for selling cattle ear tags.
Previous wording
Costs of our professional services revenue for each the three months and nine months ended September 30, 2025 and 2024 were approximately $0.2 million and $0.7 million, respectively.
Current wording
Costs of our professional services revenue for the three months ended March 31, 2026 and 2025 was approximately $0.2 million and $0.3 million, respectively.
Previous wording
The Company measures the digital assets at fair value with changes recognized in the Consolidated Statements of Income for each reporting period. For the three and nine months ended September 30, 2025, the Company recorded an unrealized gain of approximately $48,000 and $144,000, respectively.
Current wording
The Company measures the digital assets at fair value with changes recognized in the Consolidated Statements of Income for each reporting period. For the three months ended March 31, 2026 and 2025, the Company recorded an unrealized loss of approximately $0.1 million.
Previous wording
The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. For the three months ended September 30, 2025 and 2024 we recorded an income tax expense of approximately $0.5 million and $0.2 million, respectively. For the nine months ended September 30, 2025 and 2024 we recorded an income tax expense of approximately $0.7 million and $0.5 million, respectively.
Current wording
The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. For the three months ended March 31, 2026, we recorded income tax expense of approximately $93,000 compared to income tax expense of $38,000 for the same period in 2025.
Previous wording
As a result of the foregoing, net income attributable to WFCF shareholders for the three months ended September 30, 2025 was approximately $1.1 million and $0.22 per basic and diluted common share, compared to net income of approximately $0.5 million and $0.09 per basic and diluted common share for the same period in 2024. Net income attributable to WFCF shareholders for the nine months ended September 30, 2025 was approximately $1.7 million and $0.34 per basic and diluted common share, compared to net income of approximately $1.2 million and $0.22 per basic share and $0.21 per diluted common share for the same period in 2024.
Current wording
As a result of the foregoing, net income attributable to WFCF shareholders for the three months ended March 31, 2026 was approximately $0.1 million and $0.02 per basic and diluted common share, respectively, compared to net income of approximately $31,000 and $0.01 per basic and diluted common share for the same period in 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We also primarily provide a wide range of professional services that support our verification activities and generate incremental revenue specific to the food and agricultural industry.