# Where Food Comes From, Inc.: Form 10-Q for the period ended Jun 30, 2023

- Company: [Where Food Comes From, Inc.](/companies/wfcf.md) (CIK 1360565)
- Form: 10-Q
- Filed: 2023-08-10
- Accepted by EDGAR: Aug 10, 2023, 16:56 ET
- Period: 2023-06-30
- Accession: 0001493152-23-027489
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1360565/000149315223027489/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1360565/000149315223027489/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $6.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2023-01-01 to 2023-06-30 | $11.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-04-01 to 2023-06-30 | $3.6m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2023-01-01 to 2023-06-30 | $6.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-04-01 to 2023-06-30 | $2.5m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2023-01-01 to 2023-06-30 | $4.6m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2023-04-01 to 2023-06-30 | $1.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2023-01-01 to 2023-06-30 | $3.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | $673.0k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-01-01 to 2023-06-30 | $828.0k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-04-01 to 2023-06-30 | $1.0k | us-gaap:InterestExpense |
| Interest expense | 6 months, 2023-01-01 to 2023-06-30 | $2.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $204.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-01-01 to 2023-06-30 | $294.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | $532.0k | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | $653.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.09 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.11 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.09 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.12 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 5,735,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-30 | 5,760,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | $1.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-01-01 to 2023-06-30 | $27.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2023-01-01 to 2023-06-30 | $2.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-06-30 | $3.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $7.5m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $17.7m | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $3.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-06-30 | $6.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-06-30 | $11.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 23,670 characters.

### General

This information should be read in conjunction with the consolidated financial statements and the notes included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Form 10−K for the fiscal year ended December 31, 2022. The following discussion and analysis includes historical and certain forward−looking information that should be read together with the accompanying consolidated financial statements, related footnotes and the discussion below of certain risks and uncertainties that could cause future operating results to differ materially from historical results or from the expected results indicated by forward−looking statements.

### Business Overview

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 it 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.

Through SureHarvest Services LLC (“SureHarvest”) and Postelsia Holdings, Ltd. (“Postelsia”), we primarily provide a wide range of professional services and technology solutions that generate incremental revenue specific to the food, agricultural and aquaculture industries 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. With the use of Quick Response Code (“QR”) technology, consumers can instantly access information about the producers behind their food.

WFCF was founded in 1996 and incorporated in the state of Colorado as a subchapter C corporation in 2006. The Company’s shares of common stock trade on the NASDAQ Capital Market (“NASDAQ”), under the stock ticker symbol, “WFCF.”

The Company’s original name – Integrated Management Information, Inc. (d.b.a. IMI Global) – was changed to Where Food Comes From, Inc. in 2012 to better reflect the Company’s mission. Early growth was attributable to source and age verification services for beef producers that wanted access to markets overseas following the discovery of “mad cow” disease in the U.S. Over the years, WFCF has expanded its portfolio to include verification and software services for most food groups and over 50 programs and organizations. This growth has been achieved both organically and through the acquisition of other companies.

### Pandemics, the Inflationary Environment and other Weather Related Risks

We continue to monitor risks related to pandemics, inflation and weather, as well as other risks closely and will react accordingly, while keeping the interest of our customers, employees and shareholders in mind. Please refer to our risk factors included in our Form 10-K for the fiscal year ended December 31, 2022 for additional information related to all of our risks.

### Environmental, Social and Governance (“ESG”) and Human Capital Resources

#### ESG

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.

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 presents to our Executive Team, which oversees our ESG impacts, initiatives, and priorities.

#### Human Capital Resources

Our greatest asset is our people, and we continue to attract the best and brightest with our competitive pay and benefits package. As of June 30, 2023, we had 89 total employees, of which 82 were full-time employees. Approximately 75% of our workforce is comprised of female and other minority employees.

We are committed to providing a workplace where our employees feel respected and appreciated. Our Human Resource department (“HR”) conducts a new hire orientation, so employees know whom to contact with questions or concerns. HR has an open door policy and is actively involved in driving culture and engagement alongside business leaders.

Our policies are designed to promote fairness and respect for everyone. We hire, evaluate, and promote employees based on their skills and performance. Everyone is expected to be trustworthy, demonstrate excellence in their performance, and collaborate with others. With this in mind, we will not tolerate certain behaviors. These include harassment, retaliation, violence, intimidation, and discrimination of any kind on the basis of race, color, religion, national origin, gender, sexual orientation, gender identity, gender expression, age, disability or veteran status.

To continue innovating, we must ensure we have a talented and engaged workforce with ample opportunity to contribute to our mission and grow professionally. We are focused on intentionally creating pathways to career opportunities across WFCF through strategic initiatives such as internships and leadership training.

At WFCF, our employees show up passionate about making a difference in the world and for each other. With a majority-minority workforce, empowering our employee resource groups to take charge in driving initiatives that attract, develop, and retain our passionate workforce is vital to our continued success.

### Seasonality

Our business is subject to seasonal fluctuations annually. Significant portions of our verification and certification service revenue is typically realized during late May through early October when the calf marketings and the growing seasons are at their peak.

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. These cycles typically last roughly 10 years. The beginning of 2023 marks the ninth 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.

Because of the seasonality of the business and cyclical nature of our industry, results for any quarter are not necessarily indicative of the results that may be achieved for any other quarter or for the full fiscal year.

### Liquidity and Capital Resources

At June 30, 2023, we had cash and cash equivalents of approximately $3.4 million compared to approximately $4.4 million at December 31, 2022. Our working capital at June 30, 2023 and December 31, 2022 was approximately $3.6 million and $4.9 million, respectively.

Net cash provided by operating activities for the six months ended June 30, 2023 was approximately $1.3 million compared to $2.3 million during the same period in 2022. 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, 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 June 30, 2023 was primarily driven by a change in inventory, prepaid expenses and other assets, accrued expenses and other current liabilities, and deferred revenue. The cash provided by operating activities for the period ending June 30, 2022 was primarily driven by a change in accrued expenses and other current liabilities and prepaid expenses and other assets.

Net cash used in investing activities for the six months ended June 30, 2023 and 2022 was approximately $0.2 million. Net cash used in the period ending June 30, 2023 was primarily related to our equity investment in BlueTrace. Net cash used in the period ending June 30, 2022 was primarily for the purchase of digital assets.

Net cash used in financing activities for the six months ended June 30, 2023 and 2022 was approximately $2.0 million and $1.1 million, respectively. Cash used for the periods ending June 30, 2023 and 2022, was primarily due to the repurchase of common shares under the Stock Buyback Plan.

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.

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, overall improvement in our performance, 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.

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.

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.

### Debt Facility

The Company has a revolving line of credit (“LOC”) agreement which matures April 12, 2025. The LOC provides for $75,080 in working capital. The interest rate is at the Wall Street Journal prime rate plus 1.50% and is adjusted daily. Principal and interest are payable upon demand, but if demand is not made, then annual payments of accrued interest only are due, with the principal balance due upon maturity. As of June 30, 2023 and December 31, 2022, the effective interest rate was 9.75% and 9.0%, respectively. The LOC is collateralized by all the business assets of Where Food Comes From Organic, Inc. (“WFCFO”). As of June 30, 2023, and December 31, 2022, there were no amounts outstanding under this LOC.

### Off-Balance Sheet Arrangements

As of June 30, 2023, we had no off-balance sheet arrangements of any type.

### RESULTS OF OPERATIONS

Three and six months ended June 30, 2023 compared to the same period in fiscal year 2022

The following table shows information for reportable operating segments (amounts in thousands):

| Assets: | Three months ended June 30, 2023 Verification and Certification Segment | Consulting Segment | Eliminations and Other | Consolidated Totals | Three months ended June 30, 2022 Verification and Certification Segment | Consulting Segment | Eliminations and Other | Consolidated Totals |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Goodwill | $1,947 | $999 | $- | $2,946 | $1,947 | $999 | $- | $2,946 |
| All other assets, net | 6,249 | 2,660 | 5,819 | 14,728 | 14,244 | 3,865 | (143) | 17,966 |
| Total assets | $8,196 | $3,659 | $5,819 | $17,674 | $16,191 | $4,864 | $(143) | $20,912 |
| Revenues: |  |  |  |  |  |  |  |  |
| Verification and certification service revenue | $4,779 | $- | $- | $4,779 | $3,964 | $- | $- | $3,964 |
| Product sales | 938 | - | - | 938 | 878 | - | - | 878 |
| Consulting revenue | - | 409 | - | 409 | - | 489 | - | 489 |
| Total revenues | $5,717 | $409 | $- | $6,126 | $4,842 | $489 | $- | $5,331 |
| Costs of revenues: |  |  |  |  |  |  |  |  |
| Costs of verification and certification services | 2,736 | - | - | 2,736 | 2,325 | - | - | 2,325 |
| Costs of products | 555 | - | - | 555 | 522 | - | - | 522 |
| Costs of consulting | - | 329 | - | 329 | - | 354 | - | 354 |
| Total costs of revenues | 3,291 | 329 | - | 3,620 | 2,847 | 354 | - | 3,201 |
| Gross profit | 2,426 | 80 | - | 2,506 | 1,995 | 135 | - | 2,130 |
| Depreciation & amortization | 120 | 43 | - | 163 | 149 | 48 | - | 197 |
| Other operating expenses | 1,599 | 71 | - | 1,670 | 1,561 | 59 | - | 1,620 |
| Segment operating income/(loss) | $707 | $(34) | $- | $673 | $285 | $28 | $- | $313 |
| Other items to reconcile segment operating income (loss) to net income/(loss): |  |  |  |  |  |  |  |  |
| Other income / (expense) | 65 | (2) | - | 63 | 50 | (23) | - | 27 |
| Income tax expense | - | - | (204) | (204) | - | - | (118) | (118) |
| Net income/(loss) | $772 | $(36) | $(204) | $532 | $335 | $5 | $(118) | $222 |

23

| Assets: | Six months ended June 30, 2023 Verification and Certification Segment | Consulting Segment | Eliminations and Other | Consolidated Totals | Six months ended June 30, 2022 Verification and Certification Segment | Consulting Segment | Eliminations and Other | Consolidated Totals |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Goodwill | $1,947 | $999 | $- | $2,946 | $1,947 | $999 | $- | $2,946 |
| All other assets, net | 6,249 | 2,660 | 5,819 | 14,728 | 14,244 | 3,865 | (143) | 17,966 |
| Total assets | $8,196 | $3,659 | $5,819 | $17,674 | $16,191 | $4,864 | $(143) | $20,912 |
| Revenues: |  |  |  |  |  |  |  |  |
| Verification and certification service revenue | $8,585 | $- | $- | $8,585 | $7,748 | $- | $- | $7,748 |
| Product sales | 1,909 | - | - | 1,909 | 1,885 | - | - | 1,885 |
| Consulting revenue | - | 899 | - | 899 | - | 1,854 | - | 1,854 |
| Total revenues | $10,494 | $899 | $- | $11,393 | $9,633 | $1,854 | $- | $11,487 |
| Costs of revenues: |  |  |  |  |  |  |  |  |
| Costs of verification and certification services | 4,932 | - | - | 4,932 | 4,361 | - | - | 4,361 |
| Costs of products | 1,123 | - | - | 1,123 | 1,059 | - | - | 1,059 |
| Costs of consulting | - | 689 | - | 689 | - | 1,540 | - | 1,540 |
| Total costs of revenues | 6,055 | 689 | - | 6,744 | 5,420 | 1,540 | - | 6,960 |
| Gross profit | 4,439 | 210 | - | 4,649 | 4,213 | 314 | - | 4,527 |
| Depreciation & amortization | 251 | 84 | - | 335 | 294 | 98 | - | 392 |
| Other operating expenses | 3,343 | 143 | - | 3,486 | 3,074 | 125 | - | 3,199 |
| Segment operating income/(loss) | $845 | $(17) | $- | $828 | $845 | $91 | $- | $936 |
| Other items to reconcile segment operating income (loss) to net income/(loss): |  |  |  |  |  |  |  |  |
| Other income / (expense) | 122 | (3) | - | 119 | 100 | (36) | - | 64 |
| Income tax expense | - | - | (294) | (294) | - | - | (281) | (281) |
| Net income/(loss) | $967 | $(20) | $(294) | $653 | $945 | $55 | $(281) | $719 |

### Verification and Certification Segment

Verification and certification service revenues consist of fees charged for verification audits and other verification 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 and six months ended June 30, 2023 improved 20.6% and 10.8%, respectively, compared with the same periods in 2022. While our verification and certification service revenue continues to improve due to new customer growth and bundling opportunities, we believe we are at a low point of a contraction phase within the cattle cycle which negatively impacts revenue tied directly to price per head of cattle. We also believe inflationary pressure on packers, producers, growers, brands, and retailers is putting downward pressure on verified and certified foods as consumers have switched to lower priced food products. Finally, due to multiple severe cold weather systems that blasted through most of the United States in late March 2023, audits normally scheduled to be performed in late March 2023 were delayed until weather conditions improved.

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 six months ended June 30, 2023 increased 6.8% and 1.3%, respectively, compared to the same periods in 2022. Consistent with our verification and certification service revenue, our product sales continue to improve due to new customer growth, but we believe we are at a low point of a contraction phase within the cattle cycle which negatively impacts revenue tied directly to price per head of cattle. Revenue for product sales is recognized upon delivery of the goods to customer, at which point title, custody and risk of loss transfer to the customer.

Segment costs of revenues for the three and six months ended June 30, 2023 were approximately $3.3 million and $6.0 million, respectively, compared to approximately $2.8 million and $5.4 million, respectively, for the same periods in 2022. Gross margin for the three and six months ended June 30, 2023 was 42.4% and 42.3%, respectively, compared to 41.2% and 43.7%, respectively, in 2022. Our margins are generally impacted by various fixed costs such as cost of products, salaries and benefits, insurance and taxes. We continue to experience inflationary increases in the costs of products shipped and increases in compensation related costs due to a tight labor market impacting our margins. New customer growth helps offset some of the inflationary impacts on our margins, to an extent.

Other operating expenses for the three and six months ended June 30, 2023 increased by approximately 2.4% and 8.8%, respectively, compared to the same periods in 2022. The increase was primarily due to travel and marketing related expenses for physical attendance in company-wide on-site trainings, tradeshows and the Nasdaq Bell Ringing ceremony, all of which had been postponed for the past 2 years due to the COVID-pandemic.

### Consulting Segment

Consulting revenue primarily represents fees earned from a wide range of professional consulting services and technology solutions that support our verification business and generate incremental revenue specific to the food and agricultural industry. Our consulting revenue stream is predominately project based and not recurring in nature. Consulting revenue for the three and six months ended June 30, 2023 decreased approximately 16.3% and 51.5%, respectively, compared to the same periods in 2022. The 2022 periods included a significant short-term engagement with a Japanese party to promote Japanese seafood products into the American supply chain during 2022.

Costs of revenues for our consulting segment for the three and six months ended June 30, 2023 was approximately $0.3 million and $0.7 million, respectively, compared to approximately $0.4 million and $1.5 million, respectively for the same periods in 2022. Gross margin for the three months ended June 30, 2023 decreased to 19.6% compared to 27.6% for the same period in 2022. Gross margin for the six months ended June 30, 2023 improved to 23.4% compared to 16.9% for the same period in 2022. Because our consulting revenue is predominately project based, margins are greatly impacted by the timing of the project work and the fixed and/or variable labor necessary to complete the project. The 2022 margins were negatively impacted by an increased use of contract labor to support the short-term consulting engagement mentioned above.

In addition to advisory services, our consulting segment provides technology solutions as a platform to support data driven analysis. The information derived helps deliver meaningful insights for food and agriculture businesses, potentially leading up to third party certification. While our consulting segment is not a significant contributor to our bottom line, we believe it is a valuable service offering to support all aspects of food and agriculture. It also helps further diversify our business, strengthen our position, and understand trends in the food, agriculture, and aquaculture industries.

### Dividend Income from Progressive Beef

For the three and six months ended June 30, 2023 and 2022, the Company received dividend income of $50,000 and $100,000, respectively, from Progressive Beef representing a distribution of their earnings.

### Income Tax Expense

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 and six months ended June 30, 2023, we recorded income tax expense of approximately $204,000 and $294,000, respectively, compared to income tax expense of $118,000 and $281,000 for the same periods in 2022.

### Net Income and Per Share Information

As a result of the foregoing, net income attributable to WFCF shareholders for the three and six months ended June 30, 2023 was approximately $0.5 million and $0.7 million, respectively, and $0.09 and $0.12, respectively, per basic share and $0.09 and $0.11, respectively, per diluted common share. Compared to net income of approximately $0.2 million and $0.7 million, respectively, and $0.04 and $0.12, respectively, per basic and diluted common share for the same periods in 2022.

## Controls and procedures

As filed, 2,239 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, including our principal executive and financial officers, have conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures,” as such term is defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act, to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. We believe that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

### Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and can only provide reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There have not been any other changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 746 characters.

Our business is subject to a number of risks, including those identified in Item 1A. — “Risk Factors” of our 2022 Annual Report on Form 10−K, that could have a material effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. As of June 30, 2023, the Company recognizes matters specific to pandemics, the inflationary environment and weather-related risks may have a continued economic impact on the Company, but management does not know and cannot estimate what the long-term financial impact may be. We may also disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Filed Aug 10, 2023.
Source: SEC EDGAR, the filing index for accession 0001493152-23-027489. Last ingested by Listed: Oct 24, 2026, 15:11 ET. No prices; not investment advice.