Greetings, and welcome to the Where Food Comes From, Second Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Pfeiffer, Investor Relations. Thank you, Jay. You may begin.

Good morning, and welcome to the Where Food Comes From 2024 second 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, future financial performance, growth strategy, customers, business opportunities, market acceptance of our business, 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 to 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.

Good morning, and thanks for joining the call today. Total revenue in the second quarter increased 4% to $6.4 million from $6.1 million. That included a 10% increase in verification and certification services, which grew to $5.3 million from $4.8 million year-over-year. Product revenue declined 13% to $0.8 million from $0.9 million, reflecting a trend that began last year when the impact of cyclical cattle trends resulting in smaller herd sizes began to manifesting in lower volumes of RFID tag sales. Professional services revenue also declined to $0.3 million from $0.4 million year-over-year. Gross profit in the second quarter increased to $2.7 million from $2.5 million. Selling, general and administrative expense increased to $2.1 million from $1.8 million, reflecting increased costs related to marketing, personnel and travel. On the subject of personnel costs, we continue to navigate a tight competitive labor market that is impacting us at both the gross profit and SG&A levels. The higher SG&A more than offset improved gross profit and resulted in a decline in operating income to $0.6 million from $0.7 million. That in turn led to an 8% decline in net income to $489,000 from $532,000. Diluted EPS remained at $0.09 a share. Adjusted EBITDA in the second quarter was at 8% lower to $0.8 million versus $0.9 million. And finally, we continued our share buyback program in the second quarter, repurchasing 33,347 shares of stock at a cost of $389,000. Turning to 6-month results. Total revenue through 6 months increased 5% to $12 million from $11.4 million in the prior year. Revenue mix included verification and certification services, up 13% to $9.7 million from $8.6 million. Product revenue, down 19% to $1.6 million from $1.9 million; and professional services revenue of $0.7 million compared to $0.9 million. Gross profit at midyear was $5…

[Operator Instructions] Our first question comes from the line of Chris Brown with Oake Financial. Please proceed with your question.

Thank you very much. Back in – I think it was about the end of 2022, you talked about the USDA’s intention to mandate RFID tags associated with the ADT program. It’s my understanding that the final rule passed this spring and implementation is happening this fall. I was wondering, three kind of general questions. How it’s impacting your business to-date? What you are kind of doing internally to take advantage or adapt to that new environment and then kind of how you see it playing out over the next year or so? Thank you.

Great question. You are correct, the final rule came into play this spring and this fall is when the implementation will begin. We have already seen a lot of the impacts of this, Chris. Some of them have been related to transition of existing customers to use what we call 840 identification devices, which are compliant on a country code and compliant with ADT. So, we have had a strong migration of a lot of our customers to the 840 tags, as we call them. So, probably the only real impact that we have seen so far, and this has been compounding with our – with the smaller herd sizes, is that there has been a great deal of subsidizing of tags to the industry. So, either through animal health officials or through other government or state affiliations, producers are able to get tags for free. As you – I am sure have seen, in lieu of or in spite of the fact that the ruling has come into place, our tag revenue continues to stay flat or to decline a little bit. And that is relative to two things, as we talked about. One is the decline in the herd sizes. But also, that the government is giving quite a few tags away to producers, which is why you also see our verification revenue continuing to increase. So, the way that we have been adjusting to it, Chris, is we have been preparing for a wave of free tags that were going to go into the industry, where we are actually charging those ranchers and farmers for those tags. They were going to have an opportunity to get those tags for free. So, what we are allowing our producers to do is to bring those tags into our system…

Thank you. There are no further questions at this time. I would like to turn the floor back over to John for any closing remarks.

Once again, I want to thank you for your time and your support, and we look forward to talking to you in three months. Have a great day.

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