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DATE

Tuesday, Feb. 17, 2026 at 4:15 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Randy Fields
  • Chief Financial Officer — John Merrill
  • Vice President, Investor Relations — Jeff Stanlis
  • Chief Operating Officer — Guy Riegel

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TAKEAWAYS

  • Recurring Revenue Mix -- ReposiTrak (TRAK 0.24%) recurring SaaS revenue increased to over 98% of total, up from 62% in 2020.
  • Quarterly Revenue -- Revenue grew 7% to $5,900,000 from $5,500,000.
  • Quarterly Net Income -- GAAP net income reached $1,700,000, a 9% increase from $1,600,000.
  • Income from Operations -- Operating income rose 34% to $1,800,000 compared to $1,400,000.
  • Operating Expenses -- Total operating expenses declined 2%, including investments in RTN, cybersecurity, and product development.
  • SG&A Costs -- Increased 5% due to higher commissions, revenue-driven direct costs, insurance premiums, and employee benefit costs.
  • EPS Growth -- Diluted earnings per share increased 13% to $0.09, with basic EPS at $0.09 and diluted shares at 19,100,000.
  • Net Margin Expansion -- Net margin grew from 8% in 2020 to over 30% as of the current period.
  • Year-to-Date Revenue -- Fiscal YTD revenue rose 8% to $11,800,000 from $10,900,000.
  • Year-to-Date Net Income -- GAAP net income increased 9% to $3,500,000 from $3,200,000.
  • YTD EPS -- Diluted YTD EPS was $0.18, up 13% from $0.16; basic YTD EPS was $0.19.
  • Net Cash Position -- Total cash reached $28,700,000, up from $28,000,000 at June 30, with zero bank debt reported.
  • Buybacks and Dividends -- 80,000 common shares repurchased for $1,100,000 at an average price of $13.75 per share; the quarterly dividend increased 10% to $0.02 per share, the third consecutive annual increase since September 2022.
  • Preferred Stock Redemption -- 70,000 preferred shares redeemed for $750,000 during 2026; 196,000 preferred shares remain, with all redemptions targeted by December 2026.
  • Patent Filings -- Two new patents filed covering touchless traceability and automated error correction, increasing ReposiTrak's patent portfolio to nine.
  • Traceability Revenue Share -- Traceability accounts for "between 8–10%" of total revenue, due to cross-selling overlap.
  • AI-Driven Systems -- Over 500 proprietary error detection algorithms deployed, facilitating automated error correction in traceability data.
  • RTN Network -- The ReposiTrak Traceability Network queue exceeds the installed base, with significant onboarding backlog due to complexity of supplier data readiness.
  • Capital Allocation Policy -- Target stated as "return 50% of annual cash from operations to shareholders and putting the other half in the bank."
  • Tax Rate Guidance -- Management stated a "20% effective tax rate going forward" as net operating loss benefits have now expired.

SUMMARY

The transition to a nearly pure SaaS recurring revenue model, combined with disciplined expense management, resulted in material increases in margins and earnings per share. The company highlighted its differentiated traceability solution, underpinned by proprietary AI-driven error detection and correction, that addresses supplier data quality problems. Management signaled that the queue for joining its Traceability Network is substantial, with ramping industry urgency ahead of the FDA’s regulatory deadline potentially accelerating adoption and onboarding in coming quarters.

  • CEO Fields described the current traceability onboarding process as "much more difficult than anyone imagined," citing persistent supplier data error rates of "between 50–70%."
  • Management said, "incremental revenue does not require significant incremental expenses to support our growth," indicating operating leverage.
  • Randy Fields positioned its touchless traceability solution as offering "what might well be the only inexpensive and accurate way to do traceability" through AI automation.
  • Management reiterated that the fiscal year-end FDA traceability deadline is driving growing customer urgency, with adoption expected to accelerate as the deadline approaches.
  • Buyback authorization of $21,000,000 remains $6,700,000 unused as of December 31, 2025, supporting continued capital returns.
  • The company said it is "not just a traceability company," emphasizing continued expansion of compliance and supply chain product lines, with success in cross-selling multiple solutions to existing customers.

INDUSTRY GLOSSARY

  • RTN (ReposiTrak Traceability Network): A proprietary, SaaS-based traceability solution for tracking products and supplier data across the food supply chain.
  • EDI (Electronic Data Interchange): A standard digital protocol for exchanging business data electronically, referenced as insufficient for validating traceability data accuracy.
  • Touchless Traceability: ReposiTrak's patented automated system enabling end-to-end product tracking with minimal manual intervention, using AI-driven error detection and correction.
  • Net Cash: Total cash on balance sheet after deducting bank debt and leases, as specifically defined by management.

Full Conference Call Transcript

Thanks, Jeff, and good afternoon, everyone. As we reach the midpoint of fiscal 2026, it is important to reiterate our long-term strategy and provide performance metrics against those milestones. First, our goal was to convert all revenue streams largely to SaaS recurring revenue. Since 2020, we have converted over $7,000,000 in one-time revenue to recurring SaaS and increased our recurring revenue from 62% of total revenue to over 98%.

John Merrill: We have done this while simultaneously overcoming $2,000,000 in the elimination of high-touch, low-margin opportunities in order to make way for traceability. Next, pay down debt, keep expenses in check, and increase contribution margin. Since 2020, we have paid off over $6,000,000 in bank debt, and reduced annual operating expenses from roughly $19,000,000 to $16,000,000. Meanwhile, we have grown our net margin from 8% to north of 30% during the same period. Third, drive cash and return capital to shareholders. Since 2020, we have increased net cash by 16% compounded annual growth rate. Net cash means total cash on the balance sheet less bank debt and leases.

We have grown net cash from $13,700,000 in 2020 to almost $29,000,000 in 2025. Simultaneously, we have bought back over 2,200,000 shares of common stock, redeemed 640,000 shares of preferred stock, and increased the common stock dividend now three times by 10% each time over the previous three years. Finally, given our strong cash flow generation, we have invested heavily in our business. This quarter, the investments in our business involve three key initiatives. First, we continue to invest in our products. We are responding to customer pain points with new solutions. We are confident that these solutions will improve tracking accuracy and reduce operating costs for any customer with a warehouse.

Touchless traceability fits perfectly with our ReposiTrak traceability network solution, creating a comprehensive method for delivering end-to-end traceability. Second, we filed for two patents in the last few weeks, one for touchless traceability and a second for innovative method for identifying and automatically correcting errors in the data we integrate for customers. ReposiTrak, Inc. has not been shy about patenting our innovations. We have a portfolio of nine U.S. patents, and we are confident we will ultimately secure both these patents that are now in process. These patents serve as yet another moat around our business. Randy will add more color on touchless traceability and the patents in his section.

The inventions involved in these two patents and our innovation in general continues to revolutionize the industry. We have carefully observed what others in the space envision to address issues like traceability, and we know what has worked and what does not. We are confident that as our competitors recognize the optimal path forward, they will discover that we have patented the process and systems that make the correct approach possible. Third, we continue to invest in our systems and core software stack, adding artificial intelligence and modernized features and setting us up for improved operational efficiency.

Randy talked about this last quarter, and we do not anticipate meaningful increase in our cash expenses or capital expenditures related to this initiative. Let us get to the numbers. Second fiscal quarter revenue increased 7% from $5,500,000 to $5,900,000. Total operating expenses for the quarter were down 2% inclusive of investment in RTN, including wizard onboarding tools, more cybersecurity costs, database license fees, and other direct costs associated with development. We have reached a point where incremental revenue does not require significant incremental expenses to support our growth. SG&A costs for the quarter were up 5% due to higher commissions and direct costs associated with higher revenues, increased insurance premiums, and increases in employee benefit costs.

Income from operations was up 34% to $1,800,000 versus $1,400,000. GAAP net income for 2026 was $1,700,000, up 9% versus $1,600,000 last year. As previously communicated, the company is at the end of the benefit period from utilized and expiring net operating losses for both federal and state income tax. Accordingly, it is reasonable to assume a 20% effective tax rate going forward. GAAP net income to common shareholders increased 13% to $1,600,000 from $1,500,000. Earnings per share for the quarter was $0.09 basic and diluted. This is based on 18,200,000 basic shares outstanding and 19,100,000 shares diluted, resulting in a year-over-year EPS growth of 13% when factoring in higher income taxes.

Total cash increased to $28,700,000 from $28,000,000 at June 30. And the company continues to have zero bank debt. Fiscal 2026 year-to-date total revenue increased 8% from $10,900,000 to $11,800,000. Total operating expenses for the fiscal year-to-date were $8,100,000 versus $8,100,000 for the same period last year, essentially flat. Income from operations was up 31% for the fiscal year-to-date, $3,700,000 versus $2,800,000. GAAP net income increased 9% from $3,200,000 to $3,500,000. GAAP net income to common shareholders increased 13% from $3,000,000 in fiscal 2025 to $3,400,000 in the year-to-date period in fiscal 2026. Fiscal 2026 year-to-date earnings per share was $0.19 basic and $0.18 diluted.

This is a 13% increase when compared to $0.17 basic and $0.16 diluted for the same period last year. We are experiencing growth in all lines of business, while traditional sales of one service that solve one problem are growing, our cross-selling initiatives are delivering continued momentum. Again, our strategy has not changed. First and foremost, take exceptional care of the customer and execute flawlessly. Next, grow recurring revenue, increase profitability even faster, use cash to buy back common stock, redeem the preferred, and do it with no bank debt. At the same time, return capital to shareholders through a growing cash dividend.

Finally, we have and will continue to build cash on the balance sheet, close to $29,000,000 as of 12/31/2025. Continuing to bolster our balance sheet maintains our customers' confidence in our ability to be a durable partner in otherwise uncertain economic time. Common stock buyback. During 2026, the company repurchased roughly 80,000 common shares for a total of $1,100,000, an average of $13.75 per share. Since inception, the company has repurchased and canceled 2,220,000 common shares for $14,500,000 at an average price of $6.52 per common share. The company has approximately $6,700,000 remaining of the $21,000,000 total common share buyback authorization as approved by the board of directors and shareholders as of 12/31/2025. The company holds no treasury stock.

Common shares are repurchased and simultaneously canceled. Preferred stock redemption. During 2026, the company also redeemed 70,000 preferred shares at the stated redemption price of $10.70 per share for a total of $750,000. Since inception, the company has redeemed approximately 642,000 shares of preferred stock at the stated redemption price of $10.70 per share for a total of $6,900,000. We have 196,000 preferred shares left to redeem for a total of $2,100,000. At the current rate of redemption of $750,000 a quarter, I maintain our goal to redeem all the remaining preferred shares issued and outstanding on or before December 2026, if not earlier. The quarterly dividend.

On 12/19/2025, the board declared a quarterly dividend of $0.02 per share to shareholders of record as of 12/31/2025, payable on or about 02/14/2026. This represents the third 10% increase in the company's dividend since the dividend was established in September 2022. Subsequent dividends will be paid within 45 days of each fiscal quarter end. From time to time, the Board will evaluate our capital allocation strategy, making appropriate adjustments based on the approach most beneficial to all shareholders at that time. Our goal is to continue to return 50% of annual cash from operations to shareholders and putting the other half in the bank. I will now turn the call over to Randy Fields.

Randy Fields: Thanks, John. ReposiTrak, Inc. had an eventful quarter. Some of that shows in our numbers, but much of what we accomplished was behind the scenes. While we are delivering profitable growth from each of our solutions, we continue to add to the moat around our business, specifically the traceability business. The ReposiTrak traceability network, or RTN, is already the industry leader. The queue to join our network is much larger than our current installed base, and each new supplier, distributor, retailer adds the network effect of our RTN solution. It is fair to say, and we have said it before, that traceability for most suppliers is much more difficult than anyone imagined.

The difficulty affects suppliers and therefore, ultimately, impacts everyone upstream, downstream in the supply chain. It currently takes longer than we had hoped to work with suppliers to get them up to speed and consistently able to provide the information they need to be able to do traceability. I will elaborate on this in just a minute. Remember that no one has ever done traceability before. It is a new thing. It is a new activity, and it is one that requires complex process changes for everyone involved in the supply chain, end-to-end. As I mentioned, the primary issue with traceability continues to be the consistent accuracy of supplier data.

The error rate in data we initially received from suppliers, especially small suppliers, is somewhere between 50–70%. In case it is not obvious, if a supplier has inaccurate data,

Randy Fields: that data propagates through the supply chain. The grower's bad data becomes the distributor's bad data, which becomes the wholesaler's bad data, which becomes the retailer's bad data. That bad data becomes even worse if additional errors are introduced on another link in the supply chain, making the information even less reliable, if not completely unusable. So now the question is, how do you fix an error? Since the errors ripple through many, many systems, it is more difficult than you can imagine. Each company will have to manually fix its records, conceivably hundreds or thousands of error fixes every day. This is ultimately the Achilles' heel of track and trace: bad data.

Imagine the challenge this presents for a small family grower, most of whom do not even have an IT department. Now imagine the challenge for a large distributor, taking in thousands of shipments daily, each with a high error rate. Now imagine how a large retailer thinks about this if they need to hire dozens of employees just to trace down all of these different errors. It is just not going to happen. It would be cost prohibitive. Here is what is even stranger. Most people who are trying to think about traceability have no idea that this error problem even exists. The errors are not obvious and require knowledge and skill to detect, much less to correct.

For the most part, people who think about traceability are simply relying on something that is called electronic data interchange, or EDI, to gather their data. They are making the assumption that the data they are getting from suppliers is valid. Any approach—any approach—that relies on EDI alone to track data to the system is not detecting or validating for erroneous data. We have invested heavily over the years. Remember, this is not our first rodeo with supplier data. And we know that the data quality is poor at best. But you have to be able to detect the errors to know that.

Bad data is a disease that is difficult to detect but actually eats away at the core of traceability. Our competitors' approach to traceability has to go one of two ways. The first way is to trust the data, believing that EDI gives you accurate data. We have already said that it does not. All EDI does is to check the format and structure of data but does not validate the accuracy. It does not even check. EDI is just the envelope. It is sort of like the post office. It only deals with the outside of the envelope. The size, does it have the right postage, does it have a ZIP code—not the contents of the envelope.

We, on the other hand, deal with the content inside the envelope, which is a fundamentally different idea and the only one that ultimately leads to good data. Alternatively, the second approach expects the retailer/distributor to scan each and every case and have electronic data in addition when something comes into the warehouse or goes out of the warehouse. That is a nonstarter economically. ReposiTrak, Inc. has developed what might well be the only inexpensive and accurate way to do traceability. We use our artificial intelligence tools to do this.

It is extraordinarily robust and has the advantage that it not only identifies the errors, but it is able to correct them without bothering the supplier that created the data in the first place. This process is self-learning, and as a result, we are getting better and better all the time at finding the errors. We have over 500 error detection algorithms in our arsenal and we are growing the detection parameters day by day. Even more importantly, we can then correct most of them automatically and in near real time. This detect-and-correct process saves the grower money.

And the wholesaler sees a similar benefit, and the distribution center, and by the time the shipments and the data reach the retailer, the data is much, much, much, much cleaner. This error detection and correction process is a major time and money saver for our customers and produces an enormously more accurate data flow.

Jeff Stanlis: We enable compliance with the FDA regulations

Randy Fields: and simultaneously reduce costs for our customers, keeping food safe from the farm to the table. Nobody else can say that. We recently filed for two critical patents to secure our approach, what we call touchless traceability. We are confident these patents will create another wide and durable moat around the business. We needed to begin the patent protection process before we initiated sales, and that has been a bit of a short-term headwind. But our touchless traceability creates the most comprehensive end-to-end solution for traceability in the industry. Keep in mind that by year end, the FDA deadline will be getting very close, so we expect acceleration of onboarding and interest in our solution.

We are ready, and our patents position as well. But we are not just a traceability company. We continue to grow our industry-leading compliance and supply chain offerings even as we expand our RTN. Our focus over the past few quarters on cross-selling is now generating significant traction in our supply chain business. Success with one solution opens the door to adding another solution and so on and so forth. Since our software is built on a common platform, and the process of gathering data is similar across all the different functions, adding additional solutions is sufficient for both our customers and for us.

All of this ties back to why we remain confident in the future, even as AI impacts the SaaS industry. Companies that offer software but do not have proprietary data or proprietary process improvements are at risk from AI. That is obvious. If a problem is just an IT problem solved by software, well, then theoretically, businesses create their own software using AI. But ReposiTrak, Inc. is much, much more than just software. Software is just the delivery vehicle and only a part of the solution. In the short term, the AI craze may serve as a modest headwind for our business. Yes, AI will give the false impression to some companies that they can do it on their own.

In the long term AI cannot solve the problems that we solve for customers and the value we provide will become even clearer. This trend also aligns well with our recent focus on smaller customers as well as our IP strategy. The hubris of thinking you can develop all of your own software is primarily a big company obsession, not a small company obsession. Defending the inventions we have created around processes and data cleaning will further benefit our business in the long term. As I mentioned, the looming deadline from the FDA will be only eighteen months away by the calendar year end. That will naturally accelerate the need for traceability implementations.

That said, while we are investing in our business in the form of code refreshes, cross-selling initiatives, development, and patent work for our touchless traceability, we are also reducing our operating expenses. That we were able to lower our operating expenses while increasing revenue is a testament to industry-leading revenue per employee that we maintain. Efficiency is a key selling point of what we provide to our customers. And we mirror this focus on our own internal operations. Moreover, our transition to a SaaS model has reached the point where we no longer need to aggressively invest our own infrastructure to support our scale. Incremental revenue is disproportionately falling to the bottom line. And our contribution margin continues to increase.

It is all part of the model. So with that, I would like to now open the call for questions. Operator?

Thank you.: Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. And we will pause for just a moment while we poll for questions. And we will take a question from Thomas Forte with Maxim Group.

Thomas Forte: Great. So John and Randy, congrats on the quarter.

John Merrill: I have four, but as always, depending on your answers to these, I might have more

Randy Fields: Rainey, I have one warm-up question, and then I have three real humdingers. So the boring warm-up question, John, I think you said, or it is Brandy, that in fiscal 2025, traceability was only 8% of total revenue. Is there a more recent data point on how much total revenue is coming from traceability?

John Merrill: Who you who you aiming that at?

Thomas Forte: Yeah. Go ahead, John.

John Merrill: I mean, I would say it is between 8–10%, but it is hard because there is cross-selling.

Thomas Forte: Okay. Alright. So then, Randy, I will take the bait. Can AI improve the accuracy of traceability data?

Randy Fields: Well, the way we use AI, and have for a long time, it is really been part of what we do for many years. It absolutely does. The concept of LLMs, however, which is the current rage with AI, is a bit misleading. In other words, you have to detect what is wrong and how it got wrong to be able to fix it. I did not—there is three steps. I am sorry. Let me back up and see if I can make this clearer than I have. Most people who will try and do traceability will not even see that they have errors. It is not detectable by looking at it.

You actually have to have a deep database to check every field in every record and determine whether or not in the context of that record is it a correct

Guy Riegel: reference.

Randy Fields: So it is a little bit, as I mentioned earlier, it is a bit like the post office. You could have a note. Let us say, you sent a note to me. And that note said, Randy, I now believe that the earth is flat. Okay. Now you take that little note, you put it in an envelope, you lick it, put a stamp on it, take it to the post office. That is like EDI. Here is what the post office does, though. The post office looks at the size of the envelope and says, okay. That is a legal size envelope. It has enough postage.

It weighs it and checks the postage, and then it says it has got a ZIP code. Good to go. That is what EDI does. It is just the transport mechanism. Meanwhile, inside your envelope is an untrue statement. The earth is not flat. And therefore, it is not detectable in the context of EDI. We detect it. We have tested hundreds and hundreds, actually, since we—2,000,000 records now. We have tested about every combination and permutation of type of error that you can imagine. Step one is, can you see the errors? AI can help us with that. But here is where we have gone because we realized what a problem the errors themselves are.

If every day you were a supplier and you sent out a thousand files, and as we found, half of those are erroneous, half of them are erroneous, and we sent you a message and said, here is the 500 files that are wrong. Fix them. You would have to hire an army. Everybody would hire everyone they could find to check for errors and fix. So we have developed a way, again with AI, to not just detect the errors, but in essence, autocorrect them. So we are a little bit like spell check and auto-correction. And that is an enormous difference.

And our system is AI-based, but does not in any way rely on what today’s people would call a large language model. It is a different—it is AI for sure, but it is not large language model. Sorry. Long-winded answer, but hopefully, it was complete.

Thomas Forte: No. I appreciate the EDI and the post office comparison. Alright. So then this is one of those—Alright. So is there any impact to ReposiTrak, Inc. from MAHA?

Randy Fields: In a way—in a way, yes. Longer term, especially. Let us talk about what MAHA is. MAHA and organic are really a similar idea. Organic is an idea that lays on top of food safety, people think if they eat organic food, it is healthier for them. MAHA sits on top of all of that and says, in general, you should eat food that is healthy, whatever that would be, whole foods, not foods that have been ultra processed, without food colorings, etcetera. All of that lays on top of a looming problem, which is according to Gallup, there has been a long-term decline in the U.S. in terms of the public's belief in food safety.

Almost every year, people are believing less and less about the safety of food. So in a sense, what happens is MAHA, organic, etcetera, are causing people to worry more and more about the safety of what they eat. All of that awareness around safety is good for us, because it means that the economic cost, the brand equity cost to a retailer who makes a mistake is tremendous. So MAHA impacts us by virtue of increasing people's awareness of the issue of safety of food. It is really that simple.

Thomas Forte: Alright. So this would be my most related question to that one. So you have talked in the last couple of quarters about traceability on a by-ingredients basis. So if I go to Stew Leonard's and I buy prepared foods, can you—any update on thoughts there?

Guy Riegel: Well, we

Randy Fields: actually—and we actually are capable of doing that. In other words, companies can sign up with us and determine, if you will, at a shipment level, at a product level, do they have issues? But they can also use our system for specifications around ingredients. So within our system, you could say, wait a minute. If red dye number three is a problem, let me search all of the items that I sell that have red dye number three in it.

And that is an interesting problem because traceability—and the reason I will come back to it in a minute—the FDA has designated certain products, like products that contain nut butters, as being on their food traceability list, which you have to think about that for a moment. There is not a retail chain in the country that can tell you the products it has on the shelf that contain a nut butter.

Jeff Stanlis: Have no idea.

Randy Fields: Literally, no idea, because retailers do not maintain a list of ingredients, and they just cannot track them. Strangely enough, within our system, we have the capability of doing that. So over time, what we suspect happens is people move from being oriented toward the product and from the product, they will drop down to the ingredient. We are fully capable of doing that today.

Thomas Forte: Alright. And then this is one of those questions where I have no idea what your answer is. So these are fun ones. Alright. Does food inflation have a direct or indirect impact on your business? And I have three specific examples. Cocoa, coffee, and beef.

Randy Fields: The answer is indirectly. They do. To the extent that we are in a period where increasing cost to the supermarket—the inputs—cannot be passed on to the consumer, inevitably, supermarkets and everybody in that space has a margin squeeze, in which case, every element of cost, potentially including us, is something that they will look at.

Guy Riegel: So

Randy Fields: inflation without the ability to pass it on is problematic in general. And it is certainly something that we think about. We have not seen anything over the very short term. But that does not mean that it could not be something that pops itself up in the future.

Thomas Forte: Excellent. Alright. Two more. This one I will direct toward John. So, John, you talked about investment spending, but I am trying to understand how that showed up in your results. Because you have talked about how it seems that you reduced the amount of OpEx required. So where does that investment spending—where do I see that in the P&L?

John Merrill: So you would spend more in development, less in sales and marketing, but some of those things cover in both categories. So, because we spent less in marketing, but some of those people were utilized in development. You have to look at the totality of the expenses. You cannot look at necessarily the line items. So in aggregate, our spending is less. It is just more targeted resource spending. As we said before, as traceability becomes more top of mind, our laser focus is to spread the word on the marketing side. But, obviously, you know, we have done a lot as far as the marketing and the messaging, and we have now shifted it towards the development.

Jeff Stanlis: And that is not all. See it in line. You are—you are

John Merrill: see it in necessarily the line items. You have to look at the totality of expenses.

Thomas Forte: Yep. Thanks for that clarification. Are you capitalizing any of those costs?

John Merrill: There is some cost that—with the patent now, but it is a de minimis number.

Guy Riegel: Okay.

Thomas Forte: And then last question, unless you answer in a way that inspires me to ask a little more. Current thoughts on strategic M&A.

Guy Riegel: I mean, look. Randy and I say

John Merrill: see things every month, but we have so much on our plate right now. It is a

Guy Riegel: distraction.

John Merrill: You know, re-emphasizing our stack and our code base and traceability. You know, remember what Randy said, you know, while it may seem like it is, you know, two years out, at the end of this year, it is pretty—pretty is going to be right around the corner. We have got plenty on our plate to keep us busy. But, you know, of course, if the right opportunity came around, yes, we are acquisitive, but we have plenty on our plate at this moment. It—it—unless, Randy, you got a different opinion.

Randy Fields: Yeah. John, let me add something to that. As we take a look at the next twelve months, it is extremely likely that there will be, again, a flood of need and interest, etcetera, around traceability. Why? We think it takes a full two-plus years to get your entire supplier base traceability-ready and capable. We know that because we have been doing it. They said we already have nearly 2,000,000 records, and as far as I know, we are the only firm that is actually—you can come look at it—doing end-to-end traceability. We are tracking products going from a supplier into a distribution center into a retail store. And we create all of those records. We are doing it.

It is the real deal. It is pretty amazing. We have not tooted our own horn very much about that, but we will. But here is the issue. As people think about traceability, what they are going to be realizing very quickly is that they have now used up the runway that the FDA gave people when they gave them thirty months. It is now closer than it was. And by the end of this year, you will be at what we think is the “oh my god, you are at a cliff,” the eighteen-month mark. We do not think anybody that has hundreds of suppliers can be ready in eighteen months. We think it takes a full two years.

But people will shorten that and imagine that eighteen months is the magic number. So as this year progresses, and I would guess sometime in the summer or early fall, the world will once again wake up and go, yes. Traceability. Whoops. We need to get going. So we are really more in the mood of preparing for that than we are thinking about being acquisitive at the current moment.

Thomas Forte: Excellent. Thanks, Randy. Thanks, John.

Guy Riegel: Thank you. Thanks, Tom.

Operator: Thank you. That will conclude the question and answer session. I would now like to turn the floor back to Randy Fields for closing remarks.

Randy Fields: Okay. Well, we appreciate everybody taking the time this afternoon. Not much more to say. Have a good one. Talk to you soon. Take care.

Operator: Thank you. This does conclude today’s teleconference. We thank you for your participation. You may disconnect your lines at this time.