Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 05, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Where Food Comes From, Inc. | ||
Entity Central Index Key | 0001360565 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Season Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity's Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 20,218,833 | ||
Entity Common Stock, Shares Outstanding | 6,137,609 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 4,374 | $ 2,638 |
Accounts receivable, net of allowance | 2,508 | 2,515 |
Short-term investments in certificates of deposit | 258 | |
Prepaid expenses and other current assets | 592 | 450 |
Total current assets | 7,474 | 5,861 |
Property and equipment, net | 1,616 | 1,545 |
Operating lease right-of-use assets | 3,030 | 3,268 |
Investment in Progressive Beef | 991 | 991 |
Intangible and other assets, net | 2,948 | 3,248 |
Goodwill, net | 2,946 | 2,946 |
Deferred tax assets, net | 443 | 378 |
Total assets | 19,448 | 18,237 |
Current liabilities: | ||
Accounts payable | 649 | 1,023 |
Accrued expenses and other current liabilities | 599 | 674 |
Deferred revenue | 1,132 | 797 |
Current portion of long term debt | 463 | |
Current portion of finance lease obligations | 13 | 8 |
Current portion of operating lease obligations | 268 | 239 |
Total current liabilities | 3,124 | 2,741 |
Long term debt, net of current portion | 572 | |
Finance lease obligations, net of current portion | 31 | 21 |
Operating lease obligation, net of current portion | 3,257 | 3,526 |
Total liabilities | 6,984 | 6,288 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; none issued or outstanding | ||
Common stock, $0.001 par value; 95,000 shares authorized; 6,456 (2020) and 6,451 (2019) shares issued, and 6,118 (2020) and 6,245 (2019) shares outstanding | 6 | 6 |
Additional paid-in-capital | 11,612 | 11,445 |
Treasury stock of 338 (2020) and 206 (2019) shares | (2,702) | (1,665) |
Retained earnings | 3,548 | 2,163 |
Total equity | 12,464 | 11,949 |
Total liabilities and stockholders' equity | $ 19,448 | $ 18,237 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 95,000,000 | 95,000,000 |
Common stock, issued | 6,456,000 | 6,451,000 |
Common stock, outstanding | 6,118,000 | 6,245,000 |
Treasury stock | 338,000 | 206,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||
Total revenues | $ 20,076 | $ 20,774 |
Costs of revenues: | ||
Total costs of revenues | 11,148 | 11,695 |
Gross profit | 8,928 | 9,079 |
Selling, general and administrative expenses | 7,241 | 7,527 |
Income from operations | 1,687 | 1,552 |
Other expense (income): | ||
Dividend income from Progressive Beef | (150) | (120) |
Gain on sale of assets | (18) | (9) |
Impairment of goodwill | 198 | |
Other income, net | (7) | (10) |
Exchange (gain) / loss | 2 | |
Interest expense | 13 | 10 |
Income before income taxes | 1,847 | 1,483 |
Income tax expense | 462 | 460 |
Net income | 1,385 | 1,023 |
Net loss attributable to non-controlling interest | 322 | |
Net income attributable to Where Food Comes From, Inc. | $ 1,385 | $ 1,345 |
Per share - net income attributable to Where Food Comes From, Inc.: | ||
Basic | $ 0.23 | $ 0.22 |
Diluted | $ 0.22 | $ 0.22 |
Weighted average number of common shares outstanding: | ||
Basic | 6,162,000 | 6,213,000 |
Diluted | 6,221,000 | 6,257,000 |
Verification and Certification Service Revenue [Member] | ||
Revenues: | ||
Total revenues | $ 14,254 | $ 15,564 |
Costs of revenues: | ||
Total costs of revenues | 7,407 | 8,444 |
Product Sales [Member] | ||
Revenues: | ||
Total revenues | 3,859 | 3,300 |
Costs of revenues: | ||
Total costs of revenues | 2,508 | 2,149 |
Software License, Maintenance and Support Services Revenue [Member] | ||
Revenues: | ||
Total revenues | 867 | 1,067 |
Costs of revenues: | ||
Total costs of revenues | 520 | 615 |
Software-Related Consulting Service Revenue [Member] | ||
Revenues: | ||
Total revenues | 1,096 | 843 |
Costs of revenues: | ||
Total costs of revenues | $ 713 | $ 487 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||
Net income | $ 1,385 | $ 1,023 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 997 | 1,097 |
Impairment of goodwill | 198 | |
Gain on sale of assets | (18) | (9) |
Stock-based compensation expense | 121 | 162 |
Deferred tax benefit | (65) | (98) |
Bad debt expense | 53 | 27 |
Effect of acquisition fair value adjustment | 41 | |
Changes in operating assets and liabilities, net of effect from acquisitions: | ||
Accounts receivable | (46) | (337) |
Short-term investments | 258 | (12) |
Prepaid expenses and other assets | (142) | (11) |
Accounts payable | (374) | 490 |
Accrued expenses and other current liabilities | (75) | 180 |
Deferred revenue | 335 | 142 |
Right of use assets and liabilities, net | (18) | 23 |
Net cash provided by operating activities | 2,452 | 2,875 |
Investing activities: | ||
Acquisition of non-controlling interest in SureHarvest Services, LLC, net of tax effect | (1,000) | |
Acquisition of Postelsia Holdings, Ltd. | (300) | |
Proceeds from sale of assets | 34 | 1 |
Purchases of property, equipment and software development costs | (464) | (369) |
Proceeds from maturity of short-term investments | 253 | |
Net cash used in investing activities | (730) | (1,115) |
Financing activities: | ||
Repayments of notes payable | (42) | |
Proceeds from long term debt | 1,030 | |
Proceeds from finance lease obligations | 24 | |
Repayments of finance lease obligations | (8) | (7) |
Proceed from stock option exercise | 5 | |
Stock repurchase under Stock Buyback Plan | (1,037) | (555) |
Net cash provided by / (used) in financing activities | 14 | (604) |
Net change in cash | 1,736 | 1,156 |
Cash at beginning of period | 2,638 | 1,482 |
Cash at end of period | $ 4,374 | $ 2,638 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total | |
Beginning balance at Dec. 31, 2018 | [1] | $ 6 | $ 11,052 | $ (1,110) | $ 818 | $ 10,766 |
Beginning balance, shares at Dec. 31, 2018 | [1] | 6,243,000 | ||||
Stock-based compensation expense | 162 | 162 | ||||
Acquisition of non-controlling interest in SureHarvest Services, LLC, net of tax effect | 231 | $ 231 | ||||
Acquisition of non-controlling interest in SureHarvest Services, LLC, net of tax effect, shares | 76,000 | |||||
Stock options exercised, shares | ||||||
Repurchase of common shares under Stock Buyback Plan | (555) | $ (555) | ||||
Repurchase of common shares under Stock Buyback Plan, shares | (80,000) | (80,000) | ||||
Vesting of restricted shares to Employees | ||||||
Vesting of restricted shares to Employees, shares | 6,000 | |||||
Net income attributable to Where Food Comes From, Inc. | 1,345 | 1,345 | ||||
Ending balance at Dec. 31, 2019 | $ 6 | 11,445 | (1,665) | 2,163 | 11,949 | |
Ending balance, shares at Dec. 31, 2019 | 6,245,000 | |||||
Stock-based compensation expense | 121 | 121 | ||||
Stock options exercised | 5 | $ 5 | ||||
Stock options exercised, shares | 5,000 | 5,000,000 | ||||
Repurchase of common shares under Stock Buyback Plan | (1,037) | $ (1,037) | ||||
Repurchase of common shares under Stock Buyback Plan, shares | (132,000) | (132,000) | ||||
Effect of acquisition fair value adjustment | 41 | $ 41 | ||||
Net income attributable to Where Food Comes From, Inc. | 1,385 | 1,385 | ||||
Ending balance at Dec. 31, 2020 | $ 6 | $ 11,612 | $ (2,702) | $ 3,548 | $ 12,464 | |
Ending balance, shares at Dec. 31, 2020 | 6,118,000 | |||||
[1] | The Balance at January 1, 2019 has been updated to reflect the impact of the 1-for-4 reverse stock split effective December 1, 2020. |
Consolidated Statement of Equ_2
Consolidated Statement of Equity (Parenthetical) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Reverse stock split | 1-for-4 reverse stock split | 1-for-4 reverse stock split |
The Company and Basis of Presen
The Company and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | Note 1 - The Company and Basis of Presentation Business Overview Where Food Comes From, Inc. is a Colorado corporation based in Castle Rock, Colorado (“WFCF”, the “Company,” “our,” “we,” or “us”). We are an independent, third-party food verification company conducting both on-site and desk audits to verify that claims being made about livestock, food, other high-value specialty crops and agricultural products are accurate. We care about food and other agricultural products, how it is grown and raised, the quality of what we eat, what farmers and ranchers do, and authentically telling that story to the consumer. Our team visits farms and ranches and looks at their plants, animals, and records, and compares the information we collect to specific standards or claims that farms and ranches want to make about how they are producing food. We strive to ensure that everyone involved in the food business - from growers and farmers to retailers and shoppers – can count on WFCF to provide authentic and transparent information about the food we eat and how, where, and by whom it is produced. We also provide sustainability programs, compliance management and farming information management solutions to drive sustainable value creation. We employ a software-as-a-service (“SaaS”) revenue model that bundles annual software licenses with ongoing software enhancements and upgrades and a wide range of professional services that generate incremental revenue specific to the food and agricultural industry. 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. Most of our customers are located throughout the United States. Basis of Presentation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Our consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired are included in the consolidated financial statements from the date of the acquisition. Except as specifically indicated, all information in this Annual Report on Form 10-K has been retroactively adjusted to give effect to a 1-for-4 reverse stock split that was effective on December 1, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents We place our cash with high quality financial institutions. At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit; however, we have not experienced any losses related to balances that exceed such FDIC insurance limits (currently $250,000), and we believe our credit risk is minimal. At times, we may also invest in short-term investments with original maturities of three months or less, which we consider to be cash and cash equivalents, since they are readily convertible to cash. Short-Term Investments in certificates of deposit Certificates of deposit with original maturities greater than three months and remaining maturities less than one year are classified as “short-term investments.” Revenue Recognition Verification and Certification Segment We offer a range of products and services to maintain identification, traceability, and verification systems. We conduct both on-site and desk audits to verify that claims being made about livestock, food, other high-value specialty crops and agricultural products are accurate. We generate revenue primarily from the sale of our verification solutions, consulting services and hardware sales. We sell our products and services directly to customers at various levels in the livestock and agricultural supply chains. Verification and certification service revenue primarily consists of fees charged for verification audits and other verification services that the Company performs for customers. A more detailed summary of our verification and certification services is included in the subsections below. Animal Verification and Certification Services Our animal verification and certification services contracts are generally structured in one of the following ways: (i) we commit to perform the required number of animal audits to verify a customer’s compliance with a standard or claim, or (ii) we commit to perform animal audit services at a fixed price by site or location type as requested by our customer during an annual period. These contract structures are discussed in more detail in the subsections below. Contract to Provide Required Number of Animal Audit Services For certain of our animal verification and certification services, we commit to perform the required number of location or site audits within our customer’s supply chain to verify customer’s compliance with a contractually-specified standard or claim. Each location or site audit is typically very short-term in nature, with a typical duration of one to two weeks. Upon completion of an audit, we provide the customer with an audit verification report for the specific site or location that was audited. Payment is made by customer upon completion of each site or location audit. We generally enter into revenue contracts with a one-year term. Our customers generally have the right to terminate the contract without prejudice with thirty days’ written notice. We have determined that, as a result of the termination provisions present in these contracts, the accounting contract term is a thirty-day period, with each thirty-day time increment representing a separate accounting contract under ASC 606. Furthermore, we have concluded that there is a single performance obligation that is a series comprised of each distinct location or site audit performed. Our customers are charged a standard daily rate for the provision of an audit based on the scale of site operations and geographical location. Consideration attributable to each audit within the series is variable, as the number of days required to complete each audit is not known until performance of that audit occurs. We have concluded that it is appropriate to allocate variable consideration (that is, the number of days required to complete an audit) to each audit within the series. This is because the consideration that we earn for each audit relates specifically to our efforts to transfer to our customer that discrete audit, and the resulting audit opinion or verification report, for that specified site or location, and this allocation is consistent with the allocation objective as defined in ASC 606. As a result, instances in which the Company evaluates and applies the constraint on variable consideration are immaterial. We further concluded that over-time recognition is appropriate because: (i) our performance of audits does not create an asset with an alternative use, as the audit and related verification report relates to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date. We utilize an input method to measure over-time progress of each audit within the series based on the number of audit days performed. We do, however, note that there are instances in which we only have an enforceable right to payment upon completion of an audit, and thus, over-time recognition is not permitted. For these contracts, revenue is recognized at the point in time at which an audit is completed. This does not result in a significant difference in the timing of revenue recognition (as compared to those audits that are recognized over time) due to the very short-term duration of an audit. Our customers may also have the option to purchase incremental review services (for example, an investigative audit or video review services) that are unrelated to the audit services to verify compliance with a specified standard or claim. The incremental review services are also typically very short-term in nature (that is, one to two weeks). We have concluded that these optional purchases do not reflect a material right under ASC 606 because the incremental review services are performed at standard pricing that would be charged to other similarly situated customers. Upon customer request for an incremental review service, we believe that our customer has made a discrete purchasing decision that should be treated as a separate accounting contract under ASC 606. We charge a fixed fee for the incremental review service, and thus, upon customer request, we are entitled to fixed consideration for that service under ASC 606. We concluded that over-time revenue recognition is appropriate for incremental review services because: (i) our performance of incremental review services does not create an asset with an alternative use because that review service, and the associated customer deliverable, relates to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date on incremental review services. We utilize a time-based input method to measure progress toward complete satisfaction of an incremental review service, which is based on the number of hours performed on the incremental review service relative to the total number of hours required to complete that review service. As previously mentioned, our incremental review services are typically completed within one to two weeks of a customer request. Contract to Provide Animal Audit Services at Customer Request Other animal verification and certification services contracts are structured such that we commit to perform audit services at a fixed price by site or location type as requested by our customer during an annual period. Performance of an audit typically occurs within a one to two-week period. We invoice our customer upon completion of an audit, and payment is due from customer within thirty days or less of receipt of invoice. Under this contract structure, the customer is, in effect, provided a pricing list for animal audit services, and pricing is effective over a one-year period. We have concluded that enforceable rights and obligations do not arise until a customer actually engages us to perform an audit service documented in the pricing list; therefore, each customer request represents a purchasing decision that is a separate accounting contract under ASC 606. We note that the termination provisions specified in our pricing lists vary. In certain instances, a customer may only have the right to terminate in the event of non-performance. Alternatively, in other contracts, a customer may have the right to terminate without prejudice at any time or with thirty days’ written notice. However, regardless of the termination provision specified, we have concluded that the accounting contract term is equal to the duration of the requested audit service (that is, the termination provisions generally do not affect the accounting contract term for each requested audit service). Upon a customer’s request for an audit service, consideration is fixed, as we charge the customer a fixed fee by audit type over the annual period per the pricing list. We concluded that over-time revenue recognition is appropriate for a requested audit service because: (i) our performance of the requested audit service does not create an asset with an alternative use as that audit, and the associated audit report, relate to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date on a requested audit. A time-based input method is utilized to measure progress toward complete satisfaction of an audit based on the number of hours performed on that audit relative to the total number of hours expected to be required to complete the audit. As previously mentioned, our audit services are typically completed within one to two weeks of a customer request. Other Considerations for Animal Certification and Verification Services In connection with the provision of on-site audits related to animal certification and verification services, reimbursable expenses are incurred and billed to customers, and such amounts are recognized on a gross basis as both revenue and cost of revenue. Any amounts collected on behalf of a third-party and remitted in full to that third-party are excluded from the transaction price and, thus, revenue. Crop and Other Processed Product Verification and Certification Services Third-party crop and other processed product audits are generally structured such that we commit to perform an independent audit to verify that food producers and/or farmers comply with certain standards. We generally provide verification services related to organic, Non-GMO and gluten-free standards. Depending on the crop or product type, verification audit activities may take two months to one year to complete. During this assessment period, various integrated audit activities and/or input reviews are performed in accordance with the regulations specified by the relevant standard. The fee structure is such that customers pay an annual assessment fee for a crop or other processed product to verify compliance with the specified standard. This fee is payable upfront on a nonrefundable basis. Our customers can typically terminate a crop or other processed product audit at any time without prejudice. However, given the nonrefundable upfront payment structure for the annual assessment service, we have concluded that the contract term is one year. We record the upfront payment made by the customer for the annual assessment service as deferred revenue. The audit activities and input reviews required in the provision of an annual assessment are not distinct under ASC 606, and consequently, we account for an annual assessment as a single integrated performance obligation. For certain of our third-party crop and other processed product audits, the annual assessment fee is fixed for the annual period. In other scenarios, the annual assessment fee may be variable due to increased review activities required for incremental inputs to a crop or processed product identified through the assessment process. At the time that an incremental input is identified, which generally occurs in the early stages of an annual assessment, the incremental consideration for the provision of review services related to that incremental input also becomes known. We allocate the transaction price derived from the annual assessment fee to the single integrated performance obligation for that annual assessment. Revenue related to the annual assessment is recognized over time in accordance with ASC 606. This is because the annual assessment service does not create an asset with an alternative use, as it relates to facts and circumstances that are specific to a customer’s crop or processed product. Further, we have an enforceable right to payment for performance completed to date on the annual assessment due to the nonrefundable upfront payment made by customer. We utilize an input method to measure progress toward satisfaction of the annual assessment based on the percentage of activities/phases or input reviews completed under the annual assessment. As it relates to the upfront payment for the annual assessment, we have utilized the practical expedient that exempts us from adjusting consideration for the effects of a significant financing component when we expect that the period between customer payment and the provision of the related service is one year or less. In certain contracts, an independent third-party inspection may be required for a site or location in our customer’s supply chain in accordance with the regulations for a specified standard. An inspection is performed by an independent third-party inspector, and the customer is charged an hourly rate for these inspection services. Under this scenario, a separate accounting contract arises upon initiation and performance of an inspection, and we typically invoice our customer for the inspection upon completion of the inspection service. Given that the customer has the ability to terminate at any time without prejudice, we have concluded that the contract term for each inspection ends as control of an inspection service transfers. Inspections are generally short-term in nature with a term ranging from a few days to two weeks. We have further determined that inspections are distinct from an annual assessment. Consideration attributable to an inspection is variable, as the inspector is only able to provide a high-level estimate of the cost of the inspection based on the inspector’s hourly rate until the inspector is at the relevant producer/supplier site to determine the time and level of effort required to complete the inspection. Given the very short-term nature of an inspection, variability related to an inspection generally resolves itself within a reporting period. However, we are typically required by certain regulations to provide an inspection cost estimate to our customer, and, if required, we utilize that estimate as our estimate of variable consideration. The cost estimate is generally derived from the cost to perform the prior-year inspection for that specific customer site or location or, when required, the historical cost to provide an inspection for a comparable site or location. In our experience, the historical cost of inspections has been predictive of the future cost of an inspection. Other Considerations for Crop and Other Processed Product Verification Services Reimbursable expenses incurred in the provision of an annual assessment or required inspection are billed to our customers, and such amounts are recognized on a gross basis as both revenue and cost of revenue. In addition, any amounts collected on behalf of a third-party and remitted in full to that third-party are excluded from the transaction price and, thus, revenue. Product Sales Product sales are primarily generated from the sale of cattle identification ear tags. Each customer purchase request represents a purchasing decision made by customer. As such, enforceable rights and obligations (and, thus, a separate accounting contract under ASC 606) arise at the time a customer submits its purchase request to us. At the time of request, we are entitled to fixed consideration, as the sales quantity and related price of the product is known. All of our customers are charged the same fixed price per tag. 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. We typically deliver product to the customer within a few days of customer’s sales request. At the time of delivery, we invoice our customer for the related product sales and record invoiced amounts to accounts receivable. Payment is typically due by customer upon receipt of invoice. In relation to our product sales, the sales taxes collected from customers and remitted to government authorities are excluded from revenue. Additionally, we do not typically provide right of return or warranty on product sales. Software Sales and Related Consulting Segment We predominately offer software products via a SaaS model, which is an annual subscription-based model. Support services are generally included in the subscription. We also provide web-hosting services on an annual basis to all of our customers in conjunction with their software subscription. Customers have the ability to terminate without prejudice upon thirty days’ written notice; however, the subscription fee, inclusive of maintenance and support services, and the web-hosting fee are paid upfront by the customer on a nonrefundable basis. Consequently, we have concluded that the contract term for the annual software subscription and web-hosting services is one year. We have determined that a software license subscription and the related hosting service should be accounted for as a service transaction, as we provide the functionality of our software through the hosting arrangement. The SaaS arrangement provides customers with unlimited access to our software and, thus, is accounted for as a series of distinct daily service periods that provide substantially the same service (that is, continuous access to the hosted software) each day during the annual contract term. Further, the provision of basic technical support services also represents a stand-ready obligation that is a series of distinct daily service periods that provide substantially the same service (that is, access to our technical support infrastructure) during the annual contract term. Because the basic technical support services and SaaS each represent performance obligations that are a series of distinct daily service periods, we have elected to combine these performance obligations. We are entitled to fixed consideration for the software license subscription, inclusive of support services, and the related hosting service. The software license subscription and hosting fees in our contracts represent the standalone selling price for that related service. This is because the fees charged for the software license subscription and hosting service represent the software license subscription and hosting service fees that are charged to other customers with a similar level of data loaded into the software (regardless of whether that customer contracts for professional services). Accordingly, the software license subscription and hosting fees are allocated to the combined SaaS performance obligation. We recognize revenue related to the SaaS arrangement over time because a customer simultaneously receives and consumes the benefit from the provision of access to the hosted software over the annual subscription period. Accordingly, we utilize a time-based output measure of progress that results in a straight-line attribution of revenue. That is, revenue related to the combined SaaS obligation should be recognized daily on a straight-line basis over the one-year subscription term, as this reflects the direct measurement of value to a customer of the provision of access to the software via hosting each day. As it relates to the upfront payment for the software subscription and hosting service, we have utilized the practical expedient that exempts us from adjusting consideration for the effects of a significant financing component when we expect that the period between customer payment and the provision of the related service is one year or less. In addition, we record the upfront payment made by customer for the annual assessment service as deferred revenue. In some of our SaaS contracts, we also provide software-related consulting services to our customers during an annual software subscription period. Consulting services fees are derived from a standard rate card by employee level, and we invoice for consulting services monthly on a time-incurred basis. Due to the termination provisions present in our SaaS contracts, our customers have an in-substance renewal decision each month for further consulting services (that is, via their decision not to terminate the contract each month). Accordingly, the contract term for consulting services is on a month-to-month basis within the annual subscription period. We have concluded that consulting services are distinct from the SaaS arrangement. To the extent that consulting services result in a software enhancement or new functionality, we have determined that those consulting services are still distinct because added features typically provide new, discrete capabilities with independent value to a customer and a customer accesses the SaaS in a single-tenant architecture. Further, additional features and functionality are often made available to a customer substantially after the “go-live” date of the software (via the hosting service). As a result, our software-related consulting services represent distinct performance obligations. We recognize revenue related to consulting services over time in accordance with ASC 606. This is because our performance does not create an asset with an alternative use, as consulting services, and, if applicable, any related software enhancements, are highly tailored to the farming industry specific to the given customer, and we have an enforceable right to payment, inclusive of profit, for performance completed to date. As a result, for our consulting services, we have elected to utilize the practical expedient that allows us to recognize revenue in the amount to which we have a right to invoice, as we believe that we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date for the provision of consulting services. Principal versus Agent Considerations Under certain of our verification and certification service contracts, a third-party inspector may be required to perform an independent inspection of a site or location within our customer’s supply chain in accordance with regulations of a certain standard or claim. In this scenario, we have concluded that we are the principal in the provision of inspection services to our customer, as we control the inspection service, and the related inspection report, before it is transferred to our customer. In accordance with this conclusion, we present revenue related to inspections on a gross basis, with customer payment for an inspection presented as revenue and the inspection cost paid to the third-party inspector presented as an expense. In addition, we utilize a third-party to provide web-hosting services in the provision of our SaaS arrangements. In this scenario, we are primarily responsible for fulfilling the promise to provide web-hosting services to the customer, and we establish the fee that the customer is charged for the web-hosting services. Consequently, we have also concluded that we are the principal in the provision of web-hosting services under our SaaS arrangements. As such, we present revenue on a gross basis, with consideration received from our customer for the web-hosting service recorded as revenue and the cost paid to the third-party to provide those web-hosting services recorded as an expense. Disaggregation of Revenue We have identified four material revenue categories in our business: (i) verification and certification service revenue, (ii) product sales, (iii) software license, maintenance and support services revenue and (iv) software-related consulting service revenue. Revenue attributable to each of our identified revenue categories is disaggregated in the table below (amounts in thousands). Year ended December 31, 2020 Year ended December 31, 2019 Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Revenues: Verification and certification service revenue $ 14,254 $ - $ - $ 14,254 $ 15,564 $ - $ - $ 15,564 Product sales 3,859 - - 3,859 3,300 - - 3,300 Software license, maintenance and support services revenue - 957 (90 ) 867 - 1,274 (207 ) 1,067 Software-related consulting service revenue - 1,120 (24 ) 1,096 - 948 (105 ) 843 Total revenues $ 18,113 $ 2,077 $ (114 ) $ 20,076 $ 18,864 $ 2,222 $ (312 ) $ 20,774 Transaction Price Allocated to Remaining Performance Obligations We generally enter into revenue contracts with a one-year term. In certain instances, we have concluded that our contract term is less than one year because: (i) the termination provisions present in the contract impact the contract term under ASC 606 or (ii) a contract under ASC 606 arises at the time our customer requests the provision of a good or service that is delivered within or over a few days to a couple of weeks. As a result of our short-term contract structures, we have utilized the practical expedient in ASC 606-10-50-14 that exempts us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Contract Balances Under our animal verification and certification services contracts, we invoice customers once the performance obligation for the provision of a site or location audit has been satisfied, at which point payment is unconditional. In addition, any product sales are invoiced upon delivery to the customer, at which point payment is also unconditional. Accordingly, our animal verification and certification services contracts do not give rise to a contract asset under ASC 606; rather, invoiced amounts reflect accounts receivable. Under our crop and other processed product verification and certification services, a nonrefundable payment for an annual assessment of compliance with a standard is typically made by our customers upfront upon contract execution. That is, payment is made in advance of the provision of annual assessment services. Accordingly, we recognize deferred revenue upon receipt of the upfront payment from our customers for crop and other processed product audit assessment services. Revenue is subsequently recognized, and the related deferred revenue is reduced, over the one-year period during which assessment services are provided to the customer using the over-time measure of progress selected in accordance with ASC 606. To the extent that an inspection is required during the annual assessment period, we invoice customers once the performance obligation for the inspection has been satisfied, at which point payment is unconditional. As such, inspection services give rise to accounts receivable. Our software subscriptions, web-hosting, and support services are paid by our customers upfront on a nonrefundable basis. That is, payment is made in advance of the provision of these services to our customers. As a result, we recognize deferred revenue upon receipt of the upfront payment from our customers for software subscriptions, web-hosting and maintenance and support services. Revenue is subsequently recognized, and the related deferred revenue is reduced, on a straight-line basis during the annual contract term that these stand-ready services are provided to customer. Software-related consulting services are invoiced monthly on a time-incurred basis, at which point we have an enforceable right to payment for those services. Because payment is unconditional upon invoicing, our software-related consulting services are reflected as accounts receivable. As of December 31, 2020 and 2019, accounts receivable from contracts with customers, net of allowance for doubtful accounts, were approximately $2.5 million. As of December 31, 2020 and 2019, deferred revenue from contracts with customers were approximately $1.1 million and $0.8 million, respectively. The balance of the contract liabilities at December 31, 2019 was recognized as revenue in 2020 and the balance at December 31, 2020 is expected to be recognized as revenue during 2021. The following table reflects the changes in our contract liabilities during the year ended December 31, 2020 and 2019: Deferred revenue (in thousands): 2020 2019 Deferred revenue January 1 $ 797 $ 655 Unearned billings 3,163 2,684 Revenue recognized (2,828 ) (2,542 ) Deferred revenue December 31 $ 1,132 $ 797 Cost of Revenues Salaries and related fringe benefits directly associated with our verification and certification service revenues are allocated to costs of verification and certification services. Costs of products primarily represents the cost of livestock ear tags generally used in connection with our verification programs. Livestock identification ear tags sold in connection with our verification offerings are purchased primarily from one supplier. However, there are numerous other companies which manufacture and market such ear tags. Costs of product support, including web-hosting fees, salaries and related fringe benefits directly associated with our software license, maintenance and support services, are allocated to costs of software license, maintenance and support services. Salaries and related fringe benefits directly associated with our software-related consulting revenues are allocated to costs of software-related consulting services. Accounts Receivable and Allowance for Doubtful Accounts Our receivables are generally due from trade customers. Credit is extended based on our evaluation of the customer’s financial condition, and generally collateral is not required. Accounts receivable are generally due approximately 30 days from the invoice date and are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts receivable that are outstanding longer than the contractual payment terms are considered past due. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss and payment history, the customer’s current ability to pay its obligations to us and the condition of the general economy and the industry as a whole. We write-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The allowance for doubtful accounts was approximately $63,000 and $76,000, at December 31, 2020 and 2019, respectively. No single customer accounted for greater than 10% of our accounts receivable balances at December 31, 2020 and 2019. Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosure, establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: ● Level 1: Quoted prices available in active markets for identical assets or liabilities; ● Level 2: Quoted pr |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 3 – Business Acquisitions SureHarvest Consulting, LLC On December 17, 2019 the Company exercised its option to acquire the remaining 40% membership interest in SureHarvest for $1.0 million in cash and 75,988 shares of common stock of WFCF valued at approximately $0.5 million based on the closing price of our stock on December 17, 2019 of $7.20 per share (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). The Additional Paid-In Capital amount reflected on the Consolidated Statement of Equity includes adjustments for deferred income tax of approximately $0.1 million and reversal of the previously recorded allocation of net losses attributable to the non-controlling interest of approximately $0.4 million. Postelsia Holdings, Ltd. On February 21, 2020 the Company acquired all of the stock of privately held Postelsia Holdings, Ltd. (“Postelsia”) for $0.3 million in cash. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 - Property and Equipment The major categories of property and equipment are as follows as of December 31st: (in thousands) 2020 2019 Automobiles $ 115 $ 115 Furniture and office equipment 529 539 Software and tools 1,876 1,449 Website development and other enhancements 184 184 Building and leasehold improvements 954 992 Land 1 2 3,659 3,281 Less accumulated depreciation 2,043 1,736 Property and equipment, net $ 1,616 $ 1,545 Total depreciation expense for the years ended December 31, 2020 and 2019 was approximately $0.4 million and $0.5 million, respectively. Depreciation expense for assets recorded under finance leases was approximately $8,000 and $22,000 for the years ended December 31, 2020 and 2019, respectively. |
Investment in Progressive Beef,
Investment in Progressive Beef, LLC | 12 Months Ended |
Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Investment in Progressive Beef, LLC | Note 5 - Investment in Progressive Beef, LLC On August 9, 2018, the Company purchased a ten percent membership interest in Progressive Beef, LLC (“Progressive Beef”). Where Food Comes From is the primary certifier for Progressive Beef. As of December 31, 2020 and 2019, the Company received dividend income of approximately $0.2 million and $0.1 million, respectively, from Progressive Beef representing a distribution of their earnings. The income is reflected within the “other (expense) income” section of the Company’s Consolidated Statement of Income for the years ended December 31, 2020 and 2019. The investment is accounted for as a financial instrument under ASC 321 and the Company has elected to apply the practical expedient to value the investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company completed a qualitative assessment and determined that there were no impairment indicators as of December 31, 2020 and 2019. |
Intangible and Other Assets
Intangible and Other Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible and Other Assets | Note 6 – Intangible and Other Assets The following table summarizes our intangible assets as of: December 31, December 31, Estimated 2020 2019 Useful Life Intangible assets subject to amortization (in thousands): Tradenames and trademarks $ 417 $ 417 2.5 - 8.0 years Accreditations 85 85 5.0 years Customer relationships 3,664 3,351 3.0 - 15.0 years Patents 970 970 4.0 years Non-compete agreements 121 121 5.0 years 5,257 4,944 Less accumulated amortization 2,795 2,182 2,462 2,762 Tradenames/trademarks (not subject to amortization) 465 465 2,927 3,227 Other assets 21 21 Intangible and other assets: $ 2,948 $ 3,248 We reviewed our long-lived assets for indicators of impairment in 2020 and 2019 and concluded in each year that no impairments exist. Amortization expense for each of the years ended December 31, 2020 and 2019 was approximately $0.6 million. As of December 31, 2020, future scheduled amortization of intangible assets is as follows (in thousands): Fiscal year ending December 31: 2021 $ 370 2022 357 2023 317 2024 306 2025 260 Thereafter 852 $ 2,462 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 7 – Goodwill Changes in the net carrying value of goodwill by segment are as follows (in thousands): Verification and Certification Segment Software Sales and Related Consulting Segment Consolidated January 1, 2019 $ 1,133 $ 2,011 $ 3,144 Impairment - (198 ) (198 ) December 31, 2019 $ 1,133 $ 1,813 $ 2,946 Transfer of assets 814 (814 ) - December 31, 2020 $ 1,947 $ 999 $ 2,946 Annual Impairment Test of Goodwill We performed a qualitative assessment on our ICS and Validus reporting units (within our reportable operating segment: Verification and Certification Segment) for our 2020 annual test and concluded that it was more-likely-than-not that the fair value of the reporting unit exceeded its carrying value and, therefore, a two-step impairment test was not necessary. The qualitative assessment compares current performance, expectations and other indicators against what was expected as part of the most recent Step 1 valuation. Consequently, the key estimates and assumptions related to the most recent Step 1 valuation pertaining to this reporting unit had not changed since our previous annual report. For our 2020 annual test, we performed a quantitative assessment on our SureHarvest reporting unit. SureHarvest, which includes Postelsia, is the sole operating segment within the Software Sales and Related Consulting segment. We estimated the SureHarvest reporting unit’s fair value using a 14-year projection of discounted cash flows which incorporates planned growth rates, market-based discount rates and estimates of residual value. Additionally, we used a market-based, weighted-average cost of capital of 22.1% to discount the projected cash flows of those operations. Estimating the fair value of an individual reporting unit requires us to make assumptions and estimates regarding our future plans, industry and economic conditions and our actual results and conditions may differ over time. If the carrying value of a reporting unit’s net assets exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value. In connection with our testing, we noted the SureHarvest reporting unit was more sensitive to near-term changes in discounted cash flow assumptions. As of December 31, 2020, the fair value did not exceed the carrying value of net assets by approximately 30.7%. As of December 31, 2019 the fair value did not exceed the carrying value of net assets by approximately 4.0%. An impairment of goodwill of approximately $0.2 millon was recognized as of December 31, 2019. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 8 – Accrued Expenses and Other Current Liabilities The following table summarizes our accrued expenses and other current liabilities as of (in thousands): December 31, December 31, 2020 2019 Income and sales taxes payable $ 168 $ 171 Payroll related accruals 271 201 Customer deposits 31 62 Professional fees and other expenses 129 240 $ 599 $ 674 |
Notes Payable and Lease Obligat
Notes Payable and Lease Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable and Lease Obligations | Note 9 - Notes Payable and Lease Obligations Long Term Debt December 31, December 31, 2020 2019 (In thousands) Paycheck Protection Program Loan $ 1,035 $ - Less current portion of notes payable and other long-term debt (463 ) - Notes payable and other long-term debt $ 572 $ - The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (“PPP”), the initiative provides federally guaranteed loans to small businesses. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. On April 17, 2020, the Company received a $1.0 million loan under the PPP with a maturity date of April 17, 2022 and an annual interest rate of 1.00%. The loan will be repaid in 12 monthly consecutive interest and principal payments and one balloon payment of approximately $351,000, commencing May 1, 2021. While the Company believes a significant portion of the loan will be forgiven, the Company has not received any notification, if any, of the loan amount will be forgiven. Unison Revolving Line of Credit The Company has a revolving line of credit (“LOC”) agreement which matures on April 12, 2022. 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 December 31, 2020 and 2019, the effective interest rate was 4.75% and 6.25%, respectively. The LOC is collateralized by all the business assets of ICS. As of December 31, 2020 and 2019, there were no amounts outstanding under this LOC. Lease Obligations We have operating and finance leases for corporate offices, other regional offices, and certain equipment. Our leases have remaining lease terms of 1 year to 15 years, some of which include multiple options to extend the leases for up to 5 years each. The components of lease expense were as follows (in thousands): Year ended Year ended December 31, December 31, Operating lease cost $ 464 $ 469 Finance lease cost Amortization of assets 8 9 Interest on finance lease obligations 5 7 Variable lease cost - - Total net lease cost $ 477 $ 485 Included in the table above, is approximately $0.3 million for the year ended December 31, 2020, respectively, of operating lease cost for our corporate headquarters. This space is being leased from The Move, LLC. Our CEO and President, each a related party to WFCF, have a 24.3% jointly-held ownership interest in The Move, LLC. Rent and lease expense for each of the years ended December 31, 2020 and 2019 was $0.6 million. Supplemental balance sheet information related to leases was as follows (in thousands): Supplement balance sheet info: December 31, 2020 December 31, 2019 Operating leases: Related Party Other Total Related Party Other Total Operating lease ROU assets $ 2,755 $ 238 $ 2,993 $ 2,933 $ 314 $ 3,247 Current operating lease liabilities 179 89 268 158 81 239 Noncurrent operating lease liabilities 3,079 178 3,257 3,260 266 3,526 Total operating lease liabilities $ 3,258 $ 267 $ 3,525 $ 3,418 $ 347 $ 3,765 Finance leases: December 31, 2020 December 31, 2019 Right of use asset, at cost $ 67 $ 43 Accumulated amortization (30 ) (22 ) Right of use asset, net $ 37 $ 21 Current obligations of finance leases $ 13 $ 8 Finance leases, net of current obligations 31 21 Total finance lease liabilities $ 44 $ 29 Weighted average remaining lease term (in years): Operating leases 10.0 11.0 Finance leases 3.7 3.0 Weighted average discount rate: Operating leases 5.8 % 5.8 % Finance leases 13.0 % 20.8 % Supplemental cash flow and other information related to leases was as follows (in thousands): Year ended Year ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 449 $ 430 Operating cash flows from finance leases $ 5 $ 7 Financing cash flows from finance leases $ 8 $ 7 Right of use assets obtained in exchange for lease liabilities: Operating leases $ 3,531 $ 3,513 Maturities of lease liabilities were as follows (in thousands): Years Ending December 31st, Operating Leases Finance Leases 2021 $ 462 $ 18 2022 466 15 2023 461 10 2024 407 5 2025 405 4 Thereafter 2,495 - Total lease payments 4,696 52 Less amount representing interest (1,171 ) (8 ) Total lease obligations 3,525 44 Less current portion (268 ) (13 ) Long-term lease obligations $ 3,257 $ 31 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 - Income Taxes The provision for income taxes consists of the following (in thousands): December 31, 2020 2019 Current income tax expense: International $ 8 $ - Federal 398 438 State 79 82 Total current income tax expense 485 520 Deferred income tax benefit: Federal (20 ) (51 ) State (3 ) (9 ) Total deferred income tax benefit (23 ) (60 ) Total income tax expense $ 462 $ 460 The reconciliation of income taxes calculated at the statutory rates to our effective tax rate is as follows (in thousands): December 31, 2020 2019 Expected tax expense $ 388 $ 321 State tax provision, net 66 55 Permanent differences 8 11 Foreign 36 - Minority interest - 76 Other, net (36 ) (3 ) Total income tax expense $ 462 $ 460 The income tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2020 2019 Deferred tax assets (liabilities): Accruals, stock-based compensation and other $ 217 $ 181 Property and equipment (85 ) (15 ) Intangibles assets 311 212 Net deferred tax assets 443 378 |
Stock Buyback Plan
Stock Buyback Plan | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stock Buyback Plan | Note 11 – Stock Buyback Plan On September 30, 2019, our Board of Directors approved a new plan to buyback up to ten million additional shares of our common stock from the open market (“Stock Buyback Plan”). Activity under the Stock Buyback Plan by year is as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): (in thousands, except per share cost) Number of Shares Cost of Shares Average Cost Balance, January 1, 2019 126 $ 1,110 $ 8.81 Shares purchased during 2019 80 555 6.94 Balance, December 31, 2019 206 1,665 8.08 Shares purchased during 2020 132 1,037 7.86 Balance, December 31, 2020 338 $ 2,702 $ 7.99 The repurchased shares are recorded as part of treasury stock and are accounted for under the cost method. Our Stock Buyback Plan has been and will be used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. In the future, we may consider additional share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, and planned investment and financing needs. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 12 – Stock-Based Compensation In addition to cash compensation, the Company may compensate certain service providers, including employees, directors, consultants, and other advisors, with equity-based compensation in the form of stock options and restricted stock awards. The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date. For stock options, fair value is calculated at the date of grant using the Black-Scholes-Merton option-pricing model. For restricted stock awards, fair value is the closing stock price for the Company’s common stock on the grant date. The expense is recognized over the vesting period of the grant. For the periods presented, all stock-based compensation expense was classified as a component within selling, general and administrative expense in the Company’s consolidated statements of income. The amount of stock-based compensation expense is as follows (in thousands): Year ended December 31, 2020 2019 Stock options $ 117 $ 147 Restricted stock awards 4 15 Total $ 121 $ 162 As of December 31, 2020, the estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (in thousands): Years ended December 31st: Unvested Unvested Total 2021 $ 82 $ 1 $ 83 2022 21 21 2023 4 4 2024 - - - $ 107 $ 1 $ 108 The Company estimated the fair value of stock options using the Black-Scholes-Merton option-pricing model with the following assumptions (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Year ended December 31, 2020 2019 Number of options awarded to purchase common shares 7,000 2,500 Risk-free interest rate 1.19 % 1.50 % Expected volatility 94.7 % 100.3 % Assumed dividend yield N/A N/A Expected life of options from the date of grant 9.8 years 9.8 years Equity Incentive Plans Our 2006 Equity Incentive Plan (the “2006 Plan”) and 2016 Equity Incentive Plan (the “2016 Plan,” and together with the 2006 Plan, the “Plans”) provide for the issuance of stock-based awards to employees, officers, directors and consultants. The Plans permit the granting of stock awards and stock options. The vesting of stock-based awards is generally subject to the passage of time and continued employment through the vesting period. Our 2006 Plan provided for the issuance of a maximum of 3.0 million shares of our common stock. The 2006 Plan terminated in September 2016. As of December 31, 2020, the 2006 Plan had 37,128 awards outstanding (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). Our 2016 Plan was ratified by our shareholders in May 2016 and provides for the issuance of a maximum of 5.0 million shares of our common stock, of which 4.9 million shares were still available for issuance as of December 31, 2020 (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). Stock Option Activity The Company generally grants stock options to directors, eligible employees and officers as a part of its equity incentive plan. Restrictions and vesting periods for the stock option grants are set forth in the award agreements. A stock option grant represents an option to purchase a defined number of shares of the Company’s common stock to be released from restrictions upon completion of the vesting period. The awards typically vest in equal increments over one to three years. Stock option activity during 2020 and 2019 is summarized as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Number of Weighted avg. Weighted avg. Weighted avg. Aggregate awards per share value per share (in years) intrinsic value Outstanding, January 1, 2019 108,613 $ 5.96 $ 5.88 6.91 $ 920,156 Granted 2,500 6.84 6.12 9.80 Exercised - - - - Expired/Forfeited (1,832 ) 7.44 7.32 7.55 Outstanding, December 31, 2019 109,281 $ 5.84 $ 6.12 5.97 $ 601,668 Granted 7,000 7.91 6.89 9.32 Exercised (5,000 ) 0.96 0.96 0.50 Expired/Forfeited (6,195 ) 7.36 7.26 6.98 Outstanding, December 31, 2020 105,086 $ 6.25 $ 6.06 5.38 $ 814,090 Exercisable, December 31, 2020 82,972 Unvested, December 31, 2020 22,114 The aggregate intrinsic value of stock options represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of our common stock on December 31, 2020 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on December 31, 2020. During the year ended December 31, 2020, a total of 6,195 options were forfeited, 2,313 of which were unvested (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). The options were forfeited upon the employees’ termination from the Company. During the year ended December 31, 2019, a total of 1,832 options were forfeited, 2,080 of which were unvested (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). Restricted Stock Activity The Company grants shares of restricted stock to directors, eligible employees and officers as a part of its equity incentive plan. Restrictions and vesting periods for the awards are set forth in the award agreements. Each share of restricted stock represents one share of the Company’s common stock to be released from restrictions upon completion of the vesting period. The awards typically vest in equal increments over one to three years. Shares of restricted stock are valued at the closing price of the Company’s common stock on the grant date and are recognized as selling, general and administrative expense over the vesting period of the award. The following table summarizes activity for restricted stock awards for the fiscal years presented (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Weighted avg. Number of grant date options fair value Non-vested restricted shares, January 1, 2019 7,500 $ 9.52 Granted - - Vested (6,250 ) 9.40 Forfeited - - Non-vested restricted shares, December 31, 2019 1,250 $ 10.20 Granted - - Vested - - Forfeited - - Non-vested restricted shares, December 31, 2020 1,250 $ 10.20 |
Basic and Diluted Net Income Pe
Basic and Diluted Net Income Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Per share - net income attributable to Where Food Comes From, Inc.: | |
Basic and Diluted Net Income Per Share | Note 13 - Basic and Diluted Net Income per Share Basic net income per share was computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and restricted stock awards are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds plus unrecognized stock-based compensation obtained thereby were used by the Company to purchase common stock at the average market price during the period. The following is a reconciliation of the share data used in the basic and diluted income per share computations (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Year ended December 31, (in thousands) 2020 2019 Basic: Weighted average shares outstanding 6,162 6,213 Diluted: Weighted average shares outstanding 6,162 6,213 Weighted average effects of dilutive securities 59 44 Total 6,221 6,257 The effect of the inclusion of the antidilutive shares would have resulted in an increase in earnings per share. Accordingly, the weighted average shares outstanding have not been adjusted for antidilutive shares. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14 - Related Party Transactions In 2020 and 2019, we recorded total net revenue of approximately $39,000 and $5,000, respectively, from related parties. The related parties consisted of a business owned by the father of Leann Saunders, our President, and businesses owned by members of our Board of Directors. The Company leases its corporate headquarters from a company in which our CEO and President have a 24.3% jointly-held ownership interest (Note 15). Under the related party arrangement, approximately $0.5 million was paid in rent and CAM for our corporate headquarters was included in the consolidated statements of income for each of the years ended December 31, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – Commitments and Contingencies Operating Leases & Lease Incentive Obligation The Company leases approximately 15,700 square feet of office space for its corporate headquarters. This space is being leased from The Move, LLC in which our CEO and President, each a related party to the Company, have a 24.3% jointly-held ownership interest. The lease agreement has an initial term of five years plus two renewal periods, which the Company is more likely than not to renew. Total rental payments are approximately $40,900 per month as of December 31, 2020. The rental payments include common area charges and are subject to annual increases over the term of the lease. The Company has recorded leasehold improvements of approximately $0.8 million, which included approximately $0.4 million in lease incentives. Leasehold improvements are included in property and equipment on the consolidated balance sheets. Lease incentives have been included in calculating the lease liability recorded on the balance sheet. In September 2017, the Company entered into a new lease agreement for our Urbandale, Iowa office space. The lease was for a period of two years and expired on August 31, 2019. This lease was extended for an additional 3 years, terminating on August 31, 2022. Rental payments are approximately $3,400 per month, which includes common area charges, and are not subject to annual increases over the term of the lease. In December 2018, we entered into a new lease agreement in San Ramon, California for SureHarvest and JVF office space. The lease is for a period of sixty-six months and expires on May 1, 2024. Rental payments are approximately $6,300 per month as of December 31, 2020, which includes common area charges, and are subject to annual increases over the term of the lease. See Note 9 of our Consolidated Financial Statements for a detailed description of maturities of lease liabilities related to our leases. Legal Proceedings From time to time, we may become involved in various legal actions, administrative proceedings and claims in the ordinary course of business. We generally record losses for claims in excess of the limits of purchased insurance in earnings at the time and to the extent they are probable and estimable. Employee Benefit Plan The Company has established a 401(k) plan for the benefit of our employees. The plan covers substantially all of our employees who have attained age 21. We may make a discretionary matching contribution in an amount that is determined by our Board of Directors. If a matching contribution is made, the amount cannot exceed the elective deferral contributions. For each of the years ended December 31, 2020 and 2019, we made aggregate matching contributions of approximately $0.2 million. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 16 – Supplemental Cash Flow Information Year ended December 31, 2020 2019 Cash paid during the year: Interest expense $ 8 $ 10 Income taxes $ 597 $ 344 Non-cash investing and financing activites: Common stock issued in connection with acquisition of non-controlling interest in SureHarvest Services, LLC $ - $ 547 Equipment acquired under a capital lease $ 24 $ - |
Segments
Segments | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segments | Note 17 - Segments With each acquisition, we assess the need to disclose discrete information related to our operating segments. Because of the similarities of certain of our acquisitions that provide certification and verification services, we aggregate operations into one verification and certification reportable segment. The operating segments included in the aggregated verification and certification segment include IMI Global, ICS, and Validus. The factors considered in determining this aggregated reporting segment include the economic similarity of the businesses, the nature of services provided, production processes, types of customers and distribution methods. The Company also determined that it has a software sales and related consulting reportable segment. SureHarvest, which includes Postelsia, is the sole operating segment. This segment includes software license, maintenance, support and software-related consulting service revenues. The Company’s chief operating decision maker (the Company’s CEO) allocates resources and assesses the performance of its operating segments. Segment management makes decisions, measures performance, and manages the business utilizing internal reporting operating segment information. Performance of operating segments are based on net sales, gross profit, selling, general and administrative expenses and most importantly, operating income. The Company eliminates intercompany transfers between segments for management reporting purposes. The following table shows information for reportable operating segments (in thousands): Year ended December 31, 2020 Year ended December 31, 2019 Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Assets: Goodwill $ 1,947 $ 999 $ - $ 2,946 $ 1,133 $ 1,813 $ - $ 2,946 All other assets, net 17,576 3,089 (4,163 ) 16,502 16,294 3,188 (4,191 ) 15,291 Total assets $ 19,523 $ 4,088 $ (4,163 ) $ 19,448 $ 17,427 $ 5,001 $ (4,191 ) $ 18,237 Revenues: Verification and certification service revenue $ 14,254 $ - $ - $ 14,254 $ 15,564 $ - $ - $ 15,564 Product sales 3,859 - - 3,859 3,300 - - 3,300 Software license, maintenance and support services revenue - 957 (90 ) 867 - 1,274 (207 ) 1,067 Software-related consulting service revenue - 1,120 (24 ) 1,096 - 948 (105 ) 843 Total revenues $ 18,113 $ 2,077 $ (114 ) $ 20,076 $ 18,864 $ 2,222 $ (312 ) $ 20,774 Costs of revenues: Costs of verification and certification services 7,497 - (90 ) 7,407 8,628 - (184 ) 8,444 Costs of products 2,508 - - 2,508 2,149 - - 2,149 Costs of software license, maintenance and support services - 520 - 520 - 615 - 615 Costs of software-related consulting services - 713 - 713 - 487 - 487 Total costs of revenues 10,005 1,233 (90 ) 11,148 10,777 1,102 (184 ) 11,695 Gross profit 8,108 844 (24 ) 8,928 8,087 1,120 (128 ) 9,079 Depreciation & amortization 428 569 - 997 374 723 - 1,097 Other operating expenses 5,664 604 (24 ) 6,244 5,624 934 (128 ) 6,430 Segment operating (loss)/income $ 2,016 $ (329 ) $ - $ 1,687 $ 2,089 $ (537 ) $ - $ 1,552 Other items to reconcile segment operating income (loss) to net income attributable to WFCF: Other expense (income) (162 ) 2 - (160 ) (93 ) 162 - 69 Income tax (benefit)/expense - - 462 462 - - 460 460 Net loss attributable to non-controlling interest - - - - - 322 - 322 Net (loss)/income attributable to WFCF $ 2,178 $ (331 ) $ (462 ) $ 1,385 $ 2,182 $ (377 ) $ (460 ) $ 1,345 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 – Subsequent Events The Company has had no material, significant or unusual transactions or events from the financial statement date through the issuance of the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents We place our cash with high quality financial institutions. At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit; however, we have not experienced any losses related to balances that exceed such FDIC insurance limits (currently $250,000), and we believe our credit risk is minimal. At times, we may also invest in short-term investments with original maturities of three months or less, which we consider to be cash and cash equivalents, since they are readily convertible to cash. |
Short-Term Investments in Certificates of Deposit | Short-Term Investments in certificates of deposit Certificates of deposit with original maturities greater than three months and remaining maturities less than one year are classified as “short-term investments.” |
Revenue Recognition | Revenue Recognition Verification and Certification Segment We offer a range of products and services to maintain identification, traceability, and verification systems. We conduct both on-site and desk audits to verify that claims being made about livestock, food, other high-value specialty crops and agricultural products are accurate. We generate revenue primarily from the sale of our verification solutions, consulting services and hardware sales. We sell our products and services directly to customers at various levels in the livestock and agricultural supply chains. Verification and certification service revenue primarily consists of fees charged for verification audits and other verification services that the Company performs for customers. A more detailed summary of our verification and certification services is included in the subsections below. Animal Verification and Certification Services Our animal verification and certification services contracts are generally structured in one of the following ways: (i) we commit to perform the required number of animal audits to verify a customer’s compliance with a standard or claim, or (ii) we commit to perform animal audit services at a fixed price by site or location type as requested by our customer during an annual period. These contract structures are discussed in more detail in the subsections below. Contract to Provide Required Number of Animal Audit Services For certain of our animal verification and certification services, we commit to perform the required number of location or site audits within our customer’s supply chain to verify customer’s compliance with a contractually-specified standard or claim. Each location or site audit is typically very short-term in nature, with a typical duration of one to two weeks. Upon completion of an audit, we provide the customer with an audit verification report for the specific site or location that was audited. Payment is made by customer upon completion of each site or location audit. We generally enter into revenue contracts with a one-year term. Our customers generally have the right to terminate the contract without prejudice with thirty days’ written notice. We have determined that, as a result of the termination provisions present in these contracts, the accounting contract term is a thirty-day period, with each thirty-day time increment representing a separate accounting contract under ASC 606. Furthermore, we have concluded that there is a single performance obligation that is a series comprised of each distinct location or site audit performed. Our customers are charged a standard daily rate for the provision of an audit based on the scale of site operations and geographical location. Consideration attributable to each audit within the series is variable, as the number of days required to complete each audit is not known until performance of that audit occurs. We have concluded that it is appropriate to allocate variable consideration (that is, the number of days required to complete an audit) to each audit within the series. This is because the consideration that we earn for each audit relates specifically to our efforts to transfer to our customer that discrete audit, and the resulting audit opinion or verification report, for that specified site or location, and this allocation is consistent with the allocation objective as defined in ASC 606. As a result, instances in which the Company evaluates and applies the constraint on variable consideration are immaterial. We further concluded that over-time recognition is appropriate because: (i) our performance of audits does not create an asset with an alternative use, as the audit and related verification report relates to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date. We utilize an input method to measure over-time progress of each audit within the series based on the number of audit days performed. We do, however, note that there are instances in which we only have an enforceable right to payment upon completion of an audit, and thus, over-time recognition is not permitted. For these contracts, revenue is recognized at the point in time at which an audit is completed. This does not result in a significant difference in the timing of revenue recognition (as compared to those audits that are recognized over time) due to the very short-term duration of an audit. Our customers may also have the option to purchase incremental review services (for example, an investigative audit or video review services) that are unrelated to the audit services to verify compliance with a specified standard or claim. The incremental review services are also typically very short-term in nature (that is, one to two weeks). We have concluded that these optional purchases do not reflect a material right under ASC 606 because the incremental review services are performed at standard pricing that would be charged to other similarly situated customers. Upon customer request for an incremental review service, we believe that our customer has made a discrete purchasing decision that should be treated as a separate accounting contract under ASC 606. We charge a fixed fee for the incremental review service, and thus, upon customer request, we are entitled to fixed consideration for that service under ASC 606. We concluded that over-time revenue recognition is appropriate for incremental review services because: (i) our performance of incremental review services does not create an asset with an alternative use because that review service, and the associated customer deliverable, relates to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date on incremental review services. We utilize a time-based input method to measure progress toward complete satisfaction of an incremental review service, which is based on the number of hours performed on the incremental review service relative to the total number of hours required to complete that review service. As previously mentioned, our incremental review services are typically completed within one to two weeks of a customer request. Contract to Provide Animal Audit Services at Customer Request Other animal verification and certification services contracts are structured such that we commit to perform audit services at a fixed price by site or location type as requested by our customer during an annual period. Performance of an audit typically occurs within a one to two-week period. We invoice our customer upon completion of an audit, and payment is due from customer within thirty days or less of receipt of invoice. Under this contract structure, the customer is, in effect, provided a pricing list for animal audit services, and pricing is effective over a one-year period. We have concluded that enforceable rights and obligations do not arise until a customer actually engages us to perform an audit service documented in the pricing list; therefore, each customer request represents a purchasing decision that is a separate accounting contract under ASC 606. We note that the termination provisions specified in our pricing lists vary. In certain instances, a customer may only have the right to terminate in the event of non-performance. Alternatively, in other contracts, a customer may have the right to terminate without prejudice at any time or with thirty days’ written notice. However, regardless of the termination provision specified, we have concluded that the accounting contract term is equal to the duration of the requested audit service (that is, the termination provisions generally do not affect the accounting contract term for each requested audit service). Upon a customer’s request for an audit service, consideration is fixed, as we charge the customer a fixed fee by audit type over the annual period per the pricing list. We concluded that over-time revenue recognition is appropriate for a requested audit service because: (i) our performance of the requested audit service does not create an asset with an alternative use as that audit, and the associated audit report, relate to facts and circumstances that are specific to each customer site or location (that is, there is a practical limitation on our ability to readily direct the asset to another customer) and (ii) we have an enforceable right to payment, inclusive of a reasonable profit, for performance completed to date on a requested audit. A time-based input method is utilized to measure progress toward complete satisfaction of an audit based on the number of hours performed on that audit relative to the total number of hours expected to be required to complete the audit. As previously mentioned, our audit services are typically completed within one to two weeks of a customer request. Other Considerations for Animal Certification and Verification Services In connection with the provision of on-site audits related to animal certification and verification services, reimbursable expenses are incurred and billed to customers, and such amounts are recognized on a gross basis as both revenue and cost of revenue. Any amounts collected on behalf of a third-party and remitted in full to that third-party are excluded from the transaction price and, thus, revenue. Crop and Other Processed Product Verification and Certification Services Third-party crop and other processed product audits are generally structured such that we commit to perform an independent audit to verify that food producers and/or farmers comply with certain standards. We generally provide verification services related to organic, Non-GMO and gluten-free standards. Depending on the crop or product type, verification audit activities may take two months to one year to complete. During this assessment period, various integrated audit activities and/or input reviews are performed in accordance with the regulations specified by the relevant standard. The fee structure is such that customers pay an annual assessment fee for a crop or other processed product to verify compliance with the specified standard. This fee is payable upfront on a nonrefundable basis. Our customers can typically terminate a crop or other processed product audit at any time without prejudice. However, given the nonrefundable upfront payment structure for the annual assessment service, we have concluded that the contract term is one year. We record the upfront payment made by the customer for the annual assessment service as deferred revenue. The audit activities and input reviews required in the provision of an annual assessment are not distinct under ASC 606, and consequently, we account for an annual assessment as a single integrated performance obligation. For certain of our third-party crop and other processed product audits, the annual assessment fee is fixed for the annual period. In other scenarios, the annual assessment fee may be variable due to increased review activities required for incremental inputs to a crop or processed product identified through the assessment process. At the time that an incremental input is identified, which generally occurs in the early stages of an annual assessment, the incremental consideration for the provision of review services related to that incremental input also becomes known. We allocate the transaction price derived from the annual assessment fee to the single integrated performance obligation for that annual assessment. Revenue related to the annual assessment is recognized over time in accordance with ASC 606. This is because the annual assessment service does not create an asset with an alternative use, as it relates to facts and circumstances that are specific to a customer’s crop or processed product. Further, we have an enforceable right to payment for performance completed to date on the annual assessment due to the nonrefundable upfront payment made by customer. We utilize an input method to measure progress toward satisfaction of the annual assessment based on the percentage of activities/phases or input reviews completed under the annual assessment. As it relates to the upfront payment for the annual assessment, we have utilized the practical expedient that exempts us from adjusting consideration for the effects of a significant financing component when we expect that the period between customer payment and the provision of the related service is one year or less. In certain contracts, an independent third-party inspection may be required for a site or location in our customer’s supply chain in accordance with the regulations for a specified standard. An inspection is performed by an independent third-party inspector, and the customer is charged an hourly rate for these inspection services. Under this scenario, a separate accounting contract arises upon initiation and performance of an inspection, and we typically invoice our customer for the inspection upon completion of the inspection service. Given that the customer has the ability to terminate at any time without prejudice, we have concluded that the contract term for each inspection ends as control of an inspection service transfers. Inspections are generally short-term in nature with a term ranging from a few days to two weeks. We have further determined that inspections are distinct from an annual assessment. Consideration attributable to an inspection is variable, as the inspector is only able to provide a high-level estimate of the cost of the inspection based on the inspector’s hourly rate until the inspector is at the relevant producer/supplier site to determine the time and level of effort required to complete the inspection. Given the very short-term nature of an inspection, variability related to an inspection generally resolves itself within a reporting period. However, we are typically required by certain regulations to provide an inspection cost estimate to our customer, and, if required, we utilize that estimate as our estimate of variable consideration. The cost estimate is generally derived from the cost to perform the prior-year inspection for that specific customer site or location or, when required, the historical cost to provide an inspection for a comparable site or location. In our experience, the historical cost of inspections has been predictive of the future cost of an inspection. Other Considerations for Crop and Other Processed Product Verification Services Reimbursable expenses incurred in the provision of an annual assessment or required inspection are billed to our customers, and such amounts are recognized on a gross basis as both revenue and cost of revenue. In addition, any amounts collected on behalf of a third-party and remitted in full to that third-party are excluded from the transaction price and, thus, revenue. Product Sales Product sales are primarily generated from the sale of cattle identification ear tags. Each customer purchase request represents a purchasing decision made by customer. As such, enforceable rights and obligations (and, thus, a separate accounting contract under ASC 606) arise at the time a customer submits its purchase request to us. At the time of request, we are entitled to fixed consideration, as the sales quantity and related price of the product is known. All of our customers are charged the same fixed price per tag. 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. We typically deliver product to the customer within a few days of customer’s sales request. At the time of delivery, we invoice our customer for the related product sales and record invoiced amounts to accounts receivable. Payment is typically due by customer upon receipt of invoice. In relation to our product sales, the sales taxes collected from customers and remitted to government authorities are excluded from revenue. Additionally, we do not typically provide right of return or warranty on product sales. Software Sales and Related Consulting Segment We predominately offer software products via a SaaS model, which is an annual subscription-based model. Support services are generally included in the subscription. We also provide web-hosting services on an annual basis to all of our customers in conjunction with their software subscription. Customers have the ability to terminate without prejudice upon thirty days’ written notice; however, the subscription fee, inclusive of maintenance and support services, and the web-hosting fee are paid upfront by the customer on a nonrefundable basis. Consequently, we have concluded that the contract term for the annual software subscription and web-hosting services is one year. We have determined that a software license subscription and the related hosting service should be accounted for as a service transaction, as we provide the functionality of our software through the hosting arrangement. The SaaS arrangement provides customers with unlimited access to our software and, thus, is accounted for as a series of distinct daily service periods that provide substantially the same service (that is, continuous access to the hosted software) each day during the annual contract term. Further, the provision of basic technical support services also represents a stand-ready obligation that is a series of distinct daily service periods that provide substantially the same service (that is, access to our technical support infrastructure) during the annual contract term. Because the basic technical support services and SaaS each represent performance obligations that are a series of distinct daily service periods, we have elected to combine these performance obligations. We are entitled to fixed consideration for the software license subscription, inclusive of support services, and the related hosting service. The software license subscription and hosting fees in our contracts represent the standalone selling price for that related service. This is because the fees charged for the software license subscription and hosting service represent the software license subscription and hosting service fees that are charged to other customers with a similar level of data loaded into the software (regardless of whether that customer contracts for professional services). Accordingly, the software license subscription and hosting fees are allocated to the combined SaaS performance obligation. We recognize revenue related to the SaaS arrangement over time because a customer simultaneously receives and consumes the benefit from the provision of access to the hosted software over the annual subscription period. Accordingly, we utilize a time-based output measure of progress that results in a straight-line attribution of revenue. That is, revenue related to the combined SaaS obligation should be recognized daily on a straight-line basis over the one-year subscription term, as this reflects the direct measurement of value to a customer of the provision of access to the software via hosting each day. As it relates to the upfront payment for the software subscription and hosting service, we have utilized the practical expedient that exempts us from adjusting consideration for the effects of a significant financing component when we expect that the period between customer payment and the provision of the related service is one year or less. In addition, we record the upfront payment made by customer for the annual assessment service as deferred revenue. In some of our SaaS contracts, we also provide software-related consulting services to our customers during an annual software subscription period. Consulting services fees are derived from a standard rate card by employee level, and we invoice for consulting services monthly on a time-incurred basis. Due to the termination provisions present in our SaaS contracts, our customers have an in-substance renewal decision each month for further consulting services (that is, via their decision not to terminate the contract each month). Accordingly, the contract term for consulting services is on a month-to-month basis within the annual subscription period. We have concluded that consulting services are distinct from the SaaS arrangement. To the extent that consulting services result in a software enhancement or new functionality, we have determined that those consulting services are still distinct because added features typically provide new, discrete capabilities with independent value to a customer and a customer accesses the SaaS in a single-tenant architecture. Further, additional features and functionality are often made available to a customer substantially after the “go-live” date of the software (via the hosting service). As a result, our software-related consulting services represent distinct performance obligations. We recognize revenue related to consulting services over time in accordance with ASC 606. This is because our performance does not create an asset with an alternative use, as consulting services, and, if applicable, any related software enhancements, are highly tailored to the farming industry specific to the given customer, and we have an enforceable right to payment, inclusive of profit, for performance completed to date. As a result, for our consulting services, we have elected to utilize the practical expedient that allows us to recognize revenue in the amount to which we have a right to invoice, as we believe that we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date for the provision of consulting services. Principal versus Agent Considerations Under certain of our verification and certification service contracts, a third-party inspector may be required to perform an independent inspection of a site or location within our customer’s supply chain in accordance with regulations of a certain standard or claim. In this scenario, we have concluded that we are the principal in the provision of inspection services to our customer, as we control the inspection service, and the related inspection report, before it is transferred to our customer. In accordance with this conclusion, we present revenue related to inspections on a gross basis, with customer payment for an inspection presented as revenue and the inspection cost paid to the third-party inspector presented as an expense. In addition, we utilize a third-party to provide web-hosting services in the provision of our SaaS arrangements. In this scenario, we are primarily responsible for fulfilling the promise to provide web-hosting services to the customer, and we establish the fee that the customer is charged for the web-hosting services. Consequently, we have also concluded that we are the principal in the provision of web-hosting services under our SaaS arrangements. As such, we present revenue on a gross basis, with consideration received from our customer for the web-hosting service recorded as revenue and the cost paid to the third-party to provide those web-hosting services recorded as an expense. Disaggregation of Revenue We have identified four material revenue categories in our business: (i) verification and certification service revenue, (ii) product sales, (iii) software license, maintenance and support services revenue and (iv) software-related consulting service revenue. Revenue attributable to each of our identified revenue categories is disaggregated in the table below (amounts in thousands). Year ended December 31, 2020 Year ended December 31, 2019 Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Revenues: Verification and certification service revenue $ 14,254 $ - $ - $ 14,254 $ 15,564 $ - $ - $ 15,564 Product sales 3,859 - - 3,859 3,300 - - 3,300 Software license, maintenance and support services revenue - 957 (90 ) 867 - 1,274 (207 ) 1,067 Software-related consulting service revenue - 1,120 (24 ) 1,096 - 948 (105 ) 843 Total revenues $ 18,113 $ 2,077 $ (114 ) $ 20,076 $ 18,864 $ 2,222 $ (312 ) $ 20,774 Transaction Price Allocated to Remaining Performance Obligations We generally enter into revenue contracts with a one-year term. In certain instances, we have concluded that our contract term is less than one year because: (i) the termination provisions present in the contract impact the contract term under ASC 606 or (ii) a contract under ASC 606 arises at the time our customer requests the provision of a good or service that is delivered within or over a few days to a couple of weeks. As a result of our short-term contract structures, we have utilized the practical expedient in ASC 606-10-50-14 that exempts us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Contract Balances Under our animal verification and certification services contracts, we invoice customers once the performance obligation for the provision of a site or location audit has been satisfied, at which point payment is unconditional. In addition, any product sales are invoiced upon delivery to the customer, at which point payment is also unconditional. Accordingly, our animal verification and certification services contracts do not give rise to a contract asset under ASC 606; rather, invoiced amounts reflect accounts receivable. Under our crop and other processed product verification and certification services, a nonrefundable payment for an annual assessment of compliance with a standard is typically made by our customers upfront upon contract execution. That is, payment is made in advance of the provision of annual assessment services. Accordingly, we recognize deferred revenue upon receipt of the upfront payment from our customers for crop and other processed product audit assessment services. Revenue is subsequently recognized, and the related deferred revenue is reduced, over the one-year period during which assessment services are provided to the customer using the over-time measure of progress selected in accordance with ASC 606. To the extent that an inspection is required during the annual assessment period, we invoice customers once the performance obligation for the inspection has been satisfied, at which point payment is unconditional. As such, inspection services give rise to accounts receivable. Our software subscriptions, web-hosting, and support services are paid by our customers upfront on a nonrefundable basis. That is, payment is made in advance of the provision of these services to our customers. As a result, we recognize deferred revenue upon receipt of the upfront payment from our customers for software subscriptions, web-hosting and maintenance and support services. Revenue is subsequently recognized, and the related deferred revenue is reduced, on a straight-line basis during the annual contract term that these stand-ready services are provided to customer. Software-related consulting services are invoiced monthly on a time-incurred basis, at which point we have an enforceable right to payment for those services. Because payment is unconditional upon invoicing, our software-related consulting services are reflected as accounts receivable. As of December 31, 2020 and 2019, accounts receivable from contracts with customers, net of allowance for doubtful accounts, were approximately $2.5 million. As of December 31, 2020 and 2019, deferred revenue from contracts with customers were approximately $1.1 million and $0.8 million, respectively. The balance of the contract liabilities at December 31, 2019 was recognized as revenue in 2020 and the balance at December 31, 2020 is expected to be recognized as revenue during 2021. The following table reflects the changes in our contract liabilities during the year ended December 31, 2020 and 2019: Deferred revenue (in thousands): 2020 2019 Deferred revenue January 1 $ 797 $ 655 Unearned billings 3,163 2,684 Revenue recognized (2,828 ) (2,542 ) Deferred revenue December 31 $ 1,132 $ 797 |
Cost of Revenues | Cost of Revenues Salaries and related fringe benefits directly associated with our verification and certification service revenues are allocated to costs of verification and certification services. Costs of products primarily represents the cost of livestock ear tags generally used in connection with our verification programs. Livestock identification ear tags sold in connection with our verification offerings are purchased primarily from one supplier. However, there are numerous other companies which manufacture and market such ear tags. Costs of product support, including web-hosting fees, salaries and related fringe benefits directly associated with our software license, maintenance and support services, are allocated to costs of software license, maintenance and support services. Salaries and related fringe benefits directly associated with our software-related consulting revenues are allocated to costs of software-related consulting services. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Our receivables are generally due from trade customers. Credit is extended based on our evaluation of the customer’s financial condition, and generally collateral is not required. Accounts receivable are generally due approximately 30 days from the invoice date and are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts receivable that are outstanding longer than the contractual payment terms are considered past due. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, our previous loss and payment history, the customer’s current ability to pay its obligations to us and the condition of the general economy and the industry as a whole. We write-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The allowance for doubtful accounts was approximately $63,000 and $76,000, at December 31, 2020 and 2019, respectively. No single customer accounted for greater than 10% of our accounts receivable balances at December 31, 2020 and 2019. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosure, establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: ● Level 1: Quoted prices available in active markets for identical assets or liabilities; ● Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; ● Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models. The financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company’s non-recurring fair value measurements include purchase price allocations for the fair value of assets and liabilities acquired through business combinations. Please refer to Note 3 for further discussion of business combinations. The acquisition of a group of assets in a business combination transaction requires fair value estimates for assets acquired and liabilities assumed. The fair value of assets and liabilities acquired through business combinations is calculated using a discounted future cash flows method. The discounted cash flows are developed using the income approach in which a value (based on management’s expectations for the future) is determined by converting anticipated benefits. The fair value measurements are based on significant inputs not observable in the market and thus represent fair value measurements which are designated as Level 3 inputs within the fair value hierarchy. Key assumptions and considerations include: a) A discount rate range of 19-32 percent; b) Terminal value based on long-term sustainable growth rates of 3 percent; c) Financial data of comparable companies for market participant assumptions; and d) Consideration of the marketability that market participants would consider when measuring the fair value of a non-controlling interest in our acquisition. |
Other Financial Instruments | Other Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair value due to their short maturities. The carrying values shown for short-term investments, long-term investments and notes payable also approximate fair value because current interest rates and terms offered to us for similar instruments are substantially the same (Level 2 inputs). |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful-lives of the respective assets. Land is not depreciated. Buildings are depreciated over 15 to 20 years. Leasehold improvements are depreciated over the shorter of the lease term, which generally includes reasonably assured option periods, or the estimated useful-lives of the assets. All other property and equipment have depreciable lives which range from two to seven years. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses at the acquisition date, after amounts allocated to other identifiable intangible assets. Factors that contribute to the recognition of goodwill include synergies that are specific to our business and not available to other market participants and are expected to increase net sales and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. The fair values of other identifiable intangible assets are primarily determined using the income approach. Other intangible assets include, but are not limited to, developed technology, customer relationships, accreditations, and tradenames/trademarks and patents. Intangible assets with determinable useful-lives are amortized on a straight-line basis over their estimated useful-lives of two to 15 years. Certain acquired trade names are considered to have indefinite lives and are not amortized but are assessed annually for potential impairment as described below. |
Goodwill, Intangibles and Long-Lived Asset Impairment Tests | Goodwill, Intangibles and Long-Lived Asset Impairment Tests We perform our annual impairment test for goodwill in the fourth quarter of each year. We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. In certain circumstances, we may also utilize a discounted cash flow analysis that requires certain assumptions and estimates be made regarding market conditions and our future profitability. Indefinite-lived intangible assets are also tested at least annually for impairment by comparing the individual carrying values to the fair value. We review long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows. Undiscounted cash flows expected to be generated by the related assets are estimated over the asset’s useful life based on updated projections. If the evaluation indicates that the carrying amount of the asset may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique. |
Research and Development and Software Development Costs | Research and Development and Software Development Costs Research and development costs are charged to operations as incurred. We did not incur any research and development expense in 2020 and 2019. Internal use software development costs represent the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Website software development costs related to certain planning and training costs incurred in the development of website software are expensed as incurred, while application development stage costs are capitalized. Software development costs for external sale are capitalized once technological feasibility is achieved. Capitalized costs are amortized over the expected benefit period. We generally expense a significant portion of software development costs because technological feasibility occurs very late in the software development process. In connection with our acquisitions, software developed for external sale with an estimated fair value of approximately $0.9 million is included in property and equipment at both December 31, 2020 and 2019. During 2020 and 2019, the amortization of capitalized costs totaled approximately $0.07 million and $0.25 million, respectively, and is included in depreciation expense (Note 4). |
Advertising and Marketing Expenses | Advertising and Marketing Expenses Advertising and marketing costs are expensed as incurred. Total advertising and marketing expenses for the years ended December 31, 2020 and 2019, were approximately $0.6 million and $0.5 million, respectively. |
Income Taxes | Income Taxes We record income taxes under the asset and liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. The accounting standard related to income taxes applies to all tax positions and defines the confidence level that a tax position must meet in order to be recognized in the financial statements. The accounting standard requires that the tax effects of a position be recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If a tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are to be recognized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. This standard also provides guidance on the presentation of tax matters and the recognition of potential Internal Revenue Service interest and penalties. As of December 31, 2020 and 2019, the Company did not have an unrecognized tax liability. The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. The Company did not incur any interest and penalties for the years ended December 31, 2020 and 2019. The Company files income tax returns in the U.S. and various state jurisdictions, and there are open statutes of limitation for taxing authorities to audit our tax returns from 2016 through the current period. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date. For stock options, fair value is calculated at the date of grant using the Black-Scholes-Merton option-pricing model. For restricted stock awards, fair value is the closing stock price for the Company’s common stock on the grant date. The expense is recognized over the vesting period of the grant. Calculating stock-based compensation expense using the Black-Scholes-Merton option-pricing model requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. We consider many factors when estimating expected forfeitures, including the types of awards, employee classification and historical experience. Actual forfeitures may differ substantially from our current estimate. Under this pricing model, which incorporates ranges of assumptions for inputs, our assumptions are as follows: ● Dividend yield is based on our historical policy of not paying cash dividends. ● Expected volatility assumptions were derived from our actual volatilities. ● The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant with maturity dates approximately equal to the expected term at the grant date. ● The expected term of options represents the period of time that options granted are expected to be outstanding giving consideration to vesting schedules, based on historical exercise patterns, which we believe are representative of future behavior. |
Leases | Leases We adopted ASU 2016-02: Leases (Topic 842) as of January 1, 2019. We determine if an arrangement is a lease at inception. Operating leases are included in the right-of-use (ROU) assets, current operating lease liabilities and noncurrent operating lease liabilities in our consolidated balance sheet. Finance leases are included in property and equipment, current finance lease obligations and long-term finance lease obligations in our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. As the discount rates in the Company’s lease are not implicit, the Company estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. Our lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet. Our lease agreements do not contain any residual value guarantees. We have operating and finance leases for corporate offices, other regional offices, and certain equipment. Our leases have remaining lease terms of 1 year to 15 years, some of which include multiple options to extend the leases for up to 5 years each. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Financial Accounting Standards Board (FASB) Accounting Standards Codification is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Recently Adopted Accounting Pronouncements On January 1, 2019, we adopted ASU 2017-09, Leases, which requires lessees to recognize a right-of-use asset and a lease liability for all leases that are not short-term in nature. For a lessor, the accounting applied is also largely unchanged from previous guidance. Additionally, we elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The adoption of this update did have a material impact on assets and liabilities on the balance sheet as the standard requires the recognition of a right of use asset and corresponding lease liability. However, the adoption dd not have a material impact to our consolidated results of operations or statement of cash flows. On January 1, 2019, we adopted ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share-based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. The adoption of this update did not have a material impact on our Consolidated Financial Statements. On January 1, 2020, we adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes Step 2 from the goodwill impairment test. As a result, under the ASU, we perform our annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized will not exceed the total amount of goodwill allocated to that reporting unit. The adoption of this update did not have an impact on our Consolidated Financial Statements. On January 1, 2020 we adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the requirements associated with the hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. The adoption of this update did not have an impact on our Consolidated Financial Statements. On January 1, 2020 we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this update did not have an impact on our Consolidated Financial Statements. Recently Issued Accounting Pronouncements In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. The Company is currently required to adopt the new standard in 2023. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Attributable to Each of Our Identified Revenue Categories | Revenue attributable to each of our identified revenue categories is disaggregated in the table below (amounts in thousands). Year ended December 31, 2020 Year ended December 31, 2019 Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Revenues: Verification and certification service revenue $ 14,254 $ - $ - $ 14,254 $ 15,564 $ - $ - $ 15,564 Product sales 3,859 - - 3,859 3,300 - - 3,300 Software license, maintenance and support services revenue - 957 (90 ) 867 - 1,274 (207 ) 1,067 Software-related consulting service revenue - 1,120 (24 ) 1,096 - 948 (105 ) 843 Total revenues $ 18,113 $ 2,077 $ (114 ) $ 20,076 $ 18,864 $ 2,222 $ (312 ) $ 20,774 |
Schedule of Changes in Contract Liabilities | The following table reflects the changes in our contract liabilities during the year ended December 31, 2020 and 2019: Deferred revenue (in thousands): 2020 2019 Deferred revenue January 1 $ 797 $ 655 Unearned billings 3,163 2,684 Revenue recognized (2,828 ) (2,542 ) Deferred revenue December 31 $ 1,132 $ 797 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The major categories of property and equipment are as follows as of December 31st: (in thousands) 2020 2019 Automobiles $ 115 $ 115 Furniture and office equipment 529 539 Software and tools 1,876 1,449 Website development and other enhancements 184 184 Building and leasehold improvements 954 992 Land 1 2 3,659 3,281 Less accumulated depreciation 2,043 1,736 Property and equipment, net $ 1,616 $ 1,545 |
Intangible and Other Assets (Ta
Intangible and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible and Other Assets | The following table summarizes our intangible assets as of: December 31, December 31, Estimated 2020 2019 Useful Life Intangible assets subject to amortization (in thousands): Tradenames and trademarks $ 417 $ 417 2.5 - 8.0 years Accreditations 85 85 5.0 years Customer relationships 3,664 3,351 3.0 - 15.0 years Patents 970 970 4.0 years Non-compete agreements 121 121 5.0 years 5,257 4,944 Less accumulated amortization 2,795 2,182 2,462 2,762 Tradenames/trademarks (not subject to amortization) 465 465 2,927 3,227 Other assets 21 21 Intangible and other assets: $ 2,948 $ 3,248 |
Schedule of Future Amortization of Intangible Assets | As of December 31, 2020, future scheduled amortization of intangible assets is as follows (in thousands): Fiscal year ending December 31: 2021 $ 370 2022 357 2023 317 2024 306 2025 260 Thereafter 852 $ 2,462 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Value of Goodwill by Segment | Changes in the net carrying value of goodwill by segment are as follows (in thousands): Verification and Certification Segment Software Sales and Related Consulting Segment Consolidated January 1, 2019 $ 1,133 $ 2,011 $ 3,144 Impairment - (198 ) (198 ) December 31, 2019 $ 1,133 $ 1,813 $ 2,946 Transfer of assets 814 (814 ) - December 31, 2020 $ 1,947 $ 999 $ 2,946 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | The following table summarizes our accrued expenses and other current liabilities as of (in thousands): December 31, December 31, 2020 2019 Income and sales taxes payable $ 168 $ 171 Payroll related accruals 271 201 Customer deposits 31 62 Professional fees and other expenses 129 240 $ 599 $ 674 |
Notes Payable and Lease Oblig_2
Notes Payable and Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long Term Debt December 31, December 31, 2020 2019 (In thousands) Paycheck Protection Program Loan $ 1,035 $ - Less current portion of notes payable and other long-term debt (463 ) - Notes payable and other long-term debt $ 572 $ - |
Schedule of Lease Expense | The components of lease expense were as follows (in thousands): Year ended Year ended December 31, December 31, Operating lease cost $ 464 $ 469 Finance lease cost Amortization of assets 8 9 Interest on finance lease obligations 5 7 Variable lease cost - - Total net lease cost $ 477 $ 485 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousands): Supplement balance sheet info: December 31, 2020 December 31, 2019 Operating leases: Related Party Other Total Related Party Other Total Operating lease ROU assets $ 2,755 $ 238 $ 2,993 $ 2,933 $ 314 $ 3,247 Current operating lease liabilities 179 89 268 158 81 239 Noncurrent operating lease liabilities 3,079 178 3,257 3,260 266 3,526 Total operating lease liabilities $ 3,258 $ 267 $ 3,525 $ 3,418 $ 347 $ 3,765 Finance leases: December 31, 2020 December 31, 2019 Right of use asset, at cost $ 67 $ 43 Accumulated amortization (30 ) (22 ) Right of use asset, net $ 37 $ 21 Current obligations of finance leases $ 13 $ 8 Finance leases, net of current obligations 31 21 Total finance lease liabilities $ 44 $ 29 Weighted average remaining lease term (in years): Operating leases 10.0 11.0 Finance leases 3.7 3.0 Weighted average discount rate: Operating leases 5.8 % 5.8 % Finance leases 13.0 % 20.8 % |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow and other information related to leases was as follows (in thousands): Year ended Year ended December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 449 $ 430 Operating cash flows from finance leases $ 5 $ 7 Financing cash flows from finance leases $ 8 $ 7 Right of use assets obtained in exchange for lease liabilities: Operating leases $ 3,531 $ 3,513 |
Schedule of Maturities of Operating Lease and Finance Lease Liabilities | Maturities of lease liabilities were as follows (in thousands): Years Ending December 31st, Operating Leases Finance Leases 2021 $ 462 $ 18 2022 466 15 2023 461 10 2024 407 5 2025 405 4 Thereafter 2,495 - Total lease payments 4,696 52 Less amount representing interest (1,171 ) (8 ) Total lease obligations 3,525 44 Less current portion (268 ) (13 ) Long-term lease obligations $ 3,257 $ 31 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following (in thousands): December 31, 2020 2019 Current income tax expense: International $ 8 $ - Federal 398 438 State 79 82 Total current income tax expense 485 520 Deferred income tax benefit: Federal (20 ) (51 ) State (3 ) (9 ) Total deferred income tax benefit (23 ) (60 ) Total income tax expense $ 462 $ 460 |
Schedule of Reconciliation of Income Taxes | The reconciliation of income taxes calculated at the statutory rates to our effective tax rate is as follows (in thousands): December 31, 2020 2019 Expected tax expense $ 388 $ 321 State tax provision, net 66 55 Permanent differences 8 11 Foreign 36 - Minority interest - 76 Other, net (36 ) (3 ) Total income tax expense $ 462 $ 460 |
Schedule of Deferred Tax Assets (Liabilities) | The income tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands): December 31, 2020 2019 Deferred tax assets (liabilities): Accruals, stock-based compensation and other $ 217 $ 181 Property and equipment (85 ) (15 ) Intangibles assets 311 212 Net deferred tax assets 443 378 |
Stock Buyback Plan (Tables)
Stock Buyback Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Buyback Plan | Activity under the Stock Buyback Plan by year is as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): (in thousands, except per share cost) Number of Shares Cost of Shares Average Cost Balance, January 1, 2019 126 $ 1,110 $ 8.81 Shares purchased during 2019 80 555 6.94 Balance, December 31, 2019 206 1,665 8.08 Shares purchased during 2020 132 1,037 7.86 Balance, December 31, 2020 338 $ 2,702 $ 7.99 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense is as follows (in thousands): Year ended December 31, 2020 2019 Stock options $ 117 $ 147 Restricted stock awards 4 15 Total $ 121 $ 162 |
Schedule of Unrecognized Compensation Cost from Unvested Awards | As of December 31, 2020, the estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (in thousands): Years ended December 31st: Unvested Unvested Total 2021 $ 82 $ 1 $ 83 2022 21 21 2023 4 4 2024 - - - $ 107 $ 1 $ 108 |
Schedule of Estimated Fair Value of Stock Options | The Company estimated the fair value of stock options using the Black-Scholes-Merton option-pricing model with the following assumptions (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Year ended December 31, 2020 2019 Number of options awarded to purchase common shares 7,000 2,500 Risk-free interest rate 1.19 % 1.50 % Expected volatility 94.7 % 100.3 % Assumed dividend yield N/A N/A Expected life of options from the date of grant 9.8 years 9.8 years |
Schedule of Stock Option Activity | Stock option activity during 2020 and 2019 is summarized as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Number of Weighted avg. Weighted avg. Weighted avg. Aggregate awards per share value per share (in years) intrinsic value Outstanding, January 1, 2019 108,613 $ 5.96 $ 5.88 6.91 $ 920,156 Granted 2,500 6.84 6.12 9.80 Exercised - - - - Expired/Forfeited (1,832 ) 7.44 7.32 7.55 Outstanding, December 31, 2019 109,281 $ 5.84 $ 6.12 5.97 $ 601,668 Granted 7,000 7.91 6.89 9.32 Exercised (5,000 ) 0.96 0.96 0.50 Expired/Forfeited (6,195 ) 7.36 7.26 6.98 Outstanding, December 31, 2020 105,086 $ 6.25 $ 6.06 5.38 $ 814,090 Exercisable, December 31, 2020 82,972 Unvested, December 31, 2020 22,114 |
Schedule of Restricted Stock Activity Under Equity Incentive Plan | The following table summarizes activity for restricted stock awards for the fiscal years presented (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Weighted avg. Number of grant date options fair value Non-vested restricted shares, January 1, 2019 7,500 $ 9.52 Granted - - Vested (6,250 ) 9.40 Forfeited - - Non-vested restricted shares, December 31, 2019 1,250 $ 10.20 Granted - - Vested - - Forfeited - - Non-vested restricted shares, December 31, 2020 1,250 $ 10.20 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Per share - net income attributable to Where Food Comes From, Inc.: | |
Schedule of Reconciliation of Basic and Diluted Income Per Share Computations | The following is a reconciliation of the share data used in the basic and diluted income per share computations (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Year ended December 31, (in thousands) 2020 2019 Basic: Weighted average shares outstanding 6,162 6,213 Diluted: Weighted average shares outstanding 6,162 6,213 Weighted average effects of dilutive securities 59 44 Total 6,221 6,257 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | Year ended December 31, 2020 2019 Cash paid during the year: Interest expense $ 8 $ 10 Income taxes $ 597 $ 344 Non-cash investing and financing activites: Common stock issued in connection with acquisition of non-controlling interest in SureHarvest Services, LLC $ - $ 547 Equipment acquired under a capital lease $ 24 $ - |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | The following table shows information for reportable operating segments (in thousands): Year ended December 31, 2020 Year ended December 31, 2019 Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Verification and Certification Segment Software Sales and Related Consulting Segment Eliminations and Other Consolidated Totals Assets: Goodwill $ 1,947 $ 999 $ - $ 2,946 $ 1,133 $ 1,813 $ - $ 2,946 All other assets, net 17,576 3,089 (4,163 ) 16,502 16,294 3,188 (4,191 ) 15,291 Total assets $ 19,523 $ 4,088 $ (4,163 ) $ 19,448 $ 17,427 $ 5,001 $ (4,191 ) $ 18,237 Revenues: Verification and certification service revenue $ 14,254 $ - $ - $ 14,254 $ 15,564 $ - $ - $ 15,564 Product sales 3,859 - - 3,859 3,300 - - 3,300 Software license, maintenance and support services revenue - 957 (90 ) 867 - 1,274 (207 ) 1,067 Software-related consulting service revenue - 1,120 (24 ) 1,096 - 948 (105 ) 843 Total revenues $ 18,113 $ 2,077 $ (114 ) $ 20,076 $ 18,864 $ 2,222 $ (312 ) $ 20,774 Costs of revenues: Costs of verification and certification services 7,497 - (90 ) 7,407 8,628 - (184 ) 8,444 Costs of products 2,508 - - 2,508 2,149 - - 2,149 Costs of software license, maintenance and support services - 520 - 520 - 615 - 615 Costs of software-related consulting services - 713 - 713 - 487 - 487 Total costs of revenues 10,005 1,233 (90 ) 11,148 10,777 1,102 (184 ) 11,695 Gross profit 8,108 844 (24 ) 8,928 8,087 1,120 (128 ) 9,079 Depreciation & amortization 428 569 - 997 374 723 - 1,097 Other operating expenses 5,664 604 (24 ) 6,244 5,624 934 (128 ) 6,430 Segment operating (loss)/income $ 2,016 $ (329 ) $ - $ 1,687 $ 2,089 $ (537 ) $ - $ 1,552 Other items to reconcile segment operating income (loss) to net income attributable to WFCF: Other expense (income) (162 ) 2 - (160 ) (93 ) 162 - 69 Income tax (benefit)/expense - - 462 462 - - 460 460 Net loss attributable to non-controlling interest - - - - - 322 - 322 Net (loss)/income attributable to WFCF $ 2,178 $ (331 ) $ (462 ) $ 1,385 $ 2,182 $ (377 ) $ (460 ) $ 1,345 |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reverse split stock | 1-for-4 reverse stock split | 1-for-4 reverse stock split |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accounts receivable, net of allowance | $ 2,508 | $ 2,515 | |
Deferred revenue from contracts with customers | 1,132 | 797 | $ 655 |
Allowance for doubtful accounts | 63 | 76 | |
Amortization of capitalized software costs | 70 | 250 | |
Advertising expense | 600 | 500 | |
Unrecognized tax liability | |||
Interest and penalties | |||
Lease term | 12 months | ||
Software [Member] | |||
Acquired software | $ 900 | $ 900 | |
Long-term Sustainable Growth Rate [Member] | |||
Fair value of assets and liabilities acquired, measurement input | 0.03 | ||
Minimum [Member] | |||
Definite lived intangible assets useful life | 2 years | ||
Remaining lease terms | 1 year | ||
Minimum [Member] | Building [Member] | |||
Property and equipment estimated useful life | 15 years | ||
Minimum [Member] | Other Property and Equipment [Member] | |||
Property and equipment estimated useful life | 2 years | ||
Minimum [Member] | Discount Rate [Member] | |||
Fair value of assets and liabilities acquired, measurement input | 0.19 | ||
Maximum [Member] | |||
Definite lived intangible assets useful life | 15 years | ||
Remaining lease terms | 15 years | ||
Extended lease term | 5 years | ||
Maximum [Member] | Building [Member] | |||
Property and equipment estimated useful life | 20 years | ||
Maximum [Member] | Other Property and Equipment [Member] | |||
Property and equipment estimated useful life | 7 years | ||
Maximum [Member] | Discount Rate [Member] | |||
Fair value of assets and liabilities acquired, measurement input | 0.32 | ||
Accounts Receivable [Member] | No Single Customer [Member] | |||
Threshold for significant customer identification | 10.00% | 10.00% | |
Federal Deposit Insurance Corporation [Member] | |||
Cash insured amount | $ 250 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Revenue Attributable to Each of Our Identified Revenue Categories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 20,076 | $ 20,774 |
Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 18,113 | 18,864 |
Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,077 | 2,222 |
Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | (114) | (312) |
Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 14,254 | 15,564 |
Verification and Certification Service Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 14,254 | 15,564 |
Verification and Certification Service Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Verification and Certification Service Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,859 | 3,300 |
Product Sales [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,859 | 3,300 |
Product Sales [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Product Sales [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software License, Maintenance and Support Services Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 867 | 1,067 |
Software-Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,096 | 843 |
Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 14,254 | 15,564 |
Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,859 | 3,300 |
Software License, Maintenance and Support Services Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 867 | 1,067 |
Software License, Maintenance and Support Services Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software License, Maintenance and Support Services Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 957 | 1,274 |
Software License, Maintenance and Support Services Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | (90) | (207) |
Software-Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,096 | 843 |
Software-Related Consulting Service Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software-Related Consulting Service Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,120 | 948 |
Software-Related Consulting Service Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | (24) | (105) |
Operating Segments [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 18,113 | 18,864 |
Operating Segments [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,077 | 2,222 |
Operating Segments [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | (114) | (312) |
Operating Segments [Member] | Verification and Certification Service Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 14,254 | 15,564 |
Operating Segments [Member] | Product Sales [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,859 | 3,300 |
Operating Segments [Member] | Software License, Maintenance and Support Services Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Software-Related Consulting Service Revenue [Member] | Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Verification and Certification Service Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Verification and Certification Service Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Product Sales [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Product Sales [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Operating Segments [Member] | Software License, Maintenance and Support Services Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 957 | 1,274 |
Operating Segments [Member] | Software License, Maintenance and Support Services Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | (90) | (207) |
Operating Segments [Member] | Software-Related Consulting Service Revenue [Member] | Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,120 | 948 |
Operating Segments [Member] | Software-Related Consulting Service Revenue [Member] | Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ (24) | $ (105) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Changes in Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue January 1 | $ 797 | $ 655 |
Unearned billings | 3,163 | 2,684 |
Revenue recognized | (2,828) | (2,542) |
Deferred revenue December 31 | $ 1,132 | $ 797 |
Business Acquisitions (Details
Business Acquisitions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 21, 2020 | Dec. 17, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Reverse split stock | 1-for-4 reverse stock split | 1-for-4 reverse stock split | ||
SureHarvest Consulting, LLC [Member] | ||||
Percentage of ownership interest acquired | 40.00% | |||
Cash payments for acquisition | $ 1,000 | |||
Number of shares issued upon acquisition, shares | 75,988 | |||
Value of shares issued upon acquisition | $ 500 | |||
Share issued price per share | $ 7.20 | |||
Reverse split stock | 1-for-4 reverse split | |||
Adjustments for deferred income tax | $ 100 | |||
Reversal of allocation of net losses | $ 400 | |||
Postelsia Holdings, Ltd [Member] | ||||
Cash payments for acquisition | $ 300 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation | $ 400 | $ 500 |
Assets Held under Finance Leases [Member] | ||
Depreciation | $ 8 | $ 22 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,659 | $ 3,281 |
Less accumulated depreciation | 2,043 | 1,736 |
Property and equipment, net | 1,616 | 1,545 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 115 | 115 |
Furniture and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 529 | 539 |
Software and Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,876 | 1,449 |
Website Development and Other Enhancements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 184 | 184 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 954 | 992 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1 | $ 2 |
Investment in Progressive Bee_2
Investment in Progressive Beef, LLC (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Dividend income | $ 150 | $ 120 |
Progressive Beef, LLC [Member] | ||
Dividend income | $ 200 | $ 100 |
Intangible and Other Assets (De
Intangible and Other Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 600 | $ 600 |
Intangible and Other Assets - S
Intangible and Other Assets - Schedule of Intangible and Other Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible and other assets, gross | $ 5,257 | $ 4,944 |
Less accumulated amortization | 2,795 | 2,182 |
Intangible and other assets, net | 2,462 | 2,762 |
Tradenames/trademarks (not subject to amortization) | 465 | 465 |
Intangible assets | 2,927 | 3,227 |
Other assets | 21 | 21 |
Intangible and other assets: | 2,948 | 3,248 |
Tradenames and Trademarks [Member] | ||
Intangible and other assets, gross | 417 | 417 |
Accreditations [Member] | ||
Intangible and other assets, gross | $ 85 | 85 |
Estimated useful lives of intangible assets | 5 years | |
Customer Relationships [Member] | ||
Intangible and other assets, gross | $ 3,664 | 3,351 |
Patents [Member] | ||
Intangible and other assets, gross | $ 970 | 970 |
Estimated useful lives of intangible assets | 4 years | |
Non-compete Agreements [Member] | ||
Intangible and other assets, gross | $ 121 | $ 121 |
Estimated useful lives of intangible assets | 5 years | |
Minimum [Member] | Tradenames and Trademarks [Member] | ||
Estimated useful lives of intangible assets | 2 years 6 months | |
Minimum [Member] | Customer Relationships [Member] | ||
Estimated useful lives of intangible assets | 3 years | |
Maximum [Member] | Tradenames and Trademarks [Member] | ||
Estimated useful lives of intangible assets | 8 years | |
Maximum [Member] | Customer Relationships [Member] | ||
Estimated useful lives of intangible assets | 15 years |
Intangible and Other Assets -_2
Intangible and Other Assets - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 370 | |
2022 | 357 | |
2023 | 317 | |
2024 | 306 | |
2025 | 260 | |
Thereafter | 852 | |
Intangible and other assets, net | $ 2,462 | $ 2,762 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment of goodwill | $ 198 | |
SureHarvest Reporting Unit [Member] | ||
Weighted-average cost of capital discount | 22.10% | |
Carrying value of net assets in excess of fair value, percentage | 30.70% | 4.00% |
Impairment of goodwill | $ 200 |
Goodwill - Schedule of Changes
Goodwill - Schedule of Changes in Net Carrying Value of Goodwill by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 2,946 | $ 3,144 |
Impairment | (198) | |
Transfer of assets | ||
Ending Balance | 2,946 | 2,946 |
Verification and Certification Segment [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 1,133 | 1,133 |
Impairment | ||
Transfer of assets | 814 | |
Ending Balance | 1,947 | 1,133 |
Software Sales and Related Consulting Segment [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 1,813 | 2,011 |
Impairment | (198) | |
Transfer of assets | (814) | |
Ending Balance | $ 999 | $ 1,813 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Income and sales taxes payable | $ 168 | $ 171 |
Payroll related accruals | 271 | 201 |
Customer deposits | 31 | 62 |
Professional fees and other expenses | 129 | 240 |
Accrued expenses and other current liabilities | $ 599 | $ 674 |
Notes Payable and Lease Oblig_3
Notes Payable and Lease Obligations (Details Narrative) - USD ($) | Apr. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Extended lease term, description | Extend the leases for up to 5 years each. | ||
Operating lease cost | $ 464,000 | $ 469,000 | |
Rent and lease expense | $ 600,000 | $ 600,000 | |
The Move, LLC [Member] | |||
Ownership interest | 24.30% | ||
Corporate Headquarters [Member] | |||
Operating lease cost | $ 300,000 | ||
Minimum [Member] | |||
Lease term | 1 year | ||
Maximum [Member] | |||
Lease term | 15 years | ||
Revolving Line of Credit [Member] | |||
Revolving line of credit maturity date | Apr. 12, 2022 | ||
Debt interest rate | 4.75% | 6.25% | |
Working capital | $ 75,080 | ||
Interest rate, basis spread | 1.50% | ||
Paycheck Protection Program [Member] | |||
Proceeds from loans | $ 1,000,000 | $ 350,000,000,000 | |
Revolving line of credit maturity date | Apr. 17, 2022 | ||
Debt interest rate | 1.00% | ||
Debt balloon payment | $ 351,000 |
Notes Payable and Lease Oblig_4
Notes Payable and Lease Obligations - Schedule of Long Term Debt (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Paycheck Protection Program Loan | $ 1,035 | |
Less current portion of notes payable and other long-term debt | (463) | |
Notes payable and other long-term debt | $ 572 |
Notes Payable and Lease Oblig_5
Notes Payable and Lease Obligations - Schedule of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Operating lease cost | $ 464 | $ 469 |
Finance lease cost amortization of assets | 8 | 9 |
Interest on finance lease obligations | 5 | 7 |
Variable lease cost | ||
Total net lease cost | $ 477 | $ 485 |
Notes Payable and Lease Oblig_6
Notes Payable and Lease Obligations - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating lease ROU assets | $ 3,030 | $ 3,268 |
Current operating lease liabilities | 268 | 239 |
Noncurrent operating lease liabilities | 3,257 | 3,526 |
Total operating lease liabilities | 3,525 | 3,765 |
Finance leases: Right of use asset, at cost | 67 | 43 |
Finance leases: Accumulated amortization | (30) | (22) |
Finance leases: Right of use asset, net | 37 | 21 |
Current obligations of finance leases | 13 | 8 |
Finance leases, net of current obligations | 31 | 21 |
Total finance lease liabilities | $ 44 | $ 29 |
Weighted average remaining operating lease term (in years) | 10 years | 11 years |
Weighted average remaining finance lease term (in years) | 3 years 8 months 12 days | 3 years |
Operating leases weighted average discount rate | 5.80% | 5.80% |
Finance leases weighted average discount rate | 13.00% | 20.80% |
Related Party [Member] | ||
Operating lease ROU assets | $ 2,755 | $ 2,933 |
Current operating lease liabilities | 179 | 158 |
Noncurrent operating lease liabilities | 3,079 | 3,260 |
Total operating lease liabilities | 3,258 | 3,418 |
Other [Member] | ||
Operating lease ROU assets | 238 | 314 |
Current operating lease liabilities | 89 | 81 |
Noncurrent operating lease liabilities | 178 | 266 |
Total operating lease liabilities | $ 267 | $ 347 |
Notes Payable and Lease Oblig_7
Notes Payable and Lease Obligations - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 449 | $ 430 |
Operating cash flows from finance leases | 5 | 7 |
Financing cash flows from finance leases | 8 | 7 |
Right of use assets obtained in exchange for lease liabilities: Operating leases | $ 3,531 | $ 3,513 |
Notes Payable and Lease Oblig_8
Notes Payable and Lease Obligations - Schedule of Maturities of Operating Lease and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 462 | |
2022 | 466 | |
2023 | 461 | |
2024 | 407 | |
2025 | 405 | |
Thereafter | 2,495 | |
Total lease payments | 4,696 | |
Less amount representing interest | (1,171) | |
Total lease obligations | 3,525 | $ 3,765 |
Less current portion | (268) | (239) |
Long-term lease obligations | 3,257 | 3,526 |
2021 | 18 | |
2022 | 15 | |
2023 | 10 | |
2024 | 5 | |
2025 | 4 | |
Thereafter | ||
Total lease payments | 52 | |
Less amount representing interest | (8) | |
Total lease obligations | 44 | 29 |
Less current portion | (13) | (8) |
Long-term lease obligations | $ 31 | $ 21 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense: International | $ 8 | |
Current income tax expense: Federal | 398 | 438 |
Current income tax expense: State | 79 | 82 |
Total current income tax expense | 485 | 520 |
Deferred income tax benefit: Federal | (20) | (51) |
Deferred income tax benefit: State | (3) | (9) |
Total deferred income tax benefit | (23) | (60) |
Total income tax expense | $ 462 | $ 460 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Expected tax expense | $ 388 | $ 321 |
State tax provision, net | 66 | 55 |
Permanent differences | 8 | 11 |
Foreign | 36 | |
Minority interest | 76 | |
Other, net | (36) | (3) |
Total income tax expense | $ 462 | $ 460 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Accruals, stock-based compensation and other | $ 217 | $ 181 |
Property and equipment | (85) | (15) |
Intangibles assets | 311 | 212 |
Net deferred tax assets | $ 443 | $ 378 |
Stock Buyback Plan (Details Nar
Stock Buyback Plan (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Reverse split stock | 1-for-4 reverse stock split | 1-for-4 reverse stock split |
Stock Buyback Plan - Schedule o
Stock Buyback Plan - Schedule of Stock Buyback Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of shares, beginning | 206,000 | 126,000 |
Number of shares purchased | 132,000 | 80,000 |
Number of shares, ending | 338,000 | 206,000 |
Cost of shares, beginning | $ 1,665 | $ 1,110 |
Cost of shares purchased | 1,037 | 555 |
Cost of shares, ending | $ 2,702 | $ 1,665 |
Average cost per share, beginning | $ 8.08 | $ 8.81 |
Average cost per share purchased | 7.86 | 6.94 |
Average cost per share, ending | $ 7.99 | $ 8.08 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reverse split stock | 1-for-4 reverse stock split | 1-for-4 reverse stock split |
Numbers of options forfeited | 6,195 | 1,832 |
Number of unvested options forfeited | 2,313 | 2,080 |
Restricted Stock [Member] | Minimum [Member] | ||
Number of shares award vesting period | 1 year | |
Restricted Stock [Member] | Maximum [Member] | ||
Number of shares award vesting period | 3 years | |
2006 Equity Incentive Plan [Member] | ||
Shares authorized for issuance under incentive plan | 3,000,000 | |
Number of shares awards outstanding | 37,128 | |
Reverse split stock | 1-for-4 reverse split | |
2016 Equity Incentive Plan [Member] | ||
Shares authorized for issuance under incentive plan | 5,000,000 | |
Number of shares awards outstanding | 4,900,000 | |
Reverse split stock | 1-for-4 reverse split |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total | $ 121 | $ 162 |
Stock Options [Member] | ||
Total | 117 | 147 |
Restricted Stock Awards [Member] | ||
Total | $ 4 | $ 15 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Unrecognized Compensation Cost from Unvested Awards (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Unvested stock options | $ 107 |
Unvested restricted stock awards | 1 |
Total unrecognized compensation expense | 108 |
2021 [Member] | |
Unvested stock options | 82 |
Unvested restricted stock awards | 1 |
Total unrecognized compensation expense | 83 |
2022 [Member] | |
Unvested stock options | 21 |
Unvested restricted stock awards | |
Total unrecognized compensation expense | 21 |
2023 [Member] | |
Unvested stock options | 4 |
Unvested restricted stock awards | |
Total unrecognized compensation expense | 4 |
2024 [Member] | |
Unvested stock options | |
Unvested restricted stock awards | |
Total unrecognized compensation expense |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Estimated Fair Value of Stock Options (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of options awarded to purchase common shares | 7,000,000 | 2,500,000 |
Risk-free interest rate | 1.19% | 1.50% |
Expected volatility | 94.70% | 100.30% |
Assumed dividend yield | 0.00% | 0.00% |
Expected life of options from the date of grant | 9 years 9 months 18 days | 9 years 9 months 18 days |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of stock options, Beginning Balance | 109,281,000 | 108,613,000 |
Number of stock options, Granted | 7,000,000 | 2,500,000 |
Number of stock options, Exercised | (5,000,000) | |
Number of stock options, Expired/Forfeited | (6,195,000) | (1,832,000) |
Number of stock options, Ending Balance | 105,086,000 | 109,281,000 |
Weighted avg exercise price per share, Beginning Balance | $ 5.84 | $ 5.96 |
Weighted avg exercise price per share, Granted | 7.91 | 6.84 |
Weighted avg exercise price per share, Exercised | 0.96 | |
Weighted avg exercise price per share, Expired/Forfeited | 7.36 | 7.44 |
Weighted avg exercise price per share, Ending Balance | 6.25 | 5.84 |
Weighted avg grant date fair value per share, Beginning Balance | 6.12 | 5.88 |
Weighted avg grant date fair value per share, Granted | 6.89 | 6.12 |
Weighted avg grant date fair value per share, Exercised | 0.96 | |
Weighted avg grant date fair value per share, Expired/Forfeited | 7.26 | 7.32 |
Weighted avg grant date fair value per share, Ending Balance | $ 6.06 | $ 6.12 |
Weighted avg remaining contractual life (in years), Beginning Balance | 5 years 11 months 19 days | 6 years 10 months 28 days |
Weighted avg remaining contractual life (in years), Granted | 9 years 3 months 26 days | 9 years 9 months 18 days |
Weighted avg remaining contractual life (in years), Exercised | 6 months | 0 years |
Weighted avg remaining contractual life (in years), Expired/Forfeited | 6 years 11 months 23 days | 7 years 6 months 18 days |
Weighted avg remaining contractual life (in years), Ending Balance | 5 years 4 months 17 days | 5 years 11 months 19 days |
Aggregate intrinsic value, Beginning Balance | $ 601,668 | $ 920,156 |
Aggregate intrinsic value, Ending Balance | 814,090 | $ 601,668 |
Aggregate intrinsic value, Exercisable Ending | 82,972 | |
Aggregate intrinsic value, Unvested Ending | $ 22,114 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of Restricted Stock Activity Under Equity Incentive Plan (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of restricted stock options, Beginning Balance | 1,250,000 | 7,500,000 |
Number of restricted stock options, Granted | ||
Number of restricted stock options, Vested | (6,250,000) | |
Number of restricted stock options, Forfeited | ||
Number of restricted stock options, Ending Balance | 1,250,000 | 1,250,000 |
Weighted avg grant date fair value, Beginning Balance | $ 10.20 | $ 9.52 |
Weighted avg grant date fair value, Granted | ||
Weighted avg grant date fair value, Vested | 9.40 | |
Weighted avg grant date fair value, Forfeited | ||
Weighted avg grant date fair value, Ending Balance | $ 10.20 | $ 10.20 |
Basic and Diluted Net Income _3
Basic and Diluted Net Income Per Share (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Per share - net income attributable to Where Food Comes From, Inc.: | ||
Reverse split stock | 1-for-4 reverse stock split | 1-for-4 reverse stock split |
Basic and Diluted Net Income _4
Basic and Diluted Net Income Per Share - Schedule of Reconciliation of Basic and Diluted Income Per Share Computations (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Per share - net income attributable to Where Food Comes From, Inc.: | ||
Basic:: Weighted average shares outstanding. | 6,162,000 | 6,213,000 |
Diluted: Weighted average shares outstanding | 6,162,000 | 6,213,000 |
Diluted: Weighted average effects of dilutive securities | 59,000 | 44,000 |
Diluted: Total | 6,221,000 | 6,257,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from related parties | $ 39 | $ 5 |
Related party rent expense | $ 500 | $ 500 |
The Move, LLC [Member] | CEO and President [Member] | ||
Jointly-held ownership interest, rate | 24.30% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2017USD ($) | Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | |
Rental payments | $ 600,000 | $ 600,000 | ||
Extended term of operating lease | 12 months | |||
Aggregate matching contributions | $ 200,000 | $ 200,000 | ||
Urbandale, Lowa Office [Member] | ||||
Rental payments | $ 3,400 | |||
Term of operating lease | 2 years | |||
Extended term of operating lease | 3 years | |||
Lease expiration date | Aug. 31, 2022 | |||
The Move, LLC [Member] | CEO and President [Member] | ||||
Jointly-held ownership interest, rate | 24.30% | |||
Castle Rock New Lease [Member] | ||||
Area of land | ft² | 15,700 | |||
Rental payments | $ 40,900 | |||
Leasehold improvements | 800,000 | |||
Lease incentives | 400,000 | |||
New Lease Agreement [Member] | ||||
Rental payments | $ 6,300 | |||
Term of operating lease | 66 months | |||
Lease expiration date | May 1, 2024 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest expense | $ 8 | $ 10 |
Income taxes | 597 | 344 |
Common stock issued in connection with acquisition of non-controlling interest in SureHarvest Services, LLC | 547 | |
Equipment acquired under a capital lease | $ 24 |
Segments (Details Narrative)
Segments (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Integer | |
Segment Reporting [Abstract] | |
Number of operating segment | 1 |
Segments - Schedule of Operatin
Segments - Schedule of Operating Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Goodwill | $ 2,946 | $ 2,946 | $ 3,144 |
Total assets | 19,448 | 18,237 | |
Total revenues | 20,076 | 20,774 | |
Total costs of revenues | 11,148 | 11,695 | |
Gross profit | 8,928 | 9,079 | |
Depreciation & amortization | 997 | 1,097 | |
Segment operating (loss)/income | 1,687 | 1,552 | |
Income tax (benefit)/expense | 462 | 460 | |
Net loss attributable to non-controlling interest | 322 | ||
Net (loss)/income attributable to WFCF | 1,385 | 1,345 | |
Verification and Certification Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 14,254 | 15,564 | |
Product Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 3,859 | 3,300 | |
Software License, Maintenance and Support Services Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 867 | 1,067 | |
Software-Related Consulting Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,096 | 843 | |
Verification and Certification Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 1,947 | 1,133 | 1,133 |
All other assets, net | 17,576 | 16,294 | |
Total assets | 19,523 | 17,427 | |
Total revenues | 18,113 | 18,864 | |
Total costs of revenues | 10,005 | 10,777 | |
Gross profit | 8,108 | 8,087 | |
Depreciation & amortization | 428 | 374 | |
Other operating expenses | 5,664 | 5,624 | |
Segment operating (loss)/income | 2,016 | 2,089 | |
Other expense (income) | (162) | (93) | |
Income tax (benefit)/expense | |||
Net loss attributable to non-controlling interest | |||
Net (loss)/income attributable to WFCF | 2,178 | 2,182 | |
Verification and Certification Segment [Member] | Verification and Certification Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 14,254 | 15,564 | |
Total costs of revenues | 7,497 | 8,628 | |
Verification and Certification Segment [Member] | Product Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 3,859 | 3,300 | |
Total costs of revenues | 2,508 | 2,149 | |
Verification and Certification Segment [Member] | Software License, Maintenance and Support Services Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | |||
Verification and Certification Segment [Member] | Software-Related Consulting Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | |||
Software Sales and Related Consulting Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 999 | 1,813 | $ 2,011 |
All other assets, net | 3,089 | 3,188 | |
Total assets | 4,088 | 5,001 | |
Total revenues | 2,077 | 2,222 | |
Total costs of revenues | 1,233 | 1,102 | |
Gross profit | 844 | 1,120 | |
Depreciation & amortization | 569 | 723 | |
Other operating expenses | 604 | 934 | |
Segment operating (loss)/income | (329) | (537) | |
Other expense (income) | 2 | 162 | |
Income tax (benefit)/expense | |||
Net loss attributable to non-controlling interest | 322 | ||
Net (loss)/income attributable to WFCF | (331) | (377) | |
Software Sales and Related Consulting Segment [Member] | Verification and Certification Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | |||
Software Sales and Related Consulting Segment [Member] | Product Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | |||
Software Sales and Related Consulting Segment [Member] | Software License, Maintenance and Support Services Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 957 | 1,274 | |
Total costs of revenues | 520 | 615 | |
Software Sales and Related Consulting Segment [Member] | Software-Related Consulting Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,120 | 948 | |
Total costs of revenues | 713 | 487 | |
Eliminations and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | |||
All other assets, net | (4,163) | (4,191) | |
Total assets | (4,163) | (4,191) | |
Total revenues | (114) | (312) | |
Total costs of revenues | (90) | (184) | |
Gross profit | (24) | (128) | |
Depreciation & amortization | |||
Other operating expenses | (24) | (128) | |
Segment operating (loss)/income | |||
Other expense (income) | |||
Income tax (benefit)/expense | 462 | 460 | |
Net loss attributable to non-controlling interest | |||
Net (loss)/income attributable to WFCF | (462) | (460) | |
Eliminations and Other [Member] | Verification and Certification Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | (90) | (184) | |
Eliminations and Other [Member] | Product Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Total costs of revenues | |||
Eliminations and Other [Member] | Software License, Maintenance and Support Services Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | (90) | (207) | |
Total costs of revenues | |||
Eliminations and Other [Member] | Software-Related Consulting Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | (24) | (105) | |
Total costs of revenues | |||
Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 2,946 | 2,946 | |
All other assets, net | 16,502 | 15,291 | |
Total assets | 19,448 | 18,237 | |
Total revenues | 20,076 | 20,774 | |
Total costs of revenues | 11,148 | 11,695 | |
Gross profit | 8,928 | 9,079 | |
Depreciation & amortization | 997 | 1,097 | |
Other operating expenses | 6,244 | 6,430 | |
Segment operating (loss)/income | 1,687 | 1,552 | |
Other expense (income) | (160) | 69 | |
Income tax (benefit)/expense | 462 | 460 | |
Net loss attributable to non-controlling interest | 322 | ||
Net (loss)/income attributable to WFCF | 1,385 | 1,345 | |
Consolidated [Member] | Verification and Certification Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 14,254 | 15,564 | |
Total costs of revenues | 7,407 | 8,444 | |
Consolidated [Member] | Product Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 3,859 | 3,300 | |
Total costs of revenues | 2,508 | 2,149 | |
Consolidated [Member] | Software License, Maintenance and Support Services Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 867 | 1,067 | |
Total costs of revenues | 520 | 615 | |
Consolidated [Member] | Software-Related Consulting Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,096 | 843 | |
Total costs of revenues | $ 713 | $ 487 |