Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40314 | |
Entity Registrant Name | WHERE FOOD COMES FROM, INC. | |
Entity Central Index Key | 0001360565 | |
Entity Tax Identification Number | 43-1802805 | |
Entity Incorporation, State or Country Code | CO | |
Entity Address, Address Line One | 202 6th Street | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Castle Rock | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80104 | |
City Area Code | (303) | |
Local Phone Number | 895-3002 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | WFCF | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,655,057 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,400 | $ 4,368 |
Accounts receivable, net of allowance | 2,065 | 2,172 |
Inventory | 970 | 888 |
Prepaid expenses and other current assets | 488 | 463 |
Total current assets | 6,923 | 7,891 |
Property and equipment, net | 916 | 998 |
Right-of-use assets, net | 2,543 | 2,607 |
Equity investments | 1,191 | 991 |
Intangible and other assets, net | 2,257 | 2,340 |
Goodwill, net | 2,946 | 2,946 |
Deferred tax assets, net | 526 | 523 |
Total assets | 17,302 | 18,296 |
Current liabilities: | ||
Accounts payable | 667 | 640 |
Accrued expenses and other current liabilities | 932 | 769 |
Deferred revenue | 1,256 | 1,278 |
Current portion of finance lease obligations | 12 | 9 |
Current portion of operating lease obligations | 338 | 341 |
Total current liabilities | 3,205 | 3,037 |
Finance lease obligations, net of current portion | 51 | 37 |
Operating lease obligation, net of current portion | 2,663 | 2,745 |
Total liabilities | 5,919 | 5,819 |
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; 6,501 (2023) and 6,501 (2022) shares issued, and 5,685 (2023) and 5,775 (2022) shares outstanding | 6 | 6 |
Additional paid-in-capital | 12,160 | 12,145 |
Treasury stock of 817 (2023) and 727 (2022) shares | (8,493) | (7,263) |
Retained earnings | 7,710 | 7,589 |
Total equity | 11,383 | 12,477 |
Total liabilities and stockholders’ equity | $ 17,302 | $ 18,296 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 6,501,000 | 6,501,000 |
Common stock, shares outstanding | 5,685,000 | 5,775,000 |
Treasury stock, shares | 817,000 | 727,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Total revenues | $ 5,267,000 | $ 6,156,000 |
Costs of revenues: | ||
Total costs of revenues | 3,124,000 | 3,759,000 |
Gross profit | 2,143,000 | 2,397,000 |
Selling, general and administrative expenses | 1,988,000 | 1,774,000 |
Income from operations | 155,000 | 623,000 |
Other income/(expense): | ||
Dividend income from Progressive Beef | 50,000 | 50,000 |
Other income, net | 9,000 | |
Loss on foreign currency exchange | (2,000) | (12,000) |
Interest expense | (1,000) | (1,000) |
Income before income taxes | 211,000 | 660,000 |
Income tax expense | 90,000 | 163,000 |
Net income | $ 121,000 | $ 497,000 |
Per share - net income: | ||
Basic | $ 0.02 | $ 0.08 |
Diluted | $ 0.02 | $ 0.08 |
Weighted average number of common shares outstanding: | ||
Basic | 5,730 | 6,067 |
Diluted | 5,799 | 6,150 |
Verification and Certification Service Revenue [Member] | ||
Revenues: | ||
Total revenues | $ 3,806,000 | $ 3,784,000 |
Costs of revenues: | ||
Total costs of revenues | 2,196,000 | 2,036,000 |
Product Sales [Member] | ||
Revenues: | ||
Total revenues | 971,000 | 1,007,000 |
Costs of revenues: | ||
Total costs of revenues | 568,000 | 537,000 |
Software and Related Consulting Revenue [Member] | ||
Revenues: | ||
Total revenues | 490,000 | 1,365,000 |
Costs of revenues: | ||
Total costs of revenues | $ 360,000 | $ 1,186,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net income | $ 121 | $ 497 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 172 | 195 |
Stock-based compensation expense | 15 | 51 |
Deferred tax benefit | (3) | (19) |
Bad debt expense | 13 | 5 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 94 | (27) |
Inventory | (82) | (48) |
Prepaid expenses and other assets | (25) | (56) |
Accounts payable | 27 | 147 |
Accrued expenses and other current liabilities | 164 | 613 |
Deferred revenue | (22) | (236) |
Right of use assets and liabilities, net | (1) | (2) |
Net cash provided by operating activities | 473 | 1,120 |
Investing activities: | ||
Investment in BlueTrace | (200) | |
Purchases of property, equipment and software development costs | (7) | (16) |
Net cash used in investing activities | (207) | (16) |
Financing activities: | ||
Repayments of finance lease obligations | (4) | (3) |
Stock repurchase under Stock Buyback Plan | (1,230) | (422) |
Net cash used in financing activities | (1,234) | (425) |
Net change in cash | (968) | 679 |
Cash at beginning of period | 4,368 | 5,414 |
Cash at end of period | $ 3,400 | $ 6,093 |
Consolidated Statement of Equit
Consolidated Statement of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2021 | $ 13,749 | $ 6 | $ 11,955 | $ (3,807) | $ 5,595 |
Balance, shares at Dec. 31, 2021 | 6,071 | ||||
Stock-based compensation expense | 51 | 51 | |||
Stock-based compensation expense, shares | 2 | ||||
Repurchase of common shares under Stock Buyback Plan | (422) | (422) | |||
Repurchase of common shares under Stock Buyback Plan, shares | (34) | ||||
Net income | 497 | 497 | |||
Balance at Mar. 31, 2022 | 13,875 | $ 6 | 12,006 | (4,229) | 6,092 |
Balance, shares at Mar. 31, 2022 | 6,039 | ||||
Balance at Dec. 31, 2022 | 12,477 | $ 6 | 12,145 | (7,263) | 7,589 |
Balance, shares at Dec. 31, 2022 | 5,775 | ||||
Stock-based compensation expense | 15 | 15 | |||
Repurchase of common shares under Stock Buyback Plan | (1,230) | (1,230) | |||
Repurchase of common shares under Stock Buyback Plan, shares | (90) | ||||
Net income | 121 | 121 | |||
Balance at Mar. 31, 2023 | $ 11,383 | $ 6 | $ 12,160 | $ (8,493) | $ 7,710 |
Balance, shares at Mar. 31, 2023 | 5,685 |
The Company and Basis of Presen
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [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, agricultural and aquaculture products are accurate. We care about food, agricultural and aquaculture, 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, restaurants 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 a wide range of professional consulting services and technology solutions that generate incremental revenue specific to the food and agricultural industry and drive sustainable value creation. Finally, the Company’s Where Food Comes From Source Verified® retail and restaurant labeling program utilizes the verification of product attributes to connect consumers directly to the source of the food they purchase through product labeling and web-based information sharing and education. Most of our customers are located throughout the United States. Basis of Presentation Our unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the results of operations, financial position and cash flows of and its subsidiaries, Where Food Comes From Organic, Inc. (“WFCFO”), Validus Verifications Services, LLC (“Validus”), SureHarvest Services, Inc. (“SureHarvest”), and Postelsia Holdings, Ltd. (“Postelsia”) (collectively referred to as “we,” “us,” and “our” throughout this Form 10-Q) 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. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements and footnotes thereto for the year ended December 31, 2022, included in our Form 10-K filed on February 23, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. However, we believe that the disclosures are adequate to make the information presented not misleading. Certain prior year amounts have been reclassified to conform to current year presentation. Net income and shareholders’ equity were not affected by these reclassifications. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. The consolidated operating results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for any other interim period of any future year. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Seasonality Our business is subject to seasonal fluctuations annually. Significant portions of our verification and certification service revenue are typically realized during late May through early October when the calf marketings and the growing seasons are at their peak. Additionally, the cattle industry is cyclical by nature based on factors impacting current and future supplies such as drought-induced feedlot placements, higher cow and heifer slaughter, and lower auction receipts. The production lags inherent to this industry lead to long-lasting impacts of production decisions. For example, increased liquidation implies tighter supplies for next year. Similarly, times of herd expansion are typically a multi-year period. These cycles typically last roughly 10 years. The beginning of 2023 marks the ninth year of the current cycle that began in 2014. We are currently in the contraction phase of the cycle after peaking in 2018-2019. How long we continue to contract will be directly impacted by drought and pasture conditions. Because of the seasonality of the business and cyclical nature of our industry, results for any quarter are not necessarily indicative of the results that may be achieved for any other quarter or for the full fiscal year. 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 were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. |
Basic and Diluted Net Income pe
Basic and Diluted Net Income per Share | 3 Months Ended |
Mar. 31, 2023 | |
Per share - net income: | |
Basic and Diluted Net Income per Share | Note 2 – 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 obtained thereby were used 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 (amounts in thousands): Schedule of Reconciliation of Basic and Diluted Income Per Share Computations 2023 2022 Three months ended March 31, 2023 2022 Basic: Weighted average shares outstanding 5,730 6,067 Diluted: Weighted average shares outstanding 5,730 6,067 Weighted average effects of dilutive securities 69 83 Total 5,799 6,150 Antidilutive securities: 17 17 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. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) |
Equity Investments
Equity Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Equity Investments | Note 3 – Equity Investments For the three months ended March 31, 2023 and 2022, the Company received dividend income from Progressive Beef of $ 50,000 On March 29, 2023, the Company made an equity investment of $ 0.2 Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. We determine the fair value of our investments on a quarterly basis in accordance with ASC 820, Fair Value Measurement ● investment’s earnings performance, credit rating, asset quality, or business prospects of the investee; ● has there been significant adverse changes in the regulatory, economic, or technological environment of the investee; ● has there been a significant adverse in the general market condition of either the geographical area or the industry in which the investee operates; and, ● has there been a bona fide offer to purchase or sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of our investment. If the current carrying value of each individual investment significantly exceeds the fair value so determined, a permanent impairment loss has occurred with respect to the individual investment in the amount equal to the difference between the carrying value and the price determined. Impairment losses are recognized within the Other income/(expense) section in the consolidated statements of operations in the period in which the impairment is identified. The impaired investment is written down to the fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same investment held within Other income/(expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the investment sold immediately prior to sale. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) |
Intangible and Other Assets
Intangible and Other Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible and Other Assets | Note 4 – Intangible and Other Assets The following table summarizes our intangible and other assets (amounts in thousands, except useful life): Schedule of Intangible and Other Assets March 31, 2023 December 31, 2022 Estimated Useful Life Intangible assets subject to amortization: Tradenames and trademarks $ 417 $ 417 2.5 8.0 Accreditations 75 75 5.0 Customer relationships 3,664 3,664 3.0 15.0 Patents 970 970 4.0 Non-compete agreements 121 121 5.0 Intangible and other assets, gross 5,247 5,247 Less accumulated amortization 3,593 3,511 Intangible and other assets, Net 1,654 1,736 Cryptocurrency (not subject to amortization) 116 116 Tradenames/trademarks (not subject to amortization) 465 465 Intangible assets 2,235 2,317 Other assets 22 23 Intangible and other assets: $ 2,257 $ 2,340 For the three months ended March 31, 2023 and 2022, we have not sold any digital assets and have no 116,000 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 5 – Accrued Expenses and Other Current Liabilities The following table summarizes our accrued expenses and other current liabilities as of (amounts in thousands): Schedule of Accrued Expenses and Other Current Liabilities March 31, 2023 December 31, 2022 Income and sales taxes payable $ 80 $ 14 Payroll related accruals 469 326 Customer deposits 121 35 Professional fees and other expenses 262 394 Accrued expenses and other current liabilities $ 932 $ 769 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 6 – Notes Payable Unison Revolving Line of Credit The Company has a revolving line of credit (“LOC”) agreement which matures April 12, 2025 75,080 1.50 maturity 9.5 9.0 no Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 7 – 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, stock awards 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 stock awards and 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 operations. The amount of stock-based compensation expense is as follows (amounts in thousands): Schedule of Stock-based Compensation Expense 2023 2022 Three months ended March 31, 2023 2022 Stock options $ 15 $ 31 Stock awards - 20 Total $ 15 $ 51 Stock-based compensation expense $ 15 $ 51 During the three months ended March 31, 2023 and 2022, no During the three months ended March 31, 2023, no 1,500 13.45 The estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (amounts in thousands): Schedule of Unrecognized Compensation Cost from Unvested Awards Years ended December 31st: Unvested stock options Unvested restricted stock awards Total unrecognized compensation expense 2023 (remaining nine months) $ 25 $ - $ 25 2024 11 - 11 2025 - - - $ 36 $ - $ 36 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. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Stock Option Activity Stock option activity under our Equity Incentive Plans is summarized as follows: Schedule of Stock Option Activity Weighted avg. Weighted avg. Weighted avg. remaining Number of exercise price grant date fair contractual life Aggregate awards per share value per share (in years) intrinsic value Outstanding, December 31, 2022 92,347 $ 8.67 $ 7.77 5.31 $ 502,688 Granted - $ - $ - - Exercised - $ - $ - - Expired/Forfeited (6,250 ) $ - $ - - Outstanding, March 31, 2023 86,097 $ 8.56 $ 7.60 5.07 $ 436,285 Exercisable, March 31, 2023 74,104 $ 7.11 $ 7.63 4.56 $ 432,251 Unvested, March 31, 2023 11,993 $ 14.36 $ 10.63 8.20 $ 4,034 The aggregate intrinsic value represents the total pre-tax intrinsic value (the aggregate difference between the closing price of our common stock on March 31, 2023 and the exercise price for the in-the-money options) that would have been received by the option holders if all the in-the-money options had been exercised on March 31, 2023. Stock Activity There has not been any non-vested stock award activity under our Equity Incentive Plans for the three months ended March 31, 2023 and 2022. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 – Income Taxes Deferred tax assets and liabilities have been determined based upon the differences between the financial statement amounts and the tax bases of assets and liabilities as measured by enacted tax rates expected to be in effect when these differences are expected to reverse. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision or benefit for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. For the three months ended March 31, 2023 we recorded an income tax expense of approximately $ 90,000 163,000 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 9 - Revenue Recognition Disaggregation of Revenue We have identified three material revenue categories in our business: (i) verification and certification service revenue, (ii) product sales, (iii) software and related consulting revenue. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Revenue attributable to each of our identified revenue categories is disaggregated in the table below (amounts in thousands). Schedule of Revenue Attributable to Each of Our Identified Revenue Categories Three months ended March 31, 2023 Three months ended March 31, 2022 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 $ 3,806 $ - $ - $ 3,806 $ 3,784 $ - $ - $ 3,784 Product sales 971 - - 971 1,007 - - 1,007 Software and related consulting revenue - 490 - 490 - 1,365 - 1,365 Total revenues $ 4,777 $ 490 $ - $ 5,267 $ 4,791 $ 1,365 $ - $ 6,156 Contract Balances As of March 31, 2023 and December 31, 2022, accounts receivable from contracts with customers, net of allowance for doubtful accounts, was approximately $ 2.1 2.2 As of March 31, 2023 and December 31, 2022, deferred revenue from contracts with customers was approximately $ 1.3 The following table reflects the changes in our contract liabilities during the three month period ended March 31, 2023 (amounts in thousands): Schedule of Changes in Contract Liabilities Deferred revenue: Unearned revenue December 31, 2022 $ 1,278 Unearned billings 648 Revenue recognized (670 ) Unearned revenue March 31, 2023 $ 1,256 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | Note 10 – Leases The components of lease expense were as follows (amounts in thousands): Schedule of Lease Expense 2023 2022 Three months ended March 31, 2023 2022 Operating lease cost $ 123 $ 123 Finance lease cost Amortization of assets 4 2 Interest on finance lease obligations 1 1 Variable lease cost - - Total net lease cost $ 128 $ 126 Included in the table above, for the three months ended March 31, 2023 and 2022, is $ 0.1 This space is being leased from The Move, LLC. Our CEO and President, each a related party to WFCF, have a 24.3 Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Supplemental balance sheet information related to leases was as follows (amounts in thousands): Schedule of Supplemental Balance Sheet Information Related to Leases March 31, 2023 December 31, 2022 Operating leases: Related Party Other Total Related Party Other Total Operating lease ROU assets $ 2,317 $ 165 $ 2,482 $ 2,369 $ 193 $ 2,562 Current operating lease liabilities $ 230 $ 108 $ 338 $ 224 $ 117 $ 341 Noncurrent operating lease liabilities 2,596 67 2,663 2,656 89 2,745 Total operating lease liabilities $ 2,826 $ 175 $ 3,001 $ 2,880 $ 206 $ 3,086 Finance leases: March 31, 2023 December 31, 2022 Right of use asset, at cost $ 75 $ 70 Accumulated amortization (14 ) (25 ) Property and equipment, net $ 61 $ 45 Current obligations of finance leases $ 12 $ 9 Finance leases, net of current obligations 51 37 Total finance lease liabilities $ 63 $ 46 Weighted average remaining lease term (in years): Operating leases 8.0 8.2 Finance leases 4.4 4.4 Weighted average discount rate: Operating leases 5.8 % 5.8 % Finance leases 8.2 % 7.8 % Supplemental cash flow and other information related to leases was as follows (amounts in thousands): Schedule of Supplemental Cash Flow Information Related to Leases 2023 2022 Three months ended March 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 128 $ 125 Operating cash flows from finance leases $ 1 $ 1 Financing cash flows from finance leases $ 3 $ 3 ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ - Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Maturities of lease liabilities were as follows (amounts in thousands): Schedule of Maturities of Operating Lease and Finance Lease Liabilities Years Ending December 31st, Operating Leases Finance Leases 2023 (nine remaining months) $ 379 $ 13 2024 446 18 2025 435 19 2026 430 14 2027 430 12 Thereafter 1,648 - Total lease payments 3,768 76 Less amount representing interest (767 ) (13 ) Total lease obligations 3,001 63 Less current portion (338 ) (12 ) Long-term lease obligations $ 2,663 $ 51 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies 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. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | Note 12 - 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, WFCFO 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 and related consulting reportable segment. SureHarvest, which includes Postelsia, is the sole operating unit under the software and related consulting reportable segment. This segment includes software and 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. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) The Company eliminates intercompany transfers between segments for management reporting purposes. The following table shows information for reportable operating segments (amounts in thousands): Schedule of Operating Segments Three months ended March 31, 2023 Three months ended March 31, 2022 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 $ 1,947 $ 999 $ - $ 2,946 All other assets, net 7,179 2,609 4,568 14,356 14,860 3,815 (1,267 ) 17,408 Total assets $ 9,126 $ 3,608 $ 4,568 $ 17,302 $ 16,807 $ 4,814 $ (1,267 ) $ 20,354 Revenues: Verification and certification service revenue $ 3,806 $ - $ - $ 3,806 $ 3,784 $ - $ - $ 3,784 Product sales 971 - - 971 1,007 - - 1,007 Software and related consulting revenue - 490 - 490 - 1,365 - 1,365 Total revenues $ 4,777 $ 490 $ - $ 5,267 $ 4,791 $ 1,365 $ - $ 6,156 Costs of revenues: Costs of verification and certification services 2,196 - - 2,196 2,036 - - 2,036 Costs of products 568 - - 568 537 - - 537 Costs of software and related consulting - 360 - 360 - 1,186 - 1,186 Total costs of revenues 2,764 360 - 3,124 2,573 1,186 - 3,759 Gross profit 2,013 130 - 2,143 2,218 179 - 2,397 Depreciation & amortization 130 42 - 172 145 50 - 195 Other operating expenses 1,746 70 - 1,816 1,513 66 - 1,579 Segment operating income/(loss) $ 137 $ 18 $ - $ 155 $ 560 $ 63 $ - $ 623 Other items to reconcile segment operating income (loss) to net income/(loss): Other income / (expense) 57 (1 ) - 56 49 (12 ) - 37 Income tax expense - - (90 ) (90 ) - - (163 ) (163 ) Net income/(loss) $ 194 $ 17 $ (90 ) $ 121 $ 609 $ 51 $ (163 ) $ 497 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 13 – Supplemental Cash Flow Information Schedule of Supplemental Cash Flow Information Three months ended March 31, (Amounts in thousands) 2023 2022 Cash paid during the year: Interest expense $ - $ - Income taxes $ 3 $ - |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – 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. |
Basic and Diluted Net Income _2
Basic and Diluted Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Per share - net income: | |
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 (amounts in thousands): Schedule of Reconciliation of Basic and Diluted Income Per Share Computations 2023 2022 Three months ended March 31, 2023 2022 Basic: Weighted average shares outstanding 5,730 6,067 Diluted: Weighted average shares outstanding 5,730 6,067 Weighted average effects of dilutive securities 69 83 Total 5,799 6,150 Antidilutive securities: 17 17 |
Intangible and Other Assets (Ta
Intangible and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible and Other Assets | The following table summarizes our intangible and other assets (amounts in thousands, except useful life): Schedule of Intangible and Other Assets March 31, 2023 December 31, 2022 Estimated Useful Life Intangible assets subject to amortization: Tradenames and trademarks $ 417 $ 417 2.5 8.0 Accreditations 75 75 5.0 Customer relationships 3,664 3,664 3.0 15.0 Patents 970 970 4.0 Non-compete agreements 121 121 5.0 Intangible and other assets, gross 5,247 5,247 Less accumulated amortization 3,593 3,511 Intangible and other assets, Net 1,654 1,736 Cryptocurrency (not subject to amortization) 116 116 Tradenames/trademarks (not subject to amortization) 465 465 Intangible assets 2,235 2,317 Other assets 22 23 Intangible and other assets: $ 2,257 $ 2,340 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 (amounts in thousands): Schedule of Accrued Expenses and Other Current Liabilities March 31, 2023 December 31, 2022 Income and sales taxes payable $ 80 $ 14 Payroll related accruals 469 326 Customer deposits 121 35 Professional fees and other expenses 262 394 Accrued expenses and other current liabilities $ 932 $ 769 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense is as follows (amounts in thousands): Schedule of Stock-based Compensation Expense 2023 2022 Three months ended March 31, 2023 2022 Stock options $ 15 $ 31 Stock awards - 20 Total $ 15 $ 51 Stock-based compensation expense $ 15 $ 51 |
Schedule of Unrecognized Compensation Cost from Unvested Awards | The estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (amounts in thousands): Schedule of Unrecognized Compensation Cost from Unvested Awards Years ended December 31st: Unvested stock options Unvested restricted stock awards Total unrecognized compensation expense 2023 (remaining nine months) $ 25 $ - $ 25 2024 11 - 11 2025 - - - $ 36 $ - $ 36 |
Schedule of Stock Option Activity | Stock option activity under our Equity Incentive Plans is summarized as follows: Schedule of Stock Option Activity Weighted avg. Weighted avg. Weighted avg. remaining Number of exercise price grant date fair contractual life Aggregate awards per share value per share (in years) intrinsic value Outstanding, December 31, 2022 92,347 $ 8.67 $ 7.77 5.31 $ 502,688 Granted - $ - $ - - Exercised - $ - $ - - Expired/Forfeited (6,250 ) $ - $ - - Outstanding, March 31, 2023 86,097 $ 8.56 $ 7.60 5.07 $ 436,285 Exercisable, March 31, 2023 74,104 $ 7.11 $ 7.63 4.56 $ 432,251 Unvested, March 31, 2023 11,993 $ 14.36 $ 10.63 8.20 $ 4,034 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [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). Schedule of Revenue Attributable to Each of Our Identified Revenue Categories Three months ended March 31, 2023 Three months ended March 31, 2022 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 $ 3,806 $ - $ - $ 3,806 $ 3,784 $ - $ - $ 3,784 Product sales 971 - - 971 1,007 - - 1,007 Software and related consulting revenue - 490 - 490 - 1,365 - 1,365 Total revenues $ 4,777 $ 490 $ - $ 5,267 $ 4,791 $ 1,365 $ - $ 6,156 |
Schedule of Changes in Contract Liabilities | The following table reflects the changes in our contract liabilities during the three month period ended March 31, 2023 (amounts in thousands): Schedule of Changes in Contract Liabilities Deferred revenue: Unearned revenue December 31, 2022 $ 1,278 Unearned billings 648 Revenue recognized (670 ) Unearned revenue March 31, 2023 $ 1,256 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Schedule of Lease Expense | The components of lease expense were as follows (amounts in thousands): Schedule of Lease Expense 2023 2022 Three months ended March 31, 2023 2022 Operating lease cost $ 123 $ 123 Finance lease cost Amortization of assets 4 2 Interest on finance lease obligations 1 1 Variable lease cost - - Total net lease cost $ 128 $ 126 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (amounts in thousands): Schedule of Supplemental Balance Sheet Information Related to Leases March 31, 2023 December 31, 2022 Operating leases: Related Party Other Total Related Party Other Total Operating lease ROU assets $ 2,317 $ 165 $ 2,482 $ 2,369 $ 193 $ 2,562 Current operating lease liabilities $ 230 $ 108 $ 338 $ 224 $ 117 $ 341 Noncurrent operating lease liabilities 2,596 67 2,663 2,656 89 2,745 Total operating lease liabilities $ 2,826 $ 175 $ 3,001 $ 2,880 $ 206 $ 3,086 Finance leases: March 31, 2023 December 31, 2022 Right of use asset, at cost $ 75 $ 70 Accumulated amortization (14 ) (25 ) Property and equipment, net $ 61 $ 45 Current obligations of finance leases $ 12 $ 9 Finance leases, net of current obligations 51 37 Total finance lease liabilities $ 63 $ 46 Weighted average remaining lease term (in years): Operating leases 8.0 8.2 Finance leases 4.4 4.4 Weighted average discount rate: Operating leases 5.8 % 5.8 % Finance leases 8.2 % 7.8 % |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow and other information related to leases was as follows (amounts in thousands): Schedule of Supplemental Cash Flow Information Related to Leases 2023 2022 Three months ended March 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 128 $ 125 Operating cash flows from finance leases $ 1 $ 1 Financing cash flows from finance leases $ 3 $ 3 ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ - |
Schedule of Maturities of Operating Lease and Finance Lease Liabilities | Maturities of lease liabilities were as follows (amounts in thousands): Schedule of Maturities of Operating Lease and Finance Lease Liabilities Years Ending December 31st, Operating Leases Finance Leases 2023 (nine remaining months) $ 379 $ 13 2024 446 18 2025 435 19 2026 430 14 2027 430 12 Thereafter 1,648 - Total lease payments 3,768 76 Less amount representing interest (767 ) (13 ) Total lease obligations 3,001 63 Less current portion (338 ) (12 ) Long-term lease obligations $ 2,663 $ 51 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | The Company eliminates intercompany transfers between segments for management reporting purposes. The following table shows information for reportable operating segments (amounts in thousands): Schedule of Operating Segments Three months ended March 31, 2023 Three months ended March 31, 2022 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 $ 1,947 $ 999 $ - $ 2,946 All other assets, net 7,179 2,609 4,568 14,356 14,860 3,815 (1,267 ) 17,408 Total assets $ 9,126 $ 3,608 $ 4,568 $ 17,302 $ 16,807 $ 4,814 $ (1,267 ) $ 20,354 Revenues: Verification and certification service revenue $ 3,806 $ - $ - $ 3,806 $ 3,784 $ - $ - $ 3,784 Product sales 971 - - 971 1,007 - - 1,007 Software and related consulting revenue - 490 - 490 - 1,365 - 1,365 Total revenues $ 4,777 $ 490 $ - $ 5,267 $ 4,791 $ 1,365 $ - $ 6,156 Costs of revenues: Costs of verification and certification services 2,196 - - 2,196 2,036 - - 2,036 Costs of products 568 - - 568 537 - - 537 Costs of software and related consulting - 360 - 360 - 1,186 - 1,186 Total costs of revenues 2,764 360 - 3,124 2,573 1,186 - 3,759 Gross profit 2,013 130 - 2,143 2,218 179 - 2,397 Depreciation & amortization 130 42 - 172 145 50 - 195 Other operating expenses 1,746 70 - 1,816 1,513 66 - 1,579 Segment operating income/(loss) $ 137 $ 18 $ - $ 155 $ 560 $ 63 $ - $ 623 Other items to reconcile segment operating income (loss) to net income/(loss): Other income / (expense) 57 (1 ) - 56 49 (12 ) - 37 Income tax expense - - (90 ) (90 ) - - (163 ) (163 ) Net income/(loss) $ 194 $ 17 $ (90 ) $ 121 $ 609 $ 51 $ (163 ) $ 497 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Schedule of Supplemental Cash Flow Information Three months ended March 31, (Amounts in thousands) 2023 2022 Cash paid during the year: Interest expense $ - $ - Income taxes $ 3 $ - |
Schedule of Reconciliation of B
Schedule of Reconciliation of Basic and Diluted Income Per Share Computations (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic: | ||
Weighted average shares outstanding | 5,730 | 6,067 |
Diluted: | ||
Weighted average shares outstanding | 5,730 | 6,067 |
Weighted average effects of dilutive securities | 69 | 83 |
Total | 5,799 | 6,150 |
Antidilutive securities: | 17 | 17 |
Equity Investments (Details Nar
Equity Investments (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||
Dividend income | $ 50 | $ 50 | |
Equity investment in private placement | $ 200 | ||
Private Placement [Member] | Equity Method Investments [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Equity investment in private placement | $ 200 |
Schedule of Intangible and Othe
Schedule of Intangible and Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 5,247 | $ 5,247 |
Less accumulated amortization | 3,593 | 3,511 |
Intangible and other assets, Net | 1,654 | 1,736 |
Cryptocurrency (not subject to amortization) | 116 | 116 |
Tradenames/trademarks (not subject to amortization) | 465 | 465 |
Intangible assets | 2,235 | 2,317 |
Other assets | 22 | 23 |
Intangible and other assets: | 2,257 | 2,340 |
Trademarks and Trade Names [Member] | ||
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 417 | 417 |
Minimum [Member] | Trademarks and Trade Names [Member] | ||
Intangible assets subject to amortization: | ||
Estimated useful lives of intangible assets | 2 years 6 months | |
Minimum [Member] | Customer Relationships [Member] | ||
Intangible assets subject to amortization: | ||
Estimated useful lives of intangible assets | 3 years | |
Maximum [Member] | Trademarks and Trade Names [Member] | ||
Intangible assets subject to amortization: | ||
Estimated useful lives of intangible assets | 8 years | |
Maximum [Member] | Customer Relationships [Member] | ||
Intangible assets subject to amortization: | ||
Estimated useful lives of intangible assets | 15 years | |
Accreditations [Member] | ||
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 75 | 75 |
Estimated useful lives of intangible assets | 5 years | |
Customer Relationships [Member] | ||
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 3,664 | 3,664 |
Patents [Member] | ||
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 970 | 970 |
Estimated useful lives of intangible assets | 4 years | |
Noncompete Agreements [Member] | ||
Intangible assets subject to amortization: | ||
Intangible and other assets, gross | $ 121 | $ 121 |
Estimated useful lives of intangible assets | 5 years |
Intangible and Other Assets (De
Intangible and Other Assets (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment loss | $ 0 | $ 0 | |
Digital assets held | $ 116,000 | $ 116,000 |
Schedule of Accrued Expenses an
Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Income and sales taxes payable | $ 80 | $ 14 |
Payroll related accruals | 469 | 326 |
Customer deposits | 121 | 35 |
Professional fees and other expenses | 262 | 394 |
Accrued expenses and other current liabilities | $ 932 | $ 769 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||
Line of credit, working capital | $ 75,080 | |
Line of credit, outstanding amount | $ 0 | $ 0 |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving line of credit, maturity date | Apr. 12, 2025 | |
Line of credit, prime interest rate | 1.50% | |
Line of credit, interest rate | 9.50% | 9% |
Schedule of Stock-based Compens
Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 15 | $ 51 |
Share-Based Payment Arrangement, Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock-based compensation expense | 15 | 31 |
Employee Stock Award [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 20 |
Schedule of Unrecognized Compen
Schedule of Unrecognized Compensation Cost from Unvested Awards (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unvested stock options | $ 36 |
Unvested restricted stock awards | |
Total unrecognized compensation expense | 36 |
2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unvested stock options | 25 |
Unvested restricted stock awards | |
Total unrecognized compensation expense | 25 |
2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unvested stock options | 11 |
Unvested restricted stock awards | |
Total unrecognized compensation expense | 11 |
2025 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unvested stock options | |
Unvested restricted stock awards | |
Total unrecognized compensation expense |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of awards Outstanding, Balance | shares | 92,347 |
Weighted avg. exercise price per share, Balance | $ 8.67 |
Weighted avg. grant date fair value per share, Balance | $ 7.77 |
Weighted avg. remaining contractual life (in years), Balance | 5 years 3 months 21 days |
Aggregate intrinsic value, Balance | $ | $ 502,688 |
Number of awards, Granted | shares | |
Weighted avg. exercise price per share, Granted | |
Weighted avg. grant date fair value per share, Granted | |
Weighted avg. remaining contractual life (in years), Granted | |
Number of awards, Exercised | shares | |
Weighted avg. exercise price per share, Exercised | |
Weighted avg. grant date fair value per share, Exercised | |
Weighted avg. remaining contractual life (in years), Exercised | |
Number of awards Expired/Forfeited | shares | (6,250) |
Weighted avg. exercise price per share, Expired/Forfeited | |
Weighted avg. grant date fair value per share, Expired/Forfeited | |
Weighted avg. remaining contractual life (in years), Expired/Forfeited | |
Number of awards Outstanding, Balance | shares | 86,097 |
Weighted avg. exercise price per share, Balance | $ 8.56 |
Weighted avg. grant date fair value per share, Balance | $ 7.60 |
Weighted avg. remaining contractual life (in years), Balance | 5 years 25 days |
Aggregate intrinsic value, Balance | $ | $ 436,285 |
Number of awards, Exercisable | shares | 74,104 |
Weighted avg. exercise price per share, Exercisable | $ 7.11 |
Weighted avg. grant date fair value per share, Exercisable | $ 7.63 |
Weighted avg. remaining contractual life (in years), Exercisable | 4 years 6 months 21 days |
Aggregate intrinsic value, Exercisable | $ | $ 432,251 |
Number of awards, Unvested | shares | 11,993 |
Weighted avg. exercise price per share, Unvested | $ 14.36 |
Weighted avg. grant date fair value per share, Unvested | $ 10.63 |
Weighted avg. remaining contractual life (in years), Unvested | 8 years 2 months 12 days |
Aggregate intrinsic value, Unvested | $ | $ 4,034 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of common stock shares awarded | 0 | 1,500 |
Fair market value price | $ 13.45 | |
Employees [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of common stock shares awarded | 0 | 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax, expense | $ 90,000 | $ 163,000 |
Schedule of Revenue Attributabl
Schedule of Revenue Attributable to Each of Our Identified Revenue Categories (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 5,267 | $ 6,156 |
Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,806 | 3,784 |
Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 971 | 1,007 |
Software Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 490 | 1,365 |
Verification and Certification Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,777 | 4,791 |
Verification and Certification Segment [Member] | Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,806 | 3,784 |
Verification and Certification Segment [Member] | Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 971 | 1,007 |
Verification and Certification Segment [Member] | Software Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software Sales and Related Consulting Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 490 | 1,365 |
Software Sales and Related Consulting Segment [Member] | Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software Sales and Related Consulting Segment [Member] | Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Software Sales and Related Consulting Segment [Member] | Software Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 490 | 1,365 |
Eliminations and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Eliminations and Other [Member] | Verification and Certification Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Eliminations and Other [Member] | Product Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | ||
Eliminations and Other [Member] | Software Related Consulting Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues |
Schedule of Changes in Contract
Schedule of Changes in Contract Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Unearned revenue December 31, 2022 | $ 1,278 |
Unearned billings | 648 |
Revenue recognized | (670) |
Unearned revenue March 31, 2023 | $ 1,256 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Allowance for doubtful accounts, net | $ 2,100 | $ 2,200 |
Deferred revenue | $ 1,256 | $ 1,278 |
Schedule of Lease Expense (Deta
Schedule of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases | ||
Operating lease cost | $ 123 | $ 123 |
Amortization of assets | 4 | 2 |
Interest on finance lease obligations | 1 | 1 |
Variable lease cost | ||
Total net lease cost | $ 128 | $ 126 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Operating lease ROU assets | $ 2,482 | $ 2,562 |
Current operating lease liabilities | 338 | 341 |
Noncurrent operating lease liabilities | 2,663 | 2,745 |
Total operating lease liabilities | 3,001 | 3,086 |
Right of use asset, at cost | 75 | 70 |
Accumulated amortization | (14) | (25) |
Property and equipment, net | 61 | 45 |
Current obligations of finance leases | 12 | 9 |
Finance leases, net of current obligations | 51 | 37 |
Total finance lease liabilities | $ 63 | $ 46 |
Weighted average remaining operating lease term (in years) | 8 years | 8 years 2 months 12 days |
Weighted average remaining finance lease term (in years) | 4 years 4 months 24 days | 4 years 4 months 24 days |
Operating leases weighted average discount rate | 5.80% | 5.80% |
Finance leases weighted average discount rate | 8.20% | 7.80% |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Operating lease ROU assets | $ 2,317 | $ 2,369 |
Current operating lease liabilities | 230 | 224 |
Noncurrent operating lease liabilities | 2,596 | 2,656 |
Total operating lease liabilities | 2,826 | 2,880 |
Other [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Operating lease ROU assets | 165 | 193 |
Current operating lease liabilities | 108 | 117 |
Noncurrent operating lease liabilities | 67 | 89 |
Total operating lease liabilities | $ 175 | $ 206 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases | ||
Operating cash flows from operating leases | $ 128 | $ 125 |
Operating cash flows from finance leases | 1 | 1 |
Financing cash flows from finance leases | 3 | 3 |
Right of use assets obtained in exchange for lease liabilities: Operating leases |
Schedule of Maturities of Opera
Schedule of Maturities of Operating Lease and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
2023 (nine remaining months) | $ 379 | |
Operating Leases, 2024 | 446 | |
Operating Leases, 2025 | 435 | |
Operating Leases, 2026 | 430 | |
Operating Leases, 2027 | 430 | |
Operating Leases, Thereafter | 1,648 | |
Operating Leases, Total lease payments | 3,768 | |
Operating Leases, Less amount representing interest | (767) | |
Operating Leases, Total lease obligations | 3,001 | $ 3,086 |
Operating Leases, Less current portion | (338) | (341) |
Operating Leases, Long-term lease obligations | 2,663 | 2,745 |
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
2023 (nine remaining months) | 13 | |
Finance Leases, 2024 | 18 | |
Finance Leases, 2025 | 19 | |
Finance Leases, 2026 | 14 | |
Finance Leases, 2027 | 12 | |
Finance Leases, Thereafter | ||
Finance Leases, Total lease payments | 76 | |
Finance Leases, Less amount representing interest | (13) | |
Finance Leases, Total lease obligations | 63 | 46 |
Finance Leases, Less current portion | (12) | (9) |
Finance Leases, Long-term lease obligations | $ 51 | $ 37 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 123 | $ 123 |
The Move LLC [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Ownership interest percentage | 24.30% | |
Corporate Headquarters [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 100 | $ 100 |
Schedule of Operating Segments
Schedule of Operating Segments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Assets: | ||
Goodwill | $ 2,946,000 | $ 2,946,000 |
All other assets, net | 14,356,000 | 17,408,000 |
Total assets | 17,302,000 | 20,354,000 |
Revenues: | ||
Total revenues | 5,267,000 | 6,156,000 |
Costs of revenues: | ||
Total costs of revenues | 3,124,000 | 3,759,000 |
Gross profit | 2,143,000 | 2,397,000 |
Depreciation & amortization | 172,000 | 195,000 |
Other operating expenses | 1,816,000 | 1,579,000 |
Segment operating income/(loss) | 155,000 | 623,000 |
Other items to reconcile segment operating income (loss) to net income/(loss): | ||
Other income / (expense) | 56,000 | 37,000 |
Income tax expense | (90,000) | (163,000) |
Net income/(loss) | 121,000 | 497,000 |
Service [Member] | ||
Revenues: | ||
Total revenues | 3,806,000 | 3,784,000 |
Costs of revenues: | ||
Total costs of revenues | 2,196,000 | 2,036,000 |
Product [Member] | ||
Revenues: | ||
Total revenues | 971,000 | 1,007,000 |
Costs of revenues: | ||
Total costs of revenues | 568,000 | 537,000 |
License and Service [Member] | ||
Revenues: | ||
Total revenues | 490,000 | 1,365,000 |
Costs of revenues: | ||
Total costs of revenues | 360,000 | 1,186,000 |
Verification and Certification Segment [Member] | ||
Assets: | ||
Goodwill | 1,947,000 | 1,947,000 |
All other assets, net | 7,179,000 | 14,860,000 |
Total assets | 9,126,000 | 16,807,000 |
Revenues: | ||
Total revenues | 4,777,000 | 4,791,000 |
Costs of revenues: | ||
Total costs of revenues | 2,764,000 | 2,573,000 |
Gross profit | 2,013,000 | 2,218,000 |
Depreciation & amortization | 130,000 | 145,000 |
Other operating expenses | 1,746,000 | 1,513,000 |
Segment operating income/(loss) | 137,000 | 560,000 |
Other items to reconcile segment operating income (loss) to net income/(loss): | ||
Other income / (expense) | 57,000 | 49,000 |
Income tax expense | ||
Net income/(loss) | 194,000 | 609,000 |
Verification and Certification Segment [Member] | Service [Member] | ||
Revenues: | ||
Total revenues | 3,806,000 | 3,784,000 |
Costs of revenues: | ||
Total costs of revenues | 2,196,000 | 2,036,000 |
Verification and Certification Segment [Member] | Product [Member] | ||
Revenues: | ||
Total revenues | 971,000 | 1,007,000 |
Costs of revenues: | ||
Total costs of revenues | 568,000 | 537,000 |
Verification and Certification Segment [Member] | License and Service [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Software Sales and Related Consulting Segment [Member] | ||
Assets: | ||
Goodwill | 999,000 | 999,000 |
All other assets, net | 2,609,000 | 3,815,000 |
Total assets | 3,608,000 | 4,814,000 |
Revenues: | ||
Total revenues | 490,000 | 1,365,000 |
Costs of revenues: | ||
Total costs of revenues | 360,000 | 1,186,000 |
Gross profit | 130,000 | 179,000 |
Depreciation & amortization | 42,000 | 50,000 |
Other operating expenses | 70,000 | 66,000 |
Segment operating income/(loss) | 18,000 | 63,000 |
Other items to reconcile segment operating income (loss) to net income/(loss): | ||
Other income / (expense) | (1,000) | (12,000) |
Income tax expense | ||
Net income/(loss) | 17,000 | 51,000 |
Software Sales and Related Consulting Segment [Member] | Service [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Software Sales and Related Consulting Segment [Member] | Product [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Software Sales and Related Consulting Segment [Member] | License and Service [Member] | ||
Revenues: | ||
Total revenues | 490,000 | 1,365,000 |
Costs of revenues: | ||
Total costs of revenues | 360,000 | 1,186,000 |
Eliminations and Other [Member] | ||
Assets: | ||
Goodwill | ||
All other assets, net | 4,568,000 | (1,267,000) |
Total assets | 4,568,000 | (1,267,000) |
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Gross profit | ||
Depreciation & amortization | ||
Other operating expenses | ||
Segment operating income/(loss) | ||
Other items to reconcile segment operating income (loss) to net income/(loss): | ||
Other income / (expense) | ||
Income tax expense | (90,000) | (163,000) |
Net income/(loss) | (90,000) | (163,000) |
Eliminations and Other [Member] | Service [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Eliminations and Other [Member] | Product [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues | ||
Eliminations and Other [Member] | License and Service [Member] | ||
Revenues: | ||
Total revenues | ||
Costs of revenues: | ||
Total costs of revenues |
Schedule of Supplemental Cash_2
Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash paid during the year: | ||
Interest expense | ||
Income taxes | $ 3 |