Where Food es From(WFCF)2025-02-20 19:13Revenue and Income - Verification and certification service revenue for the year ended December 31, 2024 increased approximately 0.2 million, or 5.0%, compared to 2023, attributed to a decline in beef cow herd size[128] - Total revenues for the year ended December 31, 2024 were 25.135 million in 2023[124] - Net income for the year ended December 31, 2024, was approximately 0.40 per share, a slight decrease from 0.39 per share in 2023[137] - Dividend income from Progressive Beef, LLC for the year ended December 31, 2024 was 320,000 in 2023[134] Costs and Expenses - Costs of revenues for the verification and certification segment for the year ended December 31, 2024 were approximately 13.3 million in 2023[129] - Gross margin for the verification and certification segment for the year ended December 31, 2024 decreased to 41.9% compared to 43.4% in 2023[129] - Selling, general and administrative expenses for the verification and certification segment for the year ended December 31, 2024 increased approximately 0.3 million compared to 2023[131] - Gross margin for the professional services segment improved to 26.5% from 21.3% in 2023[132] Cash Flow and Working Capital - Cash and cash equivalents as of December 31, 2024, were approximately 2.6 million in 2023; working capital decreased from approximately 2.4 million[138] - Net cash provided by operating activities in 2024 was approximately 2.8 million in 2023, primarily due to a decline in gross margins in the Verification and Certification Segment[139] - Net cash used in investing activities during 2024 was approximately 0.6 million in 2023, with 3.2 million in 2024, down from 1.7 million, up from 75,080 in working capital, with an effective interest rate of 9.0% as of December 31, 2024[147] Industry and Market Conditions - The company is currently in a contraction phase of the cattle industry cycle, which began in 2014, with significant impacts expected from drought and pasture conditions[157] - The company plans to focus on diversification in product offerings and potential acquisitions to capitalize on growing consumer demand[146] Goodwill and Intangible Assets - As of December 31, 2024, the company had approximately $2.9 million of goodwill, with no impairment losses recognized during the year[171] - The company acquired trademarks/tradenames in the Validus acquisition, which were determined to no longer have an indefinite life and will now be amortized over their remaining useful life[181] - The excess of the purchase price over the fair value of net assets acquired in business combinations is recorded as goodwill[186] Accounting Policies and Valuation - The company implemented ASU 2023-08 effective January 1, 2024, requiring digital assets to be measured at fair value with changes recognized in net income each reporting period[184] - Digital assets were previously held as indefinite-lived intangible assets and were recorded at cost, net of impairment losses, as of December 31, 2023[185] - Business combinations are part of the company's growth strategy, with the purchase price allocated to tangible and intangible assets based on estimated fair values at the date of purchase[186] - The company uses various recognized valuation methods, including present value modeling, to determine the fair values of assets acquired and liabilities assumed in business combinations[187] - ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term[177] - The company has ownership and control over its digital assets, which are included in non-current assets on the balance sheet[182] - Indefinite-lived intangible assets are tested for impairment annually, or more frequently if circumstances indicate potential impairment[180] - The company evaluates the remaining useful life of intangible assets not being amortized each reporting period[179]