Where Food es From(US:WFCF)2026-02-26 18:18Revenue Performance - Total revenues for the year ended December 31, 2025, were approximately $24.9 million, a decrease of about $0.9 million or 3.5% compared to $25.7 million in 2024[117] - Verification and certification service revenue decreased by approximately $0.5 million or 2.2% in 2025 compared to 2024, with total verification revenues declining about 6.5% in Q4 2025 compared to Q4 2024[119] - Product sales for the year ended December 31, 2025, decreased by approximately $0.2 million or 4.9% compared to 2024, attributed to a decline in beef cow inventories from 28.9 million head to less than 28 million head[120] - Professional services revenue decreased by approximately $0.2 million in 2025 compared to 2024, reflecting a decline in project-based consulting revenue[121] Profitability - Gross profit margin for the year ended December 31, 2025, decreased to 38.8% from 41.9% in 2024, primarily due to inflationary cost increases and a decline in revenue[122] - Net income for the year ended December 31, 2025, was approximately $1.5 million or $0.30 per share, compared to $2.1 million or $0.40 per share in 2024[129] Cash Flow and Financial Position - Cash and cash equivalents at December 31, 2025, were approximately $3.2 million, an increase from $2.0 million at December 31, 2024[130] - Net cash provided by operating activities during 2025 was approximately $1.6 million, a decrease from $2.7 million in 2024, primarily due to rising costs[131] - Net cash provided by investing activities during 2025 was approximately $1.7 million, primarily due to the sale of the Company's equity investment in Progressive Beef[132] Taxation - The effective tax rate for the year ended December 31, 2025, was 31.1%, compared to 28.8% in 2024[128] - The company’s effective income tax rate is influenced by changes in tax law and earnings levels, with no unrecognized tax liability as of December 31, 2025[155] Strategic Initiatives - The company plans for continued growth through diversification in product offerings and potential acquisitions, capitalizing on growing consumer awareness and demand[137] - The company implemented internal restructuring effective January 2025, consolidating to one business unit to improve efficiency and brand unity[161] Assets and Valuation - As of December 31, 2025, the company had approximately $2.9 million of goodwill, with a qualitative assessment indicating fair value exceeded carrying value[162] - The company reported deferred revenue of approximately $1.5 million and $1.7 million at December 31, 2025 and 2024, respectively, primarily related to annual certification periods for audits[145] - Significant portions of verification and certification service revenue are typically realized during late May through early October, impacting profit margins[148] - Digital assets are included in non-current assets and are measured at fair value under ASU 2023-08, with changes recognized in net income[173] - The company has no off-balance sheet arrangements as of December 31, 2025[139] Valuation Methods - The company employs various recognized valuation methods, including present value modeling and referenced market values, to determine fair values of acquired assets and assumed liabilities in business combinations[175] - Valuations are performed by management or independent valuation specialists under management's supervision, ensuring reasonable assumptions are used[175] - The assumptions made in valuation techniques, such as discount rates and timing of future cash flows, are inherently uncertain, which may lead to actual results differing from estimates[175] Stock-Based Compensation - The company recognizes stock-based compensation expense based on fair value, which is subject to significant estimates and assumptions[149]