Where Food Comes From, Inc. Debt Disclosure
Note 9 - Notes Payable and Lease Obligations
Unison Revolving Line of Credit
The Company has a revolving line of credit (“LOC”) agreement which matures on April 12, 2025. 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, 2024 and 2023, the effective interest rate was 9.5% and 10.0%, respectively. The LOC is collateralized by all the business assets of WFCFO. As of December 31, 2024 and 2023, 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 7 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 December 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating lease cost | $ | 448 | $ | 483 | ||||
| Finance lease cost | ||||||||
| Amortization of assets | 15 | 15 | ||||||
| Interest on finance lease obligations | 4 | 5 | ||||||
| Variable lease cost | ||||||||
| Total net lease cost | $ | 467 | $ | 503 | ||||
Included in the table above, is approximately $0.4 million for the years ended December 31, 2024 and 2023, 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.
Where Food Comes From, Inc.
Notes to the Consolidated Financial Statements
Rent and lease expense for each of the years ended December 31, 2024 and 2023 was approximately $0.6 million and $0.7 million, respectively.
Supplemental balance sheet information related to leases was as follows (in thousands):
| December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||
| Operating leases: | Related Party | Other | Total | Related Party | Other | Total | ||||||||||||||||||
| $ | 1,934 | $ | 97 | $ | 2,031 | $ | 2,158 | $ | 87 | $ | 2,245 | |||||||||||||
| Current operating lease liabilities | 276 | 61 | 337 | 249 | 49 | 298 | ||||||||||||||||||
| Noncurrent operating lease liabilities | 2,131 | 38 | 2,169 | 2,407 | 40 | 2,447 | ||||||||||||||||||
| Total operating lease liabilities | $ | 2,407 | $ | 99 | $ | 2,506 | $ | 2,656 | $ | 89 | $ | 2,745 | ||||||||||||
| Finance leases: | December 31, 2024 | December 31, 2023 | ||||||
| Right of use asset, at cost | $ | 76 | $ | 76 | ||||
| Accumulated amortization | (40 | ) | (25 | ) | ||||
| Right of use asset, net | $ | 36 | $ | 51 | ||||
| Current obligations of finance leases | $ | 15 | $ | 14 | ||||
| Finance leases, net of current obligations | 25 | 41 | ||||||
| Total finance lease liabilities | $ | 40 | $ | 55 | ||||
| Weighted average remaining lease term (in years): | ||||||||
| Operating leases | 6.4 | 7.4 | ||||||
| Finance leases | 2.8 | 3.7 | ||||||
| Weighted average discount rate: | ||||||||
| Operating leases | 5.8 | % | 5.8 | % | ||||
| Finance leases | 8.5 | % | 8.3 | % | ||||
Supplemental cash flow and other information related to leases was as follows (in thousands):
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | 472 | $ | 507 | ||||
| Operating cash flows from finance leases | $ | 4 | $ | 3 | ||||
| Financing cash flows from finance leases | $ | 14 | $ | 12 | ||||
| Right of use assets obtained in exchange for lease liabilities: | ||||||||
| Operating leases | $ | 80 | $ | |||||
Where Food Comes From, Inc.
Notes to the Consolidated Financial Statements
Maturities of lease liabilities were as follows (in thousands):
| Years Ending December 31st, | Operating Leases | Finance Leases | ||||||
| 2025 | 471 | 18 | ||||||
| 2026 | 456 | 14 | ||||||
| 2027 | 430 | 13 | ||||||
| 2028 | 443 | |||||||
| 2029 | 456 | |||||||
| Thereafter | 750 | |||||||
| Total lease payments | 3,006 | 45 | ||||||
| Less amount representing interest | (500 | ) | (5 | ) | ||||
| Total lease obligations | 2,506 | 40 | ||||||
| Less current portion | (337 | ) | (15 | ) | ||||
| Long-term lease obligations | $ | 2,169 | $ | 25 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 20, 2025 | Showing above |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 23, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.