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Business Acquisitions

6 Months Ended

Jun. 30, 2019

Note 2 – Business Acquisitions

Sow Organic Acquisition

On May 16, 2018, we acquired substantially all of the assets of Sow Organic for $450,000 in cash and 217,654 shares of common stock of WFCF valued at approximately $433,100. We believe the transaction further diversifies our offerings by adding complementary solutions and services available to new and existing customers. Sow Organic’s software as a service (SaaS) model allows organic certification bodies to automate and accelerate new customer onboarding by converting traditional paper-based processes to digital format, resulting in lower costs, improved workflow management and increased productivity. Sow Organic’s unique design allows certification bodies to digitize any certification scheme. Likewise, the software affords producers and handlers a more efficient way to become certified and to digitally manage their records on an ongoing basis, including completing annual certification requirements fully online. We intend to further develop the organic business opportunity and collaborate on a broader rollout of the solution to other certification markets where the tool is equally suited to improve efficiencies and reduce costs in the certification process. This transaction further strengthens our intellectual property portfolio, which we believe represents a distinct competitive advantage for the Company.

We believe the impacts on proforma revenue and earnings are immaterial. The following table summarizes the final fair values assigned to the assets and liabilities acquired in addition to the excess of the purchase price over the net assets acquired at the acquisition date.

Sow Organic, LLC:	May 16, 2018
Software acquired	$	156,000
Identifiable intangible assets:		—
Tradenames and trademarks		48,000
Non-compete agreements		84,000
Customer relationships		162,000
Goodwill		433,131
Total consideration	$	883,131

Excess attributable to goodwill reflects the excess over the identifiable intangible assets acquired based on the final allocation of the purchase price. Goodwill is primarily attributable to the operational and financial benefits expected to be realized from the acquisition, including cost saving synergies from operating efficiencies, future growth in bundling opportunities across divisions and brands, realized savings from a more sophisticated information technology infrastructure, and strategic advances from expansion of our intellectual property.

JVF Consulting Acquisition

On August 30, 2018, we acquired substantially all of the assets of JVF Consulting, LLC (“Seller” or “JVF”) for $500,000 in cash and 158,437 shares of common stock of WFCF valued at approximately $315,300. We believe the transaction adds value to certain of our existing software solutions which are based on intellectual property built and owned by the Seller. JVF is currently the largest technology provider to our SureHarvest division. With this acquisition, WFCF controls the intellectual property associated with its current Software as a Service (SaaS) offerings. Additionally, WFCF employed three of the Seller’s employees who enhance our ability to address new markets and services with our SaaS Solutions.

JVF Consulting, LLC:	August 30, 2018
Software acquired	$	207,000
Identifiable intangible assets:
Tradenames and trademarks		87,000
Non-compete agreements		37,000
Customer relationships		104,000
Goodwill		380,290
Total consideration	$	815,290