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Notes Payable and Lease Obligations
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Notes Payable and Lease Obligations

Note 9 - Notes Payable and Lease Obligations

 

Long Term Debt

 

    December 31,     December 31,  
    2021     2020  
(In thousands)            
Paycheck Protection Program Loan   $ -     $ 1,035  
Less current portion of notes payable and other long-term debt     -       (463 )
Notes payable and other long-term debt   $ -     $ 572  

 

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (“PPP”), the initiative provides federally guaranteed loans to small businesses. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. On April 17, 2020, the Company received a $1.0 million loan under the PPP with a maturity date of April 17, 2022 and an annual interest rate of 1.00%. The Company received notification the loan and accrued interest was forgiven on March 4, 2021.

 

Unison Revolving Line of Credit

 

The Company has a revolving line of credit (“LOC”) agreement which matures on April 12, 2022. 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, 2021 and 2020, the effective interest rate was 4.75%. The LOC is collateralized by all the business assets of WFCFO. As of December 31, 2021 and 2020, 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 15 years, some of which include multiple options to extend the leases for up to 5 years each.

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

 

The components of lease expense were as follows (in thousands):

 

    2021     2020  
    Year Ended December 31,  
    2021     2020  
Operating lease cost   $ 474     $ 464  
Finance lease cost                
Amortization of assets     10       8  
Interest on finance lease obligations     4       5  
Variable lease cost     -       -  
Total net lease cost   $ 488     $ 477  

 

Included in the table above, is approximately $0.4 million and $0.3 million for the year ended December 31, 2021 and 2020, respectively, 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.

 

Rent and lease expense for each of the years ended December 31, 2021 and 2020 was $0.6 million.

 

Supplemental balance sheet information related to leases was as follows (in thousands):

 

                                                 
    December 31, 2021     December 31, 2020  
Operating leases:   Related Party     Other     Total     Related Party     Other     Total  
Operating lease ROU assets   $ 2,568     $ 230     $ 2,798     $ 2,755     $ 238     $ 2,993  
                                                 
Current operating lease liabilities     201       112       313       179       89       268  
Noncurrent operating lease liabilities     2,880       140       3,020       3,079       178       3,257  
Total operating lease liabilities   $ 3,081     $ 252     $ 3,333     $ 3,258     $ 267     $ 3,525  

 

Finance leases:  December 31, 2021   December 31, 2020 
Right of use asset, at cost  $51   $67 
Accumulated amortization   (26)   (30)
Right of use asset, net  $25   $37 
           
Current obligations of finance leases  $13   $13 
Finance leases, net of current obligations   19    31 
Total finance lease liabilities  $32   $44 
           
Weighted average remaining lease term (in years):          
Operating leases   9.1    10.0 
Finance leases   3.1    3.7 
           
Weighted average discount rate:          
Operating leases   5.7%   5.8%
Finance leases   11.5%   13.0%

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

 

Supplemental cash flow and other information related to leases was as follows (in thousands):

 

    2021     2020  
    Year Ended December 31,  
    2021     2020  
Cash paid for amounts included in the measurement of lease liabilities:            
Operating cash flows from operating leases   $ 472     $ 449  
Operating cash flows from finance leases   $ 4     $ 5  
Financing cash flows from finance leases   $ 10     $ 8  
                 
Right of use assets obtained in exchange for lease liabilities:                
Operating leases   $ 3,110     $ 3,531  

 

Maturities of lease liabilities were as follows (in thousands):

 

Years Ending December 31st,   Operating Leases     Finance Leases  
2022   $ 493     $ 15  
2023     480       10  
2024     419       5  
2025     417       6  
2026     430       -  
Thereafter     2,079       -  
Total lease payments     4,318       36  
Less amount representing interest     (985 )     (4 )
Total lease obligations     3,333       32  
Less current portion     (313 )     (13 )
Long-term lease obligations   $ 3,020     $ 19