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Equity Investments

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Note 3 – Equity Investments

For the three and nine months ended September 30, 2023 and 2022, the Company received dividend income from Progressive Beef of $50,000 and $150,000, respectively, representing a distribution of their earnings. The income is reflected within the “Other income/(expense)” section of the Company’s Consolidated Statement of Operations for the three and nine months ended September 30, 2023 and 2022.

On March 29, 2023, the Company made an equity investment of $0.2 million in a private placement of ShellFish Solutions, Inc. dba BlueTrace, Inc. (“BlueTrace”) Series Seed 2 Preferred Stock. The Company accounts for its investment in BlueTrace at cost, in accordance with Accounting Standard Update (“ASU”) 2016-01: Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.

We determine the fair value of our investments on a quarterly basis in accordance with ASC 820, Fair Value Measurement, based on a qualitative assessment (Level 2 inputs). We perform an analysis each quarter to identify whether significant events or changes in circumstances, indicate that it is more likely than not that our investments are permanently impaired. In determining if an impairment has occurred, we consider the following:

	●	investment’s earnings performance, credit rating, asset quality, or business prospects of the investee;
	●	has there been significant adverse changes in the regulatory, economic, or technological environment of the investee;
	●	has there been a significant adverse in the general market condition of either the geographical area or the industry in which the investee operates; and,
	●	has there been a bona fide offer to purchase or sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of our investment.

If the current carrying value of each individual investment significantly exceeds the fair value so determined, a permanent impairment loss has occurred with respect to the individual investment in the amount equal to the difference between the carrying value and the price determined.

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

Impairment losses are recognized within the Other income/(expense) section in the consolidated statements of operations in the period in which the impairment is identified. The impaired investment is written down to the fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same investment held within Other income/(expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the investment sold immediately prior to sale.