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WhereFoodComesFrom,Inc.
WhereFoodComesFrom,Inc.
D.B.A.IMIGlobal,Inc.
Headquarters:CastleRock,Colorado
OTCQB:WFCF
May2017
Forward-LookingStatementsandUseofNon-GAAPMeasures
Thispresentationcontains"forward-lookingstatements"withinthemeaningoftheU.S.PrivateSecuritiesLitigationReformActof1995,basedoncurrentexpectations,estimatesandprojectionsthataresubjecttorisk.Forward-lookingstatementsareinherentlyuncertain,andactualeventscoulddiffermateriallyfromtheCompany’spredictions.ImportantfactorsthatcouldcauseactualeventstovaryfrompredictionsincludethosediscussedinourSECfilings.Specifically,statementsinthispresentationaboutfinancialperformance,newbusinessdevelopment,growthpotential,marketleadership,andtheimpactandpotentialoftheCompany’sproductsandservicesonthemarketplaceandcustomersareforward-lookingstatementsthataresubjecttoavarietyoffactors,includingavailabilityofcapital,personnelandotherresources;competition,governmentalregulationofthebeefindustry,themarketforbeefandotherfactors.Readersshouldnotplaceunduerelianceontheseforward-lookingstatements.TheCompanyassumesnoobligationtoupdateitsforward-lookingstatementstoreflectnewinformationordevelopments.ForamoreextensivediscussionoftheCompany’sbusiness,pleaserefertotheCompany’sSECfilingsatwww.sec.gov.Noteonnon-GAAPFinancialMeasuresThis presentation also includes a discussion of adjusted EBITDA, which is a non-GAAP financial measureprovided as a complement to the results provided in accordance with generally accepted accounting principles("GAAP"). Adjusted EBITDA excludes stock-based compensation and, when appropriate, other items thatmanagement does not utilize in assessing the Company's operating performance. None of these non-GAAPfinancial measures are recognized terms under GAAP and do not purport to be an alternative to net income asan indicator of operating performance or any other GAAP measure. We intend to continue to provide thesenon-GAAP financial measures as part of our future earnings discussions because we believe they are useful toinvestors and other external users of our financial statements in evaluating our operating performance.
HowBigistheTrend?
“I’veneverseenastrongerdesirefor(consumers)knowingwheretheirfoodiscomingfrom…” -- WholeFoodsCEOWalterRobb
“Ourcustomerswanttoknowmoreabouthowtheirfoodisgrownandraised,andwhereitcomesfrom. Walmart iscommittedtousingourstrengthstodrivetransparencyandimprovementacrossthesupplychain….helpingtoputourcustomersinchargeoftheirfoodchoicesbyprovidingclear,accurateinformationaboutfoodingredients.-- KathleenMcLaughlin,Walmart VP,Sustainability
“Wearechangingthewaywesourceandservefoodinourrestaurants.WehaveanimportantroleinhelpingbuildamoresustainablefoodsystemgloballythroughinitiativessuchasthesustainablebeefpilotinCanadaandwe’recommittedtocontinuingthisimportantworkaroundtheworld.”-- SteveEasterbrook,presidentandCEO,McDonald’sCorporation
“Thebeefindustryrecognizesthatconsumersaremoreinterestedinwheretheirfoodcomesfromandtheywanttotellthestory.”-- DerekSchoonbaert,managingdirector,CargillCanada
CompanyOverview• #1providerofindependent,third-partytraceabilityand
verificationoffoodproductionpractices• Collectandleverageinformationonwhen,where,how
andbywhomfoodwasraised• 12,000+customers:farmers,ranchers,vineyards,
wineries,processors,retailers,distributors,tradeassociationsandrestaurants
• Customersincludetoptierplayersinfoodandwinespace• Recurringrevenuemodelgeneratingstrongcashflowsto
supportprofitableorganicgrowthandfundM&A• Addressablemarket$200M*andgrowing<5%ofrevenue
*Estimate based on available industry data
VerificationServices
CommodityGroupCoverage StandardsWeaudittomorethan30standards,includingOrganic,Non-GMO,GlutenFree,SafeQualityFood,ProtectedHarvest,AmericanHumaneCertified™,Sustainability,andmanyothers
Beef DairyPork WinegrapesPoultry NutsLamb MushroomsBison AvocadosEggs Cutflowers
CompetitiveAdvantage:BundledServices
DifferentialcompetitiveadvantageofbundledservicesmadepossiblebyM&Aactivity&largestportfolioofauditingstandards
• 30%ofnewcustomerwinsduetobenefitsofbundledservices
• Multipleauditsconductedinsinglevisit• Eliminatesauditfatigueandsimplifiesprocess• Lowerscoststoproducersandprocessers• ImprovesWFCFgrossmargins
• Organic/non-GMOismostpopularbundledaudit
TheWFCFBundlingAdvantage
NSF
Food Chain
CCOF
QAI
Oregon TilthEarth Claims
MLA
WFCF
WhereFoodComesFromSourceVerified®
Howitworks:PackagedisplaysWhereFoodComesFromSourceVerified®labelindicatingproduct’soriginhasbeenverifiedbyanindependentthirdparty.MayincludeaQRcodeforconsumertoaccessinformationonpracticesusedbythefamiliesthatraisedthefood.
RevenueModel:• Non-exclusivefooddistributorsorretailerspay
perpoundroyalties,licensefees,servicefees.• Exclusiveverificationcustomersdisplaylabelfor
noadditionalcost.
300+ grocery stores and food distributors nationally carry product displaying aWhere Food Comes From Source Verified® label.
OurCustomers
CustomerCaseStudy
Customersince2014
McDonald’shastakenaleadershiproleintheareaofsustainablepracticesforbeefproducers
• In2015and2016WFCFdesignedandimplementedtheMcDonald’spilotprogramforsustainablebeefinCanada
• WFCFwastheexclusiveprovideronthisprogram• Conducted183on-siteauditsofCanadianbeefsupplierswhoarenow
compliantwithMcDonald’ssustainabilityrequirements• Tracked9,000headofcattle=2.4millionhamburgers• CanadianRoundtableforSustainableBeefevaluatingresultstodetermine
pathforward
CustomerCaseStudy
Customersince2008WholeFoodsMarket(WFM)isaleadingadvocateforfoodtransparency• WFMrequiresitsproteinsupplierstocomplywithGlobalAnimalPartnership
(GAP)standardsaroundhumanehandling• WFCFisthelargestandoneofonlytwocertifiedprovidersofGAPaudits
nationwideforWFMsuppliersofbeef,chicken,porkandlamb• PineManorFarms®chickenproductsnowbearWFCFlabelonpackaging• WFCFnowbundlingnon-GMOandOrganiccertificationsforWFMsupply
chain• Stickycustomerrelationship
CustomerCaseStudy
Customersince2005Tysonisworld’slargestmeatpackerwith$41Binrevenue
• Industryleaderinphilanthropy,foodsafety,animalwelfare,sustainability
• Long-termcustomerrelationshipisconstantlyexpanding• VerificationsforTyson’sNaturalandOrganicbeef,pork,
poultry• NHTCsourceandageverificationsforEurope• TysonFarmCheck™isWFCFexclusive
WhyWFCFintheFuture?MarketDrivers
Growthstrategysupportedbylong-termtrends• Consumerdemandfortransparencyduetofoodsafetyissues• Increasingconsumerinterestinknowingwheretheirfoodcomesfromand
whoraisedit• Producers,packers,distributorsandretailersviewverification,
identificationandtraceabilityaskeycompetitivedifferentiators• FoodscandalsdriveQSRandretailersforward• Newtechnologies:RFID,GPS,drones• USDA’sAnimalDiseaseTraceability(ADT):MandatoryIDin5-10years• Keyexportmarketsrequireverification:EU,SaudiArabia,China
(anticipated)
WhereDidNon-GMOComeFrom?TheNon-GMOOpportunity
GMO– GeneticallyModifiedOrganisms• Non-GMOProjectislargestindustrygroup• Majority(32)ofUSstateshaveGMOballotinitiatives• Vermontfirststatetomandatenon-GMOlabelingin2016• WholeFoodscommittedtomandatoryGMOlabelingby2018• WhereFoodComesFromisoneofonlyfournon-GMO
approvedauditorsnationally
M&AActivity
Acquisition Year CommodityGroups Certifications
ICS 2012 Grain,dairy,beef, pork,tobacco
Organic,Glutenfree,Non-GMO
Validus 2013 Pork, poultry,dairy Animalwelfare,sustainability
MicroTechnologies 2013 Beef Source &Age,NHTC
Merck(Tri-Merit) 2014 Beef,dairy Source&Age
SterlingSolutions 2014 Beef,dairy Source&Age,NHTC,BQA
SureHarvest 2016 Highvaluespecialtycrops–winegrapes,almonds,hazelnuts,cutflowers,freshproduce
Sustainability
M&A strategy designed to add new auditing standards, food group coverage and technology to further differentiate the Company from its competition.
SureHarvest AcquisitionDecember2016
TransactionSummary• WFCFacquired60%controllinginterestwithrightoffirst
refusalonremaining40%• Transactionvaluedatapproximately$2.8million,including
$1.1millionincashand850,852sharesofWFCFcommonstock
• SureHarvest expectedtoaddapproximately$1.5millioninannualizedrevenuewithnolong-termdebt
SureHarvest AcquisitionDecember2016
Highlights• ExpandsanddiversifiesWFCF’scommodityreachwithhighvaluespecialty
crops,includingwinegrapes,almonds,hazelnuts,mushrooms,cutflowers,leafygreensandotherfreshproduce
• SureHarvest’s patentedsustainabilitysoftwaresupportsmorethan2,200agri-foodoperations,includinggrowers,packers,shippers,processors,wineriesandtradeassociations
• SaaS businessmodelbundlesannualsoftwaresubscriptionswithprofessionalservicestoprovidepredictable,recurringrevenue
• SureHarvest bringsfiveissuedpatents,eight2016patentallowancesandthreependingapplications
SureHarvest AcquisitionDecember2016
SureHarvest SolutionsOverview
ServicesandProductsSustainableSourcing
SustainabilityProgramsDiffusionofInnovation
CertificationManagementVerificationServices
ComplianceManagementFarmingInformationManagement
FoodChainCustomersGrowersWineries
PackersandShippersDistributors
FoodProcessorsRetailersandFoodservice
TradeAssociations
SustainabilityandfarmingMISsolutions,certificationandcompliancemanagement,andprofessionalservicesdrivesustainablevaluecreationforcustomersthroughoutthefoodandagriculturevaluechain.
FlagshipSustainabilityManagementInformationSystem(SMIS)supportsagri-foodoperationsmanaging450,000acresofspecialtycropscoveringmultiplecommoditiesandmorethan65%ofthewineproducedinCalifornia.
RevenueGrowth
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
$4M
$6M$5.8M
$8.8M
$10.4M
$12M
$1.1M$1.7M
$2.4M$2.7M
$3.3M $4.2M
$2M
Note: To more accurately illustrate results from continuing operations, the financial data presented excludes CattleNetwork and CattleStore operations that were divested in 2008.
$5.3M
$8M
$10M
26% compounded annual growth rate
$11.6M
GrossProfit
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
$2M
$4M
$5.4M
$.7M$1.2M $1.3M $1.3M
$1.8M$2.3M
$1M
$2.8M$3M $2.7M
$3.8M
$4.9M$5M
$6M
NetIncome
$1M
‘06 ‘07
‘08
‘09
‘10 ‘11
‘13
$33,600
$229,100
‘14 ‘15
$533,900
’16
$433,200
$1,533,364
$759,600
$149,700
$153,200
$327,800
$864,500
$0
$1M
$870,400
‘12
SG&Aas%ofRevenue
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
200%
46%
192%
117%
60% 55% 44% 40%
150%
100%
50% 45% 39% 39%
Scalable business model
41%
AdjustedEBITDA
$1M
‘06 ‘07 ‘08
‘09 ‘10 ‘11 ‘13
$433,100
$870,100
‘14 ‘15
$1,207,600
’16
$1,365,200
$1,116,700
$612,900
$66,300
$140,000
$443,000
$757,700
$0
$1M
$705,900
‘12
Year-to-DateFinancialHighlights
IncomeStatement• 3-monthrevenueup26%yearoveryear• 3-monthnetincomeup32%yearoveryear• 3-monthadjustedEBITDAup61%yearoveryearBalancesheet• Workingcapital:$3,615,400• Cash:$3,980,900• Longtermdebt:- 0-• Stockholders’equity:$9,571,100
SelectedStockData• Traded– OTCQB:WFCF• 52weekstockpricerange– $1.83- $2.63• Averagedailytradingvolume– 9,481• Commonsharesoutstanding– 24,647,437• Approx.management/boardownership– 14,800,000• MarketCap– $52,000,000• Fiscalyear– December31
Note: Certain figures are rounded. Valuation and other data is subject to change on a daily basis and is presented as a general reference as of May 2017.
WhyInvestinWFCF?InvestmentCase
① WFCFisonlypublicplayerinfoodverificationandtraceability② Consumerdemandfor,andgovernmentinterestin,
transparencyinthefoodchainatanall-timehigh③ Companyexecutingonstrategytobeone-stop-shopforall
certificationstandardsinallfoodgroups④ Highprofilecustomers’relianceonWFCFatestamentto
uniquenessandstrengthofourserviceofferings⑤ Scalablerecurringrevenuemodelwithlarge,growingcustomer
basepositionsWFCFforlong-termprofitablegrowth⑥ Wellcapitalized,tightsharestructure,strongmanagementteam
andboardthatownssignificantstakeinCompany
WhereFoodComesFrom
For more information, contact:
Pfeiffer High Investor Relations, Inc.Jay Pfeiffer
303-880-9000 or [email protected]