TULP 10-Q

Bloomia Holdings, Inc. (TULP)

10-Q 2024-05-21 For: 2024-03-31

View Original

Added on April 11, 2026

Delaware		41-1656308
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.01 par value		LDWY		The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets – March 31, 2024 (unaudited) and December 31, 2023	3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) – Three months ended March 31, 2024 and 2023 (unaudited)	4

	Condensed Consolidated Statements of Stockholders’ Equity – Three months ended March 31, 2024 and 2023 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2024 and 2023 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements – (unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31

Item 4.	Controls and Procedures	31

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

	March 31, 2024
	2024			December 31,
	(Unaudited)			2023
Assets
Current assets:
Cash and cash equivalents	$	5,013,000		$	16,077,000
Accounts receivable, net		5,065,000			-
Receivable from escrow account		200,000			200,000
Inventories, net		9,718,000			-
Prepaid expenses and other current assets		2,987,000			52,000
Other current assets related to discontinued operations		115,000			292,000
Total current assets		23,098,000			16,621,000
Property and equipment, net		11,576,000			35,000
Equity-method investment		167,000			-
Goodwill		10,122,000			-
Intangible assets, net		26,712,000			-
Operating lease right-of-use assets		34,060,000			7,000
Finance lease right-of-use assets		22,000			-
Long-term receivable		357,000			-
Note receivable		700,000			-
Other assets		10,000			10,000
Total assets	$	106,824,000		$	16,673,000

Liabilities and Stockholders' equity
Current liabilities:
Accounts payable	$	2,359,000		$	32,000
Accrued compensation		1,825,000			635,000
Accrued expenses and other current liabilities		3,779,000			210,000
Current portion of finance lease liabilities		13,000			-
Current portion of operating lease liabilities		958,000			4,000
Current portion of debt		2,850,000			-
Current liabilities related to discontinued operations		166,000			257,000
Total current liabilities		11,950,000			1,138,000

Long-term liabilities:
Finance lease liabilities, net of current portion		7,000			-
Operating lease liabilities, net of current portion		33,245,000			3,000
Long-term debt, net		34,575,000			-
Deferred tax liabilities, net		9,785,000			-
Total Long-term liabilities		77,612,000			3,000

Commitments and contingencies (Note 12)

Stockholders' equity
Common stock, par value $.01:
Authorized shares - 5,714,000
Issued and outstanding shares - 1,743,000 at March 31, 2024 and December 31, 2023		17,000			17,000
Additional paid-in capital		16,177,000			16,176,000
Accumulated other comprehensive income		3,000			-
Accumulated deficit		(1,702,000	)		(661,000	)
Total stockholders' equity attributable to Lendway, Inc		14,495,000			15,532,000
Equity from noncontrolling interest		2,767,000			-
Total Stockholders' equity		17,262,000			15,532,000
Total Liabilities and Stockholders' equity	$	106,824,000		$	16,673,000

	Three Months Ended
	March 31, 2024			March 31, 2023
Revenue, net	$	8,033,000		$	-
Cost of goods sold		6,139,000			-
Gross profit		1,894,000			-
Sales, general and administrative expenses		3,388,000			628,000
Operating loss		(1,494,000	)		(628,000	)
Foreign exchange difference, net		(45,000	)		-
Interest expense (income), net		225,000			(103,000	)
Other expenses, net		9,000			-
Loss from continuing operations before income taxes		(1,683,000	)		(525,000	)
Income tax (benefit) expense		(347,000	)		3,000
Net loss from continuing operations		(1,336,000	)		(528,000	)
Income from discontinued operations, net of tax		72,000			2,176,000
Net (loss) income including noncontrolling interest		(1,264,000	)		1,648,000
Less: Net (loss) income attributable to noncontrolling interest		(223,000	)		-
Net (loss) income attributable to Lendway, Inc.		(1,041,000	)		1,648,000
Other comprehensive income (foreign currency translation)		3,000			-
Comprehensive (loss) income attributable to Lendway, Inc.	$	(1,038,000	)	$	1,648,000

Net (loss) income per basic and diluted share attributable to Lendway, Inc.:
Continuing operations	$	(0.77	)	$	(0.29	)
Discontinued operations		0.04			1.21
Basic and diluted earnings per share	$	(0.73	)	$	0.92

Shares used in calculation of net (loss) income per share:
Basic and diluted		1,743,000			1,798,000

							Accumulated					Total
					Additional		Other					Lendway						Total
	Common Stock				Paid-In		Comprehensive		Accumulated			Stockholders'			Noncontrolling			Stockholders'
	Shares		Amount		Capital		Income		Deficit			Equity			Interest			Equity
BALANCE DECEMBER 31, 2023		1,743,000	$	17,000	$	16,176,000	$	-	$	(661,000	)	$	15,532,000		$	-		$	15,532,000
Value of stock-based compensation		-		-		1,000		-		-			1,000			-			1,000
Net loss		-		-		-		-		(1,041,000	)		(1,041,000	)		(223,000	)		(1,264,000	)
Other comprehensive income		-		-		-		3,000		-			3,000			-			3,000
Issuance of noncontrolling interests in acquisition		-		-		-		-		-			-			2,990,000			2,990,000
BALANCE MARCH 31, 2024 (Unaudited)		1,743,000	$	17,000	$	16,177,000	$	3,000	$	(1,702,000	)	$	14,495,000		$	2,767,000		$	17,262,000


BALANCE DECEMBER 31, 2022		1,797,000	$	18,000	$	16,458,000	$	-	$	(3,075,000	)	$	13,401,000		$	-		$	13,401,000
Issuance of common stock, net		1,000		-		8,000		-		-			8,000			-			8,000
Value of stock-based compensation		-		-		22,000		-		-			22,000			-			22,000
Net income		-		-		-		-		1,648,000			1,648,000			-			1,648,000
BALANCE MARCH 31, 2023 (Unaudited)		1,798,000	$	18,000	$	16,488,000	$	-	$	(1,427,000	)	$	15,079,000		$	-		$	15,079,000

	Three Months Ended
	March 31,			March 31,
	2024			2023
Operating Activities
Net (loss) income	$	(1,264,000	)	$	1,648,000
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		300,000			14,000
Amortization of deferred financing costs		12,000			-
Changes in allowance for doubtful accounts		-			20,000
Stock-based compensation expense		1,000			22,000
Noncash operating lease expense		143,000			-
Deferred income tax (benefit) expense		(505,000	)		-
Increase (decrease) in cash resulting from changes in, net of acquisition:
Accounts receivable, net		(1,635,000	)		(3,770,000	)
Inventories		3,322,000			5,000
Income tax receivable		-			2,000
Prepaid expenses and other current assets		(1,037,000	)		(1,084,000	)
Accounts payable		263,000			(440,000	)
Accrued compensation		(645,000	)		-
Accrued expenses and other current liabilities		2,429,000			(137,000	)
Deferred revenue		-			(126,000	)
Net cash provided by (used in) operating activities of continuing operations		1,384,000			(3,846,000	)
Net cash provided by operating activities of discontinued operations		86,000			-
Net cash provided by (used in) operating activities		1,470,000			(3,846,000	)

Investing Activities
Purchases of property and equipment		(230,000	)		(6,000	)
Acquisition of Bloomia, net of cash acquired		(34,178,000	)		-
Receipts from note receivable		36,000			-
Net cash used in investing activities		(34,372,000	)		(6,000	)

Financing Activities
Proceeds from long-term debt		24,000,000			-
Repayments of long-term debt		(1,650,000	)		-
Principal payments on finance lease liabilities		(2,000	)		-
Payment of financing costs		(513,000	)		-
Proceeds from issuances of common stock		-			8,000
Net cash provided by financing activities		21,835,000			8,000

Effect of exchange rate changes		3,000			-
Net decrease in cash and cash equivalents		(11,064,000	)		(3,844,000	)
Cash and cash equivalents, beginning of period		16,077,000			14,524,000
Cash and cash equivalents, end of period	$	5,013,000		$	10,680,000

Supplemental cash flow information
Cash paid for interest	$	46,000		$	-
Noncash purchase consideration - Equity issuance of noncontrolling interest	$	2,990,000		$	-
Noncash purchase consideration - Seller notes	$	15,451,000		$	-

	Estimated Useful life
Machinery and equipment	5-20 years
Leasehold improvements	15 years
Bushes	7-10 years
Vehicles	5 years
Furniture and fixtures	5-7 years

	·	Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

	·	Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

	·	Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

	·	Identify the contract or contracts, with a customer;
	·	Identify the performance obligations in the contract;
	·	Determine the transaction price;
	·	Allocate the transaction price to performance obligations in the contract; and
	·	Recognize revenue when or as the Company satisfies a performance obligation.

Period ended March 31	2024
Supermarket	$	7,472,000
Wholesaler		388,000
Other		173,000
Total	$	8,033,000

Three months ended March 31	2024		2023
Denominator for basic net income (loss) per share - weighted average shares		1,743,000		1,798,000
Effect of dilutive securities:
Stock options, restricted stock and restricted stock units		-		-
Denominator for diluted net income (loss) per share - weighted average shares		1,743,000		1,798,000

Fair value of purchase consideration
Cash consideration	$	34,919,000
Equity in subsidiary issued (noncontrolling interest)		2,990,000
Seller bridge loans		15,451,000
Total fair value of consideration	$	53,360,000

Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents	$	739,000
Accounts receivable		3,430,000
Inventories		13,040,000
Prepaid and other		1,773,000
Property and equipment		11,453,000
Intangible assets		26,870,000
Equity method investment		167,000
Finance lease - right of use assets		22,000
Operating lease - right of use assets		34,289,000
Other assets		1,094,000
Total assets acquired		92,877,000

Accounts payable		2,064,000
Accrued expenses		2,974,000
Finance lease liabilities - current		13,000
Operating lease liabilities - current		945,000
Finance lease liabilities - long-term		9,000
Operating lease liabilities - long-term		33,344,000
Deferred tax liabilities		10,290,000
Total liabilities assumed		49,639,000
Net identifiable assets acquired		43,238,000
Goodwill		10,122,000
Total consideration transferred	$	53,360,000

Three Months Ended March 31	2023
Net services revenues	$	12,831,000

Cost of services		9,911,000
Gross Profit		2,920,000

Operating Expenses:
Selling		364,000
Marketing		296,000
General and administrative		93,000
Total Operating Expenses		753,000

Operating Income		2,167,000

Other income		9,000
Income from discontinued operations before income taxes		2,176,000
Income tax benefit		-
Income from discontinued operations, net of tax	$	2,176,000

Finished goods	$	412,000
Work-in-process		3,302,000
Raw materials and packaging supplies		6,004,000
Total inventories	$	9,718,000

Machinery and equipment	$	11,069,000
Leasehold improvements		104,000
Bushes		431,000
Vehicles		353,000
Furniture and fixtures		212,000
Property and equipment, gross		12,169,000
Less: accumulated depreciation		(593,000	)
Property and equipment, net	$	11,576,000

Balance as of January 1, 2024	$	-
Goodwill resulting from the Bloomia Acquisition		10,122,000
Balance as of March 31, 2024	$	10,122,000

	Cross Carrying Amount		Useful Life (Years)		Accumulated Amortization		Net Carrying Amount
Tradename	$	8,570,000	Indefinite		$	-	$	8,570,000
Customer relationships		18,300,000		12		158,000		18,142,000
	$	26,870,000			$	158,000	$	26,712,000

Remainder of 2024	$	1,144,000
2025		1,525,000
2026		1,525,000
2027		1,525,000
2028		1,525,000
Thereafter		10,898,000
Total	$	18,142,000

Credit Agreement - term loan	$	18,000,000
Credit Agreement - revolving credit facility		6,000,000
Notes payable		13,800,000
		37,800,000

Less: unamortized debt issuance costs		(375,000	)

Total debt		37,425,000

Less current maturities		(2,850,000	)

Long term debt, net of current maturities	$	34,575,000

Remainder of 2024	$	2,400,000
2025		1,800,000
2026		1,800,000
2027		1,800,000
2028		1,800,000
2029		28,200,000
	$	37,800,000

	March 31,
	2024
Operating lease:
Operating lease right-of-use assets, net	$	34,060,000

Current portion of operating lease obligations		958,000
Operating lease obligations, net of current portion		33,245,000
Total operating lease liabilities	$	34,203,000

Finance lease:
Finance lease right-of-use assets, net	$	22,000

Current portion of finance lease obligations		13,000
Finance lease obligations, net of current portion		7,000
Total finance lease liabilities	$	20,000

	Three Months Ended March 31,
	2024		2023
Operating lease expense:
Operating lease cost	$	449,000	$	1,000
Short-term and variable lease cost		86,000		-
Finance lease expense:
Amortization of leased assets		1,000		-
Total lease expense	$	536,000	$	1,000

	March 31,
	2024
Weighted average remaining lease term (years)
Finance leases		1.61
Operating leases		14.60
Weighted average discount rate applied
Finance leases		3.95	%
Operating leases		8.22	%

	Operating			Finance
	Leases			Leases
Remainder of 2024	$	922,000		$	4,000
2025		3,723,000			14,000
2026		3,796,000			5,000
2027		3,872,000			-
2028		3,876,000			-
2029		3,798,000			-
Thereafter		39,994,000			-
Total minimum lease payments	$	59,981,000		$	23,000
Less: imputed interest		(25,778,000	)		(3,000	)
Total: present value of lease liabilities	$	34,203,000		$	20,000
Less: current portion		(958,000	)		(13,000	)
Long-term portion of lease liabilities	$	33,245,000		$	7,000

Three months ended March 31, 2024	Bloomia		Lending			Corporate			Total
Revenue, net	$	8,033,000	$	-		$	-		$	8,033,000
Income (loss) from continuing operations before income taxes		1,091,000		(325,000	)		(2,449,000	)		(1,683,000	)
Total assets	$	102,981,000	$	2,049,000		$	1,794,000		$	106,824,000

For the Three Months Ended March 31	2024
Revenue, net		100.0	%
Cost of goods sold		76.4
Gross profit		23.6
Sales, general and administrative		42.2
Operating (loss) income		(18.6	)
Other income and foreign exchange difference		(2.4	)
Loss from continuing operations, before tax		(21.0	)
Income tax benefit (expense)		4.3
Income from discontinued operations, net of tax		0.9
Net (loss) income		(15.8	)%

Three months ended March 31,	2024			2023
Net loss from continuing operations	$	(1,336,000	)	$	(528,000	)
Interest (income) expense, net		225,000			(103,000	)
Provision for income taxes		(347,000	)		3,000
Depreciation and amortization		300,000			14,000
EBITDA		(1,158,000	)		(614,000	)
Acquistion-related costs		1,542,000			-
Non-operating (income) loss ⁽¹⁾		1,361,000			-
Adjusted EBITDA	$	1,745,000		$	(614,000	)

Exhibit Number	Description	Incorporated by Reference To

2.1*	Asset Purchase Agreement dated May 24, 2023	Exhibit 2.1 to Current Report filed May 25, 2023

2.2*	Agreement for the Sale and Purchase of Shares, dated February 21, 2024, by and among Tulp 24.1, LLC, Tulipa Acquisitie Holding B.V., Botman Bloembollen B.V., W.F. Jansen, H.J. Strengers and the Company	Exhibit 2.1 to Current Report filed February 26, 2024

3.1	Certificate of Incorporation	Exhibit 3.1 to Current Report filed August 9, 2023

3.2	Bylaws	Exhibit 3.2 to Current Report filed August 9, 2023

10.1**	Employment Agreement with Werner Jansen

10.2**	Bonus Plan Agreement with Werner Jensen

10.3	Bridge Loan Agreement, dated February 22, 2024, by and between Botman Bloembollen B.V., W.F. Jansen, H.J. Strengers, Tulp 24.1, LLC, Tulipa Acquisitie Holding B.V. and the Company	Exhibit 10.1 to Form 8-K filed February 26, 2024

10.4	Bridge Loan Agreement, dated February 22, 2024, by and between Botman Bloembollen B.V. and Tulipa Acquisitie Holding B.V.	Exhibit 10.2 to Form 8-K filed February 26, 2024

10.5*	Credit Agreement, dated February 20, 2024, by and among the Company, TULP 24.1, LLC, Tulipa Acquisitie Holding B.V., Bloomia B.V., Fresh Tulips USA, LLC, and Associated Bank, N.A., a national banking association	Exhibit 10.3 to Form 8-K filed February 26, 2024

10.6	Amended and Restated Limited Liability Company Agreement, dated February 22, 2024, by and among the Company, Tulp 24.1, LLC and Werner F. Jansen	Exhibit 10.4 to Form 8-K filed February 26, 2024

10.7	Management Services Agreement, dated February 22, 2024, by and between the Company and Tulp 24.1, LLC	Exhibit 10.5 to Form 8-K filed February 26, 2024

10.8	Lease Agreement, dated July 1, 2021, by and between Horti-Group, LLC and Fresh Tulips USA, LLC dba Bloomia	Exhibit 10.6 to Form 8-K filed February 26, 2024

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002	Filed Electronically

31.2	Certification of Principal Financial and Accounting Officer	Filed Electronically

32	Section 1350 Certifications	Furnished Electronically

101	The following materials from Lendway, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in inline XBRL (extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss); (iii) Condensed Consolidated Statements of Stockholders’ Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements	Filed Electronically

104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the inline XBRL document)	Filed Electronically

	LENDWAY, INC.
	(Registrant)

Dated: May 21, 2024	/s/ Randy D. Uglem
	Randy D. Uglem
	President and Chief Executive Officer
	(on behalf of registrant)

Dated: May 21, 2024	/s/ Zackery A. Weber
	Zackery A. Weber
	Vice President of Finance
	(principal financial and accounting officer)