Bloomia Holdings, Inc 10-Q, filed Aug 14, 2023

Bloomia Holdings, Inc. (TULP)

10-Q 2023-08-14 For: 2023-06-30

Added on April 11, 2026

About this 10-Q

Bloomia Holdings, Inc filed this 10-Q on August 14, 2023, covering the quarter ended June 30, 2023.

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.21M; up 90.9% from $3.25M a year earlier
Net loss: $36K; compared with a net loss of $1.08M a year earlier
Diluted EPS: -$0.02; compared with -$0.61 a year earlier

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Minnesota		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	4

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets – June 30, 2023 (unaudited) and December 31, 2022	4

	Condensed Consolidated Statements of Operations – Three and six months ended June 30, 2023 and 2022 (unaudited)	5

	Condensed Consolidated Statements of Shareholders’ Equity – Three and six months ended June 30, 2023 and 2022 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2023 and 2022 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements – (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Resultsof Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	25

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	26

Item 3.	Defaults upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	27

Lendway, Inc. and Subsidiaries
(formerly Insignia Systems, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,
	2023			December 31,
	(Unaudited)			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	11,419,000		$	14,439,000
Restricted cash		85,000			85,000
Accounts receivable, net		7,583,000			5,557,000
Inventories		28,000			29,000
Income tax receivable		90,000			28,000
Prepaid production costs		143,000			535,000
Other prepaid expense		208,000			80,000
Total Current Assets		19,556,000			20,753,000

Other Assets:
Property and equipment, net		71,000			71,000
Operating lease right-of-use assets		123,000			144,000
Other, net		10,000			—

Total Assets	$	19,760,000		$	20,968,000

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable		1,324,000			2,653,000
Accrued liabilities:
Compensation		912,000			962,000
Sales tax		397,000			717,000
Other		722,000			611,000
Current portion of operating lease liabilities		16,000			4,000
Deferred revenue		1,154,000			2,427,000
Total Current Liabilities		4,525,000			7,374,000

Long-Term Liabilities:
Accrued income taxes		55,000			53,000
Operating lease liabilities		123,000			140,000
Total Long-Term Liabilities		178,000			193,000

Commitments and Contingencies		—			—

Shareholders' Equity:
Common stock, par value $.01:
Authorized shares - 5,714,000
Issued and outstanding shares - 1,798,000 at June 30, 2023 and 1,797,000 at December 31, 2022, respectively		18,000			18,000
Additional paid-in capital		16,502,000			16,458,000
Accumulated deficit		(1,463,000	)		(3,075,000	)
Total Shareholders' Equity		15,057,000			13,401,000

Total Liabilities and Shareholders' Equity	$	19,760,000		$	20,968,000

See accompanying notes to condensed consolidated financial statements.

Lendway, Inc. and Subsidiaries
(formerly Insignia Sytems, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
	2023			2022			2023		2022
Net services revenues	$	6,211,000		$	3,254,000		$	19,042,000	$	9,402,000

Cost of services		4,588,000			2,838,000			14,499,000		7,706,000
Gross Profit		1,623,000			416,000			4,543,000		1,696,000

Operating Expenses:
Selling		361,000			290,000			725,000		632,000
Marketing		300,000			279,000			596,000		538,000
General and administrative		1,129,000			948,000			1,850,000		1,554,000
Total Operating Expenses		1,790,000			1,517,000			3,171,000		2,724,000
Operating (Loss) Income		(167,000	)		(1,101,000	)		1,372,000		(1,028,000	)

Interest income		135,000			31,000			247,000		28,000
(Loss) Income before Taxes		(32,000	)		(1,070,000	)		1,619,000		(1,000,000	)

Income tax expense		4,000			14,000			7,000		22,000
Net (Loss) Income	$	(36,000	)	$	(1,084,000	)	$	1,612,000	$	(1,022,000	)

Net (loss) income per share:
Basic	$	(0.02	)	$	(0.61	)	$	0.90	$	(0.57	)
Diluted	$	(0.02	)	$	(0.61	)	$	0.89	$	(0.57	)

Shares used in calculation of net (loss) income per share:
Basic		1,798,000			1,788,000			1,798,000		1,787,000
Diluted		1,798,000			1,788,000			1,802,000		1,787,000

See accompanying notes to condensed consolidated financial statements.

Lendway, Inc. and Subsidiaries
(formerly Insignia Systems, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2022		1,797,000	$	18,000	$	16,458,000	$	(3,075,000	)	$	13,401,000
Issuance of common stock, net		1,000		—		8,000		—			8,000
Value of stock-based compensation		—		—		22,000		—			22,000
Net income		—		—		—		1,648,000			1,648,000

Balance at March 31, 2023		1,798,000	$	18,000	$	16,488,000	$	(1,427,000	)	$	15,079,000
Value of stock-based compensation		—		—		14,000		—			14,000
Net loss		—		—		—		(36,000	)		(36,000	)
Balance at June 30, 2023		1,798,000	$	18,000	$	16,502,000	$	(1,463,000	)	$	15,057,000

	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2021		1,782,000	$	18,000	$	16,296,000	$	(13,121,000	)	$	3,193,000
Issuance of common stock, net		4,000		—		28,000		—			28,000
Value of stock-based compensation		—		—		30,000		—			30,000
Net income		—		—		—		62,000			62,000

Balance at March 31, 2022		1,786,000	$	18,000	$	16,354,000	$	(13,059,000	)	$	3,313,000
Issuance of common stock, net		1,000		—		11,000		—			11,000
Value of stock-based compensation		—		—		29,000		—			29,000
Issuance of common stock upon vesting of restricted stock units		6,000		—		—		—			—
Net loss		—		—		—		(1,084,000	)		(1,084,000	)
Balance at June 30, 2022		1,793,000	$	18,000	$	16,394,000	$	(14,143,000	)	$	2,269,000

See accompanying notes to condensed consolidated financial statements.

Lendway, Inc. and Subsidiaries
(formerly Insignia Systems, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30	2023			2022
Operating Activities:
Net income (loss)	$	1,612,000		$	(1,022,000	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		26,000			31,000
Changes in allowance for doubtful accounts		11,000			27,000
Stock-based compensation expense		36,000			59,000
Changes in operating assets and liabilities:
Accounts receivable		(2,037,000	)		1,096,000
Inventories		1,000			(6,000	)
Income tax receivable		(62,000	)		(2,000	)
Prepaid expenses and other		254,000			941,000
Accounts payable		(1,336,000	)		(1,208,000	)
Accrued liabilities		(243,000	)		(1,170,000	)
Accrued income taxes		2,000			19,000
Deferred revenue		(1,273,000	)		(240,000	)
Net cash used in operating activities		(3,009,000	)		(1,475,000	)

Investing Activities:
Purchases of property and equipment		(19,000	)		(28,000	)
Net cash used in investing activities		(19,000	)		(28,000	)

Financing Activities:
Proceeds from issuance of common stock, net		8,000			39,000
Net cash provided by financing activities		8,000			39,000

Decrease in cash and cash equivalents and restricted cash		(3,020,000	)		(1,464,000	)

Cash and cash equivalents and restricted cash at beginning of period		14,524,000			3,851,000
Cash and cash equivalents and restricted cash at end of period	$	11,504,000		$	2,387,000

Supplemental disclosures for cash flow information:
Cash paid during the period for income taxes	$	66,000		$	5,000

Non-cash financing activity:
Purchase of property and equipment included in accounts payable	$	7,000		$	-

See accompanying notes to condensed consolidated financial statements.

	Historical		Discontinued Operations Adjustments			Pro Forma Continued Operations
ASSETS
Current Assets:
Cash and cash equivalents	$	11,419,000	$	-		$	11,419,000
Restricted cash		85,000		-			85,000
Accounts receivable, net		7,583,000		-			7,583,000
Inventories		28,000		(28,000	)		-
Income tax receivable		90,000		-			90,000
Prepaid production costs		143,000		(143,000	)		-
Other prepaid expense		208,000		(19,000	)		189,000
Current assets held for sale		-		190,000			190,000
Total Current Assets		19,556,000		-			19,556,000

Other Assets:
Property and equipment, net		71,000		(71,000	)		-
Operating lease right-of-use assets		123,000		(123,000	)		-
Other, net		10,000		-			10,000
Non-current assets held for sale		-		194,000			194,000

Total Assets	$	19,760,000	$	-		$	19,760,000

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable		1,324,000		(72,000	)		1,252,000
Accrued liabilities		2,031,000		-			2,031,000
Current portion of operating lease liabilities		16,000		(16,000	)		-
Deferred revenue		1,154,000		(1,154,000	)		-
Current liabilities held for sale		-		1,242,000			1,242,000
Total Current Liabilities		4,525,000		-			4,525,000

Long-Term Liabilities:
Accrued income taxes		55,000		-			55,000
Operating lease liabilities		123,000		(123,000	)		-
Non-current liabilities held for sale		-		123,000			123,000
Total Long-Term Liabilities		178,000		-			178,000

Commitments and Contingencies		-		-			-

Shareholders' Equity:
Total Shareholders' Equity		15,057,000		-			15,057,000

Total Liabilities and Shareholders' Equity	$	19,760,000	$	-		$	19,760,000

	Historical			Discontinued Operations Adjustments			Pro Forma Continuing Operations
Net services revenues	$	6,211,000		$	(6,211,000	)	$	-

Cost of services		4,588,000			(4,588,000	)		-
Gross Profit		1,623,000			(1,623,000	)		-

Operating Expenses:
Selling		361,000			(361,000	)		-
Marketing		300,000			(300,000	)		-
General and administrative		1,129,000			(572,000	)		557,000
Total Operating Expenses		1,790,000			(1,233,000	)		557,000
Operating Income (Loss)		(167,000	)		(390,000	)		(557,000	)

Interest income		135,000			-			135,000
Income (Loss) from Operations Before Taxes		(32,000	)		(390,000	)		(422,000	)

Income tax expense		4,000			-			4,000

Net Income (Loss) from Continuing Operations							$	(426,000	)

Net (Income) Loss from Discontinued Operations				$	(390,000	)

Net Income (Loss)	$	(36,000	)

Net income (loss) per share, basic and diluted:
Continuing operations							$	(0.24	)
Discontinued operations				$	0.22
Total	$	(0.02	)

Weighted average shares outstanding:
Basic and diluted		1,798,000			1,798,000			1,798,000

	Three months ended June 30				Six months ended June 30
	2023		2022		2023		2022
	Services Revenues		Services Revenues		Services Revenues		Services Revenues
Timing of revenue recognition:
Services transferred over time	$	470,000	$	502,000	$	733,000	$	958,000
Services transferred at a point in time		5,741,000		2,752,000		18,309,000		8,444,000
Total	$	6,211,000	$	3,254,000	$	19,042,000	$	9,402,000

Balance at December 31, 2022	$	2,427,000
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied		(2,066,000	)
Cash received in advance and not recognized as revenue		793,000
Balance at June 30, 2023	$	1,154,000

	Three months ended June 30, 2023						Six months ended June 30, 2023
	Corporate				Operating		Corporate				Operating
	Headquarters		Other		Leases		Headquarters		Other		Leases
Operating lease cost	$	10,000	$	-	$	10,000	$	21,000	$	4,000	$	25,000
Variable lease cost		2,000		-		2,000		6,000		4,000		10,000
Short-term lease cost		-		10,000		10,000		-		10,000		10,000
Total	$	12,000	$	10,000	$	22,000	$	27,000	$	18,000	$	45,000

	Three months ended June 30, 2022						Six months ended June 30, 2022
	Corporate				Operating		Corporate				Operating
	Headquarters		Other		Leases		Headquarters		Other		Leases
Operating lease cost	$	16,000	$	5,000	$	21,000	$	33,000	$	9,000	$	42,000
Variable lease cost		10,000		3,000		13,000		20,000		6,000		26,000
Total	$	26,000	$	8,000	$	34,000	$	53,000	$	15,000	$	68,000

2023	$	-
2024		52,000
2025		53,000
2026		55,000
Total lease payments		160,000
Less: Interest		21,000
Present value of lease liabilities	$	139,000

Six months ended June 30,	2023			2022
Federal statutory rate		21.0	%		21.0	%
Stock-based awards		2.2			(0.5	)
State taxes		3.8			3.4
Impact of uncertain tax positions		0.1			(1.9	)
Valuation allowance		(24.2	)		(25.0	)
Other		(2.5	)		0.8

Effective federal income tax rate		0.4	%		(2.2	)%

	·	interest income earned on assets on the balance sheet, including but not limited to Secured Loans, net of related funding costs and interest payments, and
	·	fee income generated from origination and servicing of Secured Loans.

	·	streamlined systems and processes to support the growth of our core business through connecting customers with competitive funding;
	·	establishment of market presence through direct marketing, purchase of existing loan portfolios, and/or third-party origination agreements;
	·	development of long-term customer relationships;
	·	creation of customized niche products and solutions to support identified customer needs and opportunities in the marketplace;
	·	effective capital and funding structures to maximize returns;
	·	development of mutually beneficial funding and origination partner relationships to expand Company loan volumes and margins over time; and
	·	evaluation of strategic acquisition(s) that align with our initiatives.

	·	demand for lending products we offer;
	·	available capital; and
	·	liquidity and cost of funds from third-party funding sources.

	2023 Pro Forma*			2022 Pro Forma
General and administrative	$	557,000		$	432,000
Operating loss from continuing operations		(557,000	)		(432,000	)
Interest income		135,000			31,000
Loss before taxes from continuing operations	$	(422,000	)	$	(401,000	)

	·	allowance for doubtful accounts;
	·	sales taxes;
	·	income taxes; and
	·	stock-based compensation expense.

	·	disruptions in the debt or equity capital markets;
	·	competitive pressures in our Lending Business’s loan;
	·	changes in interest rates that may increase our Lending Business’s funding costs; and
	·	market or customer perception of our Lending Business’s reputation.

	·	inadequate or failed internal processes, systems, cybersecurity program, or infrastructure;
	·	Our Lending Business’s inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure;
	·	failed execution, including based on human error;
	·	inadequate or failed internal controls or processes to detect or prevent fraud or other violations of law or regulations; or
	·	external events, including a disruption involving physical site access, cyber incidents, catastrophic events, natural disasters, terrorist activities, or disease pandemics.

Exhibit Number	Description	Incorporated by Reference to/ Method of Filing

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

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	Form of Support agreement, dated May 24, 2023, by and among TIMIBO LLC and certain holders of shares of common stock of the Company	Exhibit 10.1 to Current Report filed May 25, 2023

10.2†	Letter Agreement with Adam D. May, dated May 24, 2023	Exhibit 10.2 to Current Report filed May 25, 2023

10.3†‡	Letter Agreement with Kristine A. Glancy dated July 13, 2023	Exhibit 10.1 to Current Report filed July 19, 2023

10.4†	Letter Agreement with Zackery A. Weber dated August 4, 2023	Exhibit 10.1 to Current Report filed August 9, 2023

31.1	Certification of Principal Executive and Financial Officer	Filed Electronically

31.2	Certification of Principal Accounting Officer	Filed Electronically

32	Section 1350 Certification	Furnished Electronically

101	The following materials from Lendway, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in inline XBRL (extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Shareholders’ Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.	Filed Electronically

104	Cover Page Interactive Data File (embedded within the inline XBRL Document)	Filed Electronically

	LENDWAY, INC.
	(Registrant)

Dated: August 14, 2023	/s/ Randy D. Uglem
	Randy D. Uglem
	President and Chief Executive Officer
	(on behalf of registrant)

Dated: August 14, 2023	/s/ Zackery A. Weber
	Zackery A. Weber
	Vice President of Finance
	(principal financial and accounting officer)

1.	I have reviewed this quarterly report on Form 10-Q of Lendway, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within the registrant, particularly during the period in which this report is being prepared; and

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date: August 14, 2023		/s/ Randy D. Uglem
		Randy D. Uglem
		President and Chief Executive Officer (principal executive officer)

(1)	The accompanying Quarterly Report on Form 10-Q for the period ended June 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the accompanying Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.