TULP 10-Q
Bloomia Holdings, Inc. (TULP)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
______________________________
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from ___________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices; zip code) |
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(Registrant’s telephone number, including area code) |
Securities registered to Section 12(b) of the Act:
Title of each class |
| Trading Symbol |
| Name of each exchange on which registered |
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| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Number of shares outstanding of Common Stock, $.01 par value, as of November 8, 2023 was
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q is being filed by the registrant, Lendway, Inc., a Delaware corporation(the “Company”). Effective August 4, 2023 we changed our name from “Insignia Systems, Inc.” and reincorporated from Minnesota to Delaware. As part of the name change, our common stock now trades under the symbol “LDWY” on The Nasdaq Stock Market LLC.
On August 3, 2023, the Company sold certain assets and certain liabilities relating to the Company’s business of providing in-store advertising solutions to brands, retailers, shopper marketing agencies and brokerages (the “In-Store Marketing Business”) for a sale price of $3.5 million to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”), under an Asset Purchase Agreement dated May 24, 2023 (the “Purchase Agreement”). The Company retained accounts receivable, as well as all cash, cash equivalents and marketable securities, and certain liabilities. The cash consideration for the sale was subject to a post-closing adjustment that depended on the net balance of (i) cash received by the Company for programs that remained unexecuted as of August 3, 2023, minus (ii) the payments made by the Company to vendors for unexecuted programs. The final purchase adjustment for the net balance was to reduce the cash consideration by $1.5 million, with the Company retaining an equal amount of cash that had been received for unexecuted programs.
The operations of the In-Store Marketing Business are presented as a discontinued operations beginning with this Quarterly Report on Form 10-Q for the three months ended September 30, 2023, the quarter in which the sale of the In-Store Marketing Business met the criteria as discontinued operations. All previous periods presented have been restated to present the In-Store Marketing Business as discontinued operations. See Note 2 of the Notes to the Condensed Consolidated Financial Statements appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further description of the impacts of the sale of the In-Store Marketing Business on the condensed consolidated financial statements.
The Company is building a scalable non-bank lending business to purchase existing loans or originate and fund new loans, all of which will be secured by collateral.
Lendway, Inc.
TABLE OF CONTENTS
| 2 |
| Table of Contents |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Lendway, Inc. and Subsidiaries | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
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| September 30, |
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| 2023 |
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| December 31, |
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| 2022 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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Restricted cash |
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Receivable from escrow account |
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Income tax receivable |
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Prepaid expense |
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Other current assets related to discontinued operations |
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Total Current Assets |
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Other Assets: |
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Property and equipment, net |
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Other, net |
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Non-current related to discontinued operations |
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Total Other Assets |
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Total Assets |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable |
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Accrued liabilities: |
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Compensation |
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Other |
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Current liabilities related to discontinued operations |
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Total Current Liabilities |
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Long-Term Liabilities: |
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Accrued income taxes |
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Non-current liabilities related to discontinued operations |
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Total Long-Term Liabilities |
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Commitments and Contingencies |
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Shareholders' Equity: |
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Common stock, par value $ |
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Authorized shares - |
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Issued and outstanding shares - |
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Additional paid-in capital |
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Accumulated deficit |
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Total Shareholders' Equity |
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Total Liabilities and Shareholders' Equity |
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See accompanying notes to condensed consolidated financial statements. | ||||||||
| 3 |
| Table of Contents |
Lendway, Inc. and Subsidiaries | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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| Three Months Ended |
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| Nine Months Ended |
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| September 30 |
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| September 30 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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Operating Expenses: |
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Sales and marketing |
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General and administrative |
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Total Operating Expenses |
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Operating Loss |
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Interest income |
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Loss from continuing operations before income taxes |
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Income tax (benefit) expense |
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Net loss from continuing operations |
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(Loss) Income from discontinued operations, net of tax |
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Gain from sale of discontinued operations, net of tax |
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Net Income |
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Net (loss) income per basic and diluted share: |
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Continuing operations |
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Discontinued operations |
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Basic and diluted earnings per share |
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Shares used in calculation of net (loss) income per share: |
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Basic and diluted |
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See accompanying notes to condensed consolidated financial statements. |
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| 4 |
| Table of Contents |
Lendway, Inc. and Subsidaries | ||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
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| Common Stock |
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| Additional Paid-In |
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| Accumulated |
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| Shares |
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| Capital |
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| Deficit |
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| Total |
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Balance at December 31, 2022 |
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Issuance of common stock, net |
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Value of stock-based compensation |
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Net income |
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Balance at March 31, 2023 |
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Value of stock-based compensation |
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Net loss |
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Balance at June 30, 2023 |
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Repurchase of common stock |
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Issuance of common stock, net |
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Issuance of common stock upon vesting of restricted stock units |
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Value of stock-based compensation |
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Net income |
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Balance at September 30, 2023 |
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| Common Stock |
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| Additional Paid-In |
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| Capital |
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| Deficit |
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| Total |
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Balance at December 31, 2021 |
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Issuance of common stock, net |
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Value of stock-based compensation |
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Net income |
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Balance at March 31, 2022 |
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Issuance of common stock, net |
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Value of stock-based compensation |
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Issuance of common stock upon vesting of restricted stock units |
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Net loss |
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Balance at June 30, 2022 |
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Value of stock-based compensation |
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Issuance of common stock upon vesting of restricted stock units |
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Net income |
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Balance at September 30, 2022 |
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See accompanying notes to condensed consolidated financial statements. |
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| 5 |
| Table of Contents |
Lendway, Inc. and Subsidiaries | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
| Nine Months Ended September 30 |
| 2023 |
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| 2022 |
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| Operating Activities: |
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Net loss |
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Income from discontinued operations, net of tax |
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Gain from sale of discontinued operations, net of tax |
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Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities of continuing operations: |
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Depreciation and amortization |
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Stock-based compensation expense |
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Changes in operating assets and liabilities: |
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Receivable from escrow account |
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Income tax receivable |
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Prepaid expenses and other |
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Accounts payable |
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Accrued liabilities |
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Accrued income taxes |
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Net cash used in operating activities of continuing operations |
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Net cash provided by operating activities of discontinued operations |
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Net cash (used in) provided by operating activities |
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| Investing Activities: |
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Proceeds from sale of business |
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Purchases of property and equipment |
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Net cash provided by investing activities of continuing operations |
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Net cash used in investing activities of discontinued operations |
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Net cash provided by (used in) investing activities |
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| Financing Activities: |
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Proceeds from issuance of common stock, net |
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Repurchase of common stock, net |
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Net cash (used in) provided by financing activities |
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| Increase in cash and cash equivalents and restricted cash |
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| Cash and cash equivalents and restricted cash at beginning of period |
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| Cash and cash equivalents and restricted cash at end of period |
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| Supplemental disclosures for cash flow information: |
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Cash paid during the period for income taxes |
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| Non-cash financing activity: |
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Purchase of property and equipment included in accounts payable |
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Common stock issued for accrued liabilities |
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| See accompanying notes to condensed consolidated financial statements. |
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| 6 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Description of Business and Basis of Presentation.
Description of Business. Lendway, Inc., a Delaware corporation (the “Company), is building a scalable non-bank lending business (the “Lending Business”) to purchase existing loans or originate and fund new loans, all of which will be secured by collateral. On August 4, 2023, the Company changed its name from “Insignia Systems, Inc.” and reincorporated from Minnesota to Delaware. As part of the name change, the Company’s common stock now trades under the symbol “LDWY” on The Nasdaq Stock Market LLC.
As described in Note 2, on August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s legacy business of providing in-store advertising solutions to brands, retailers, shopper marketing agencies and brokerages (the “In-Store Marketing Business”) for a price of $3.5 million, subject to escrows and a post-closing adjustment.
Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. They do not include all information and footnotes required by U.S. GAAP for complete financial statements. However, except as described herein, there has been no material change in the information disclosed in the notes to financial statements included in the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2023 (the Form 10-K). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying condensed balance sheet as of December 31, 2022 has been derived from the audited balance sheet as of December 31, 2022 contained in the Form 10-K.
The operations of the In-Store Marketing Business are presented as discontinued operations beginning with this Quarterly Report on Form 10-Q for the three months ended September 30, 2023, the period in which the sale of the In-Store Marketing Business met the criteria as discontinued operations. All prior periods presented have been restated to present the In-Store Marketing Business as discontinued operations.
The condensed consolidated financial statements include the accounts of the Company, its subsidiary, Farmland Credit, Inc., a Minnesota corporation (“FCI”), and FCI’s subsidiaries, Farmland Credit FR, LLC and Farmland Credit AV, LLC.
2. Sale of In-Store Marketing Business and Presentation as Discontinued Operations.
On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s In-Store Marketing Business for a price of $
| 7 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The gain on sale of the In-Store Marketing Business before income taxes was determined as follows:
Sale price |
| $ |
| |
Carrying value of assets sold, less liablities |
|
| ( | ) |
Transaction costs not previously expensed |
|
| ( | ) |
Gain on sale of In-Store Marketing Business |
| $ |
|
The Company incurred transaction-related severance and other separation benefits in connection with the termination of certain officers and employees of the discontinued operations of approximately $
The results of the In-Store Marketing Business have been presented as discontinued operations and the related assets and liabilities have been classified as related to discontinued operations for all periods presented.
The carrying amounts of major classes of assets and liabilities that were reclassified as related to discontinued operations on the Condensed Consolidated Balance Sheet were as follows:
|
| December 31, |
| |
|
| 2022 |
| |
Current Assets: |
|
|
| |
Accounts receivable |
| $ |
| |
Inventories |
|
|
| |
Prepaid production costs |
|
|
| |
Other prepaid expense |
|
|
| |
Current assets related to discontinued operations |
| $ |
| |
|
|
|
|
|
Other Assets: |
|
|
|
|
Property and equipment, net |
| $ |
| |
Operating lease right-of-use assets |
|
|
| |
Non-current assets related to discontinued operations |
| $ |
| |
|
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
| $ |
| |
Sales tax |
|
|
| |
Accrued liabilities |
|
|
| |
Current portion of operating lease liabilities |
|
|
| |
Deferred revenue |
|
|
| |
Current liabilities related to discontinued operations |
| $ |
| |
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
|
Operating lease liabilities |
| $ |
| |
Non-current liabilities related to discontinued operations |
| $ |
| |
| 8 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Results of discontinued operations are summarized below:
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30 |
|
| September 30 |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Net services revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Marketing |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from litigation settlement, net |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
|
| ( | ) |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
(Loss) income from discontinued operations before income taxes |
|
| ( | ) |
|
|
|
|
|
|
|
|
| |||
Income tax benefit |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
(Loss) income from discontinued operations, net of tax |
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from sale of discontinued operations before income taxes |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain from sale of discontinued operations, net of tax |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The accounting policies for the discontinued In-Store Marketing Business, including for revenue recognition, are disclosed in the notes to financial statements included in the Company’s Annual Report on Form 10-K.
In July 2019, the Company filed suit against News Corporation, News America Marketing FSI L.L.C., and News America Marketing In-Store Services L.L.C. (collectively, “News America”), alleging violations of federal and state antitrust and tort laws by News America. On July 1, 2022, the Company entered into a $
For the three and nine months ended September 30, 2023, the Company recorded income tax expense on discontinued operations of $
| 9 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Summary of Significant Accounting Policies.
Cash and Cash Equivalents and Restricted Cash. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows:
|
| September 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Restricted cash |
|
|
|
|
|
| ||
Total cash, cash equivalents and restricted cash |
| $ |
|
| $ |
| ||
Subsequent to September 30, 2023 the restriction on the cash was released back to the Company, as it was related to a lease that transferred to the Buyer of the In-Store Marketing Business.
Stock-Based Compensation. The Company measures and recognizes compensation expense for all stock-based payments at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock as of the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and employee stock purchase plan rights. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.
During the nine-month periods ended September 30, 2023 and 2022 no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors in August 2022.
In August 2022, non-employee members of the Board of Directors received restricted stock grants totaling
In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling
The Company estimated the fair value of stock-based awards granted during the three and nine months ended September 30, 2023, under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of
During the three months ended September 30, 2023, the Company issued
Total stock-based compensation expense recorded for the three and nine months ended September 30, 2023 was $
Net (Loss) Income per Share. Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average shares outstanding and excludes any potential dilutive effects of stock options and restricted stock units and awards. Diluted net (loss) income per share gives effect to all dilutive potential common shares outstanding during the period.
In determining diluted net income (loss) per share, whether net income from continuing operations is positive or negative controls whether dilutive shares are included in the determination. For all periods presented, net income from continuing operations is negative, a net loss. Accordingly, since including dilutive shares would dilute the loss from continuing operations, no dilutive shares are included in any of the per share calculations.
| 10 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Due to the net loss from continuing operations incurred during the three and nine months ended September 30, 2023 and 2022, all outstanding stock awards were considered anti-dilutive for those periods. At September 30, 2022 and 2023 options to purchase
Weighted average common shares outstanding for the three and nine months ended September 30, 2023 and 2022 were as follows:
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30 |
|
| September 30 |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Denominator for basic net income (loss) per share - weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options and restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Denominator for diluted net income (loss) per share - weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Restructuring. In connection with the change in the Company’s strategy to the Lending Business, the Company’s prior CEO, Kristine A. Glancy, departed on August 31, 2023. Included in general and administrative expense of continuing operations is expense of $
4. Leases.
At September 30, 2023, the Company has a month-to-month operating lease with a related party with monthly payments of $
The cost components in continuing operations of the Company’s operating leases were as follows for the three and nine month periods ended September 30, 2023 and 2022:
|
| Three months ended September 30 |
|
| Nine months ended September 30 |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Related party lease |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Other |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
5. Income Taxes.
For the three and nine months ended September 30, 2023, the Company recorded income tax (benefit) of $(
| 11 |
| Table of Contents |
Lendway, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Nine months ended September 30, |
| 2023 |
|
| 2022 |
| ||
Federal statutory rate |
|
| % |
|
| % | ||
Stock-based awards |
|
|
|
|
| ( | ) | |
State taxes |
|
|
|
|
|
| ||
Impact of uncertain tax positions |
|
|
|
|
|
| ||
Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Other |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Effective federal income tax rate |
|
| % |
|
| ( | )% | |
Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of enacted tax laws. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which it operates, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustment to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria.
As of September 30, 2023, and December 31, 2022, the Company had unrecognized tax benefits totaling $
At December 31, 2022, the Company had Federal net operating loss (NOL) to carry forward of approximately $
6. Stock Repurchase Plan.
On August 28, 2023, the Company’s Board of Directors authorized the repurchase of up to
For the three months ended September 30, 2023 the Company repurchased
7. Legal Proceedings.
The Company is subject to various legal matters in the normal course of business. The outcome of these matters is not expected to have a material effect on the Company’s financial position or results of operations.
| 12 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Company’s financial statements and related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated due to various factors discussed under “Cautionary Statement Regarding Forward-Looking Statements” and elsewhere, including Part II, Item 1A, in this Quarterly Report on Form 10-Q (“10-Q”) and the “Risk Factors” described in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, our Current Reports on Form 8-K and our other SEC filings.
Company Overview
We are building a scalable non-bank lending business (our “Lending Business”) to purchase existing loans or originate and fund new loans, all of which will be secured by collateral (individually or collectively, the “Secured Loans”). In April 2023, we announced the launch of our Lending Business, through the hiring of a Senior Vice President of Lending with over 20 years of experience in credit and lending.
Initially, we intend to focus on loans secured by real estate, primarily for agricultural purposes. We expect to expand our product offerings over time as we identify needs and opportunities in the marketplace for loans generally. Our plan, therefore, is to build a portfolio of well-secured loans, with a portion of the credit risk being participated to third parties in most cases, to maintain a low net loss experience and to charge fully compensatory rates and fees.
The primary sources of revenue from our Lending Business are expected to consist of:
| · | 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. |
We are building our strategy and long-term growth initiatives upon these fundamental factors:
| · | 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. |
We face competition from other entities that originate, purchase, securitize, or provide financing for Secured Loans. These entities include commercial and investment banks, insurance companies, Farm Credit System institutions, and financial funds.
We plan to compete by controlling overhead costs and by sourcing competitive cost of funds to blend with equity capital to provide flexible financing options and products designed to meet the varied needs of our customers.
The relative competitiveness of our loan rates and our ability to grow loan volume are affected by many factors, including:
| · | demand for lending products we offer; |
| · | available capital; and |
| · | liquidity and cost of funds from third-party funding sources. |
During the third quarter, the Company increased its marketing activity and met with a number of prospects. We anticipate minimal revenue and losses from continuing operations for the remainder of 2023.
| 13 |
| Table of Contents |
We continue to explore other strategic options to maximize stockholder value. Potential strategic alternatives that may be evaluated include, but are not limited to, an acquisition, merger, business combination, in-licensing, start-up of new business or other strategic initiatives. There can be no assurance that this process will result in any transaction or other initiatives.
Recent Developments
On August 4, 2023 we changed our name from “Insignia Systems, Inc.” and reincorporated from Minnesota to Delaware. As part of the name change, our common stock now trades under the symbol “LDWY” on The Nasdaq Stock Market LLC.
On August 3, 2023, we sold certain assets and certain liabilities relating to our former business of providing in-store advertising solutions to brands, retailers, shopper marketing agencies and brokerages (the “In-Store Marketing Business”) for a sale price of $3.5 million to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”), under an Asset Purchase Agreement dated May 24, 2023 (the “Purchase Agreement”). The Company retained accounts receivable, as well as all cash, cash equivalents and marketable securities. The cash consideration for the sale was subject to a post-closing adjustment that depended on the net balance of (i) cash received by the Company for programs that remained unexecuted as of August 3, 2023, minus (ii) the payments made by the Company to vendors for unexecuted programs. The final purchase adjustment for the net balance was to reduce the cash consideration by $1.5 million, with the Company retaining an equal amount of cash that had been received for unexecuted programs. Under the Purchase Agreement, $200,000 was escrowed for a twelve month period for any future claims, as defined in the Purchase Agreement by the Buyer against the Company.
We also incurred transaction-related severance and other separation benefits in connection with the termination of certain of our officers and employees of approximately $1,416,000, $490,000 of which was attributed to the sale of the In-Store Marketing Business, as well as retention award payouts totaling $343,000 and employee bonuses totaling $164,000, each of which were recorded as expense in the three months ended September 30, 2023. The sum of transaction-related severance, retention awards and bonuses was $1,923,000, of which $974,000 was recorded in continuing operations and $949,000 was recorded in discontinued operations in the three months ended September 30,2023.
Business Overview
Summary of Financial Results
For the three and nine months ended September 30, 2023, continuing operations, the Lending Business, had no revenue.
During the nine months ended September 30, 2023, cash and cash equivalents and restricted cash increased by $515,000 from $14,524,000 at December 31, 2022, to $15,039,000 at September 30, 2023. The increase was primarily driven by collections of accounts receivable from discontinuing the In-Store Marketing Business, as well as proceeds from the sale of the In-Store Marketing Business. We had no debt at September 30, 2023. Working capital increased $2,513,000 from $13,379,000 at December 31, 2022 to $15,892,000 at September 30, 2023.
| 14 |
| Table of Contents |
Results of Operations
The following table sets forth, for the periods indicated, certain items from our continuing operations in our condensed consolidated statements of operations and the percentage change year-over-year. The Company had no revenue from continuing operations.
|
| Three Months Ended September 30 |
|
| Increase (decrease) from 2022 to 2023 |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| Amount |
|
| Percent |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
| $ | 69,000 |
|
| $ | - |
|
| $ | 69,000 |
|
|
| 100.0 | % |
General and administrative |
|
| 1,564,000 |
|
|
| 488,000 |
|
|
| 1,076,000 |
|
|
| 220.5 | % |
Total operating expenses |
|
| 1,633,000 |
|
|
| 488,000 |
|
|
| 1,145,000 |
|
|
| 234.6 | % |
Operating loss |
|
| (1,633,000 | ) |
|
| (488,000 | ) |
|
| (1,145,000 | ) |
|
| 234.6 | % |
Interest income |
|
| 111,000 |
|
|
| 55,000 |
|
|
| 56,000 |
|
|
| 101.8 | % |
Loss from continuing operations before income taxes |
|
| (1,522,000 | ) |
|
| (433,000 | ) |
|
| (1,089,000 | ) |
|
| 251.5 | % |
Income tax (benefit) expense |
|
| (11,000 | ) |
|
| 1,000 |
|
|
| (12,000 | ) |
|
| (1200.0 | )% |
Net Loss from continuing operations |
| $ | (1,511,000 | ) |
| $ | (434,000 | ) |
| $ | (1,077,000 | ) |
|
| 248.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nine Months Ended September 30 |
|
| Increase (decrease) from 2022 to 2023 |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| Amount |
|
| Percent |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
| $ | 134,000 |
|
| $ | - |
|
| $ | 134,000 |
|
|
| 100.0 | % |
General and administrative |
|
| 2,849,000 |
|
|
| 1,663,000 |
|
|
| 1,186,000 |
|
|
| 71.3 | % |
Total operating expenses |
|
| 2,983,000 |
|
|
| 1,663,000 |
|
|
| 1,320,000 |
|
|
| 79.4 | % |
Operating loss |
|
| (2,983,000 | ) |
|
| (1,663,000 | ) |
|
| (1,320,000 | ) |
|
| 79.4 | % |
Interest income |
|
| 325,000 |
|
|
| 55,000 |
|
|
| 270,000 |
|
|
| 490.9 | % |
Loss from continuing operations before income taxes |
|
| (2,658,000 | ) |
|
| (1,608,000 | ) |
|
| (1,050,000 | ) |
|
| 65.3 | % |
Income tax (benefit) expense |
|
| (4,000 | ) |
|
| 5,000 |
|
|
| (9,000 | ) |
|
| (180.0 | )% |
Net Loss from continuing operations |
| $ | (2,654,000 | ) |
| $ | (1,613,000 | ) |
| $ | (1,041,000 | ) |
|
| 64.5 | % |
Three and Nine Months Ended September 30, 2023 Compared to Three and Nine Months Ended September 30, 2022
Operating Expenses
Sales and Marketing. Sales and marketing expenses for the three and nine months ended September 30, 2023 were $69,000 and $134,000, consisting of a portion of our CEO’s compensation, as well as website and public relations costs. There was no comparable expense for the three and nine months ended September 30, 2022.
General and administrative. General and administrative expenses for the three months ended September 30, 2023 increased 220.5% to $1,564,000 compared to $488,000 for the three months ended September 30, 2022. The increase was primarily due to transaction-related severance and other separation benefits amounting to $926,000 in connection with the termination of Kristine Glancy, our previous CEO. General and administrative expenses for the nine months ended September 30, 2023 increased 71.3% to $2,849,000 compared to $1,663,000 for the nine months ended September 30, 2022. The increase was primarily due to transaction-related severance and other separation benefits in connection with the termination of Kristine Glancy, mentioned above, in addition to the comparison of reduced expense in 2022 from the Director Deferred Compensation Plan due to a reduction in our share price during the nine months ended September 30, 2022. We are working with all our vendors and service providers to reduce certain expenses going forward.
Interest Income. Interest income for the three months ended September 30, 2023 was $111,000 compared to $55,000 for the three months ended September 30, 2022. Interest income for the nine months ended September 30, 2023 was $325,000 compared to $55,000 for the nine months ended September 30, 2022. Interest income in 2023 increased over 2022 primarily due to higher invested balances, which included the net proceeds from litigation of $12 million received in July 2022 and the higher interest rates available on investment in short-term treasury bills and interest-bearing savings.
| 15 |
| Table of Contents |
Income Taxes. For the three and nine months ended September 30, 2023 the Company recorded income tax (benefit) of $(11,000) and $(4,000) respectively, or 0.6% and 0.1% of loss from continuing operations before income before taxes, respectively. For the three and nine months ended September 30, 2022 the Company recorded income tax expense of $1,000 and $5,000 respectively, or (0.2)% and (0.3)% of loss from continuing operations before income before taxes, respectively. The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 comprises federal and state income taxes. The primary differences between the Company’s September 30, 2023 and 2022 effective tax rates and the statutory federal rate are state income taxes and changes in the Company’s valuation allowance against its deferred tax assets.
The Company reassesses its effective tax rate each reporting period and adjusts the annual effective rate if deemed necessary, based on projected annual taxable income (loss).
Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of enacted tax laws. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustment to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria.
As of September 30, 2023, and December 31, 2022, the Company had unrecognized tax benefits totaling $41,000 and $53,000, respectively, including interest, which relates to state nexus issues. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $41,000.
At December 31, 2022, the Company had Federal net operating loss (NOL) to carry forward of approximately $2,900,000. As of September 30, 2023, the Company estimates remaining Federal NOL carryforwards to be approximately $1,390,000. Federal NOL utilization is limited to 80% of estimated taxable income. The estimated NOL carry forward will be adjusted at year end for actual results.
Net Loss from Continuing Operations. For the reasons stated above, net loss from continuing operations for the three months ended September 30, 2023 was $1,511,000 and net loss from continuing operations for the nine months ended September 30, 2023 was $2,654,000, compared to net loss from continuing operations of $434,000 and $1,613,000, respectively, for the three and nine months ending September 30, 2022. As we seek to grow our Lending Business, we anticipate minimal revenue and losses from continuing operations for the remainder of the year.
Liquidity and Capital Resources
We have historically financed our operations with proceeds from stock sales and sales of our services and products, subject to occasional supplemental proceeds from the settlement of litigation. The sale of the In-Store Marketing Business on August 3, 2023 generated approximately $1.6 million of cash, directly from the buyer. At September 30, 2023, working capital (current assets less current liabilities) was $15,892,000, compared to $13,379,000 at December 31, 2022. During the nine months ended September 30, 2023, cash and cash equivalents and restricted cash increased $515,000 from $14,524,000 at December 31, 2022 to $15,039,000 at September 30, 2023.
Operating Activities. Net cash used in continuing operating activities during the nine months ended September 30, 2023, was $2,325,000. Net income of $2,738,000, less income from discontinued operations of $2,422,000, less the gain from the sale of discontinued operations of $2,970,000, plus non-cash adjustments of $46,000, plus changes in operating assets and liabilities of $283,000, resulted in the $2,325,000 of cash used in operating activities. The non-cash adjustments consisted of depreciation expense and stock-based compensation expense. The largest component of the change in operating assets and liabilities was accrued liabilities, which increased $630,000 from December 31, 2022. The increase was primarily due to the $650,000 of severance related payments that remains to be paid to the Company’s prior CEO, Ms. Glancy.
Investing Activities. Net cash provided by investing activities from continuing operations during the nine months ended September 30, 2023 was $1,557,000, which was due to the proceeds from the sale of our In-Store Marketing Business.
Financing Activities. Net cash used in financing activities during the nine months ended September 30, 2023 was $428,000, which related to cash used for the repurchase of common stock, partially offset by proceeds from the issuance of shares per the Director Deferred Compensation Plan for two former non-employee directors.
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Cash and cash equivalents plus restricted cash at September 30, 2023 were $15.0 million. The Company believes that based upon current business conditions and plans, its cash and cash equivalents balances will be sufficient for its cash requirements for at least the next 12 months.
On August 28, 2023, the Company’s Board of Directors authorized the repurchase of up to 400,000 shares of the Company’s common stock. The plan allows the purchases to be made in the open market or in privately negotiated transactions. The plan does not obligate the Company to repurchase any particular number of shares and may be suspended anytime at the Company’s discretion. In the three months ended September 30, 2023, the Company repurchased 75,345 shares at a total cost of $437,000.
As the Company grows its Lending Business, we may be required to finance this process through equity offerings or debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Additional capital may not be available when needed, on reasonable terms, or at all, and our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the U.S. and worldwide. If we are unable to raise additional funds when needed we may not be able to grow our Lending Business, or complete transactions related to the strategic alternatives process.
Critical Accounting Estimates
Our discussion of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. During the preparation of these financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including those related to allowance for doubtful accounts, income taxes, sales tax, and stock-based compensation expense. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of our analysis form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and the impact of such differences may be material to our financial statements.
Our significant accounting policies are described in Note 1 to the annual financial statements included in Part II, Item 8 of our Annual Report on Form 10-K as of and for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 9, 2023. We believe our most critical accounting estimates include the following:
| · | allowance for doubtful accounts; |
| · | sales taxes; |
| · | income taxes; and |
| · | stock-based compensation expense. |
Cautionary Statement Regarding Forward-Looking Statements
Certain statements made in this Quarterly Report on Form 10-Q, in the Company’s other SEC filings, in press releases and in oral statements to stockholders and securities analysts that are not statements of historical or current facts are “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of the Company to be materially different from the results or performance expressed or implied by such forward-looking statements. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “likely,” “may,” “plan,” “project,” “will” and similar expressions identify forward-looking statements. Forward-looking statements include statements expressing the intent, belief or current expectations of the Company and members of our management team regarding, for instance: (i) our belief that our cash balance and cash generated by operations will provide adequate liquidity and capital resources for at least the next twelve months; and (ii) our belief that we will reduce certain expenses going forward. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. These statements are subject to the risks and uncertainties that could cause actual results to differ materially and adversely from the forward-looking statements. These forward-looking statements are based on current information, which we have assessed and which by its nature is dynamic and subject to rapid and even abrupt changes.
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Factors that could cause our estimates and assumptions as to future performance, and our actual results, to differ materially include the following: Forward-looking statements involve known and unknown risks, uncertainties and other factors, including: (1) the availability of strategic alternatives on acceptable terms, if at all, (2) the limited history of our Lending Business, (3) the substantial risk of loss associated with lending generally, (4) market conditions that may restrict or delay appropriate or desirable Lending Business opportunities, (5) our ability to develop and maintain necessary processes and controls relating to our Lending Business (6) reliance on one or a small number of employees, (7) potential adverse classifications of our Company if we are unsuccessful in executing our business plan, (8) other economic, business, market, financial, competitive and/or regulatory factors affecting the Company’s business generally; and (9) our ability to attract and retain highly qualified managerial, operational and sales personnel. Our risks and uncertainties also include, but are not limited to, the risks presented in our Annual Report on Form 10-K for the year ended December 31, 2022 and this Quarterly Report on Form 10-Q, and any additional risks presented in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. We undertake no obligation (and expressly disclaim any such obligation) to update forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to update reasons why actual results would differ from those anticipated in any such forward-looking statements, other than as required by law.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and its principal financial officer and principal accounting officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s principal executive officer and its principal financial officer concluded that the Company’s disclosure controls and procedures as of September 30, 2023 were effective.
Changes in Internal Control Over Financial Reporting
No changes in the Company’s internal control over financial reporting occurred during the third quarter of 2023 that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we or any of our subsidiaries are a party or of which any of our property is the subject.
Item 1A. Risk Factors
Except as set forth below there have been no material changes in our risk factors from those previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.
RISKS RELATING TO OUR BUSINESS
Our new lending business has limited history.
Our Non-Bank Lending business (our “Lending Business”) is recently formed and has no operating history and has generated no revenues through September 30, 2023. This lack of operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter. There is no assurance that we can generate significant revenues in the non-bank lending marketplace, and even if revenues are generated there is no assurance that we can earn a profit from this new business. Because our Lending Business’s activities are in a very early stage, we can neither predict all potential risks nor assess the potential effects of those risks on our Lending Business’s, operating results, and financial condition or how much any factor, or combination of factors, could have an adverse effect on our business, results of operations and financial condition.
Non-bank lending involves a substantial risk of loss.
Our Lending Business intends to assume the ultimate credit risk of borrower defaults on its future planned loan assets, and our Lending Business’s earnings, which come from net interest income and fees on those assets, depend significantly on their performance. Widespread and sustained repayment shortfalls on loans in our Lending Business’s portfolio could result in losses, particularly if the value of the available collateral does not cover our Lending Business’s exposure, and could materially and adversely affect our Lending Business’s, operations, operating results, financial condition, liquidity, or capital levels.
RISKS RELATING TO ECONOMY AND MARKET CONDITIONS
Market conditions may restrict or delay desirable non-bank lending opportunities.
Our Lending Business’s operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the price or marketability of our Lending Business’s planned products and services or our Lending Business’s ability to offer its products and services, including, but not limited to:
| · | 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. |
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OPERATIONAL RISKS
Our Lending Business and related operations require development of new processes and controls.
Our Lending Business is exposed to operational risk due to the complex nature of its planned business operations and the processes and systems used to undertake its business activities and comply with regulatory requirements. Operational risks specific to our Lending Business include the risks of loss resulting from:
| · | 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. |
Any of the foregoing could have an adverse effect on our ability to conduct our Lending Business, and our results of operations and financial condition.
The success of our Lending Business initially will depend on one or a small number of employees.
Our Lending Business will rely on its employee’s breadth and depth of knowledge of lending businesses and related industries to run its planned business operations successfully. If our Lending Business cannot retain and attract motivated and qualified employees or does not have adequate human capital to achieve its business objectives, our Lending Business’s performance, operations, financial condition, or reputation could be materially adversely affected.
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Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
On August 28, 2023, the Company announced that its Board of Directors authorized the repurchase of up to 400,000 shares of the Company’s common stock. The Company may purchase shares of its common stock from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws. Open market repurchases may be affected pursuant to Rule 10b5-1 trading plans. The manner, timing, number and prices of shares purchased under the authorization will be determined by management at its discretion and will depend on a number of factors, including the market price of our common stock, general market and economic conditions, and applicable legal requirements. The authorization does not obligate the Company to acquire any particular amount of its common stock or to acquire shares on any particular timetable and may be suspended or discontinued at any time at the Company’s discretion.
Repurchase activity for the three months ended September 30, 2023 (excluding fees associated with the repurchases of approximately $1,000), was as follows:
Period |
| Total number of shares purchased |
|
| Average price paid per share |
|
| Total number of shares purchased as part of publicly announced plans or programs |
|
| Approximate dollar value of shares purchased under the plans or programs |
|
| Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs |
| |||||
July 1 - 31, 2023 |
|
| - |
|
| $ | - |
|
|
| - |
|
| $ | - |
|
|
| 400,000 |
|
August 1 - 31, 2023 |
|
| 66,108 |
|
|
| 5.76 |
|
|
| 66,108 |
|
|
| 380,782 |
|
|
| 333,892 |
|
September 1 - 30, 2023 |
|
| 9,237 |
|
|
| 5.94 |
|
|
| 9,237 |
|
|
| 54,868 |
|
|
| 324,655 |
|
|
|
| 75,345 |
|
|
|
|
|
|
| 75,345 |
|
|
| 435,650 |
|
|
|
|
|
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended September 30, 2023, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits
Exhibit Number |
|
Description |
| Incorporated by Reference to/Method of Filing |
|
|
|
|
|
|
| Exhibit 2.1 to Current Report filed May 25, 2023 | ||
|
|
|
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|
|
| Exhibit 3.1 to Current Report filed August 9, 2023 | ||
|
|
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|
|
|
| Exhibit 3.2 to Current Report filed August 9, 2023 | ||
|
|
|
|
|
| Letter Agreement with Kristine A. Glancy dated July 13, 2023 |
| Exhibit 10.1 to Current Report filed July 19, 2023 | |
|
|
|
|
|
|
| Exhibit 10.1 to Current Report filed August 9, 2023 | ||
|
|
|
|
|
|
| Filed Electronically | ||
|
|
|
|
|
|
| Filed Electronically | ||
|
|
|
|
|
|
| Furnished Electronically | ||
|
|
|
|
|
101 |
| The following materials from Lendway, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 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 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 (embedded within the inline XBRL Document) |
| Filed Electronically |
* | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any document so furnished. |
|
|
† | Denotes a management contract or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(b) of Form 10-K. |
|
|
‡ | Redacted in compliance with Regulation S-K Item 601(a)(6) and certain exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LENDWAY, INC. |
|
| (Registrant) |
|
|
|
|
Dated: November 14, 2023 | /s/ Randy D. Uglem |
|
| Randy D. Uglem |
|
| President and Chief Executive Officer |
|
| (on behalf of registrant) |
|
|
|
|
Dated: November 14, 2023 | /s/ Zackery A. Weber |
|
| Zackery A. Weber |
|
| Vice President of Finance |
|
| (principal financial and accounting officer) |
|