Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | for the quarterly period ended September 30, 2025 for the transition period from ___________ to ____________ or Commission File Number: 001-13471 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 LENDWAY, INC. (State or ...

Exhibit 99.1 Contact: Lendway, Inc. Biz McShane, CFO (763) 392-6200 FOR IMMEDIATE RELEASE LENDWAY, INC. ANNOUNCES SEPTEMBER 30, 2025 FINANCIAL RESULTS MINNEAPOLIS, MN – November 10, 2025 – Lendway, Inc. (Nasdaq: LDWY) ("Lendway" or the "Company") today announced its financial results for the three months ended September 30, 2025. Overview Three months ended September 30, 2025 Lendway's Chairman and Co-Chief Executive Officer, Mark Jundt, commented, "This quarter reflects the natural seasonality of our busin ...

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) Lendway, Inc. reported strong Q2 and H1 2025 financial results, including record sales and profit growth, and announced a fiscal year-end change [Announcement & Management Commentary](index=1&type=section&id=Announcement%20%26%20Management%20Commentary) Lendway, Inc. announced Q2 and H1 2025 financial results, with management highlighting record Mother's Day sales, market share growth, strong performance, and a fiscal year-end change - Lendway, Inc. announced its financial results for the three and six months ended June 30, 2025[1](index=1&type=chunk) - Chairman and Co-CEO Mark Jundt reported **record-breaking** Mother's Day sales and meeting unprecedented customer demand[4](index=4&type=chunk) - Co-CEO Dan Philp stated the company **exceeded its market share growth goal**, leading to **record revenue** and a **more diverse customer base**[4](index=4&type=chunk) - Lendway's board of directors approved a change in fiscal year end from December 31 to June 30, with a six-month transition period from January 1, 2025, to June 30, 2025[4](index=4&type=chunk) [Key Financial Highlights (Q2 & H1 2025)](index=1&type=section&id=Key%20Financial%20Highlights%20(Q2%20%26%20H1%202025)) Lendway reported significant financial improvements for both the three and six months ended June 30, 2025, including increased net revenue, gross profit, and a shift from net loss to net income, alongside growth in Adjusted EBITDA and cash from operations Key Financial Highlights for Q2 2025 vs Q2 2024 | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change ($ millions) | | :-------------------------------- | :---------- | :---------- | :------- | | Net Revenue | $23.2 million | - | - | | Gross Profit | $5.4 million (23.3% of sales) | - | - | | Operating Income | $2.5 million | $0.2 million | +$2.3 million | | Net Income from Continuing Operations | $1.3 million | $(0.6) million | +$1.9 million | | Net Income Attributable to Lendway | $1.0 million ($0.58/diluted share) | $(0.5) million ($(0.29)/diluted share) | +$1.5 million | | Adjusted EBITDA | $2.6 million | $2.0 million | +$0.6 million | | Cash & Cash Equivalents (as of June 30, 2025) | $0.9 million | - | - | | Working Capital (as of June 30, 2025) | $1.1 million | - | - | | Cash Provided by Operating Activities | $6.3 million | $3.5 million | +$2.8 million | Key Financial Highlights for H1 2025 vs H1 2024 | Metric | H1 2025 ($ millions) | H1 2024 ($ millions) | Change ($ millions) | | :-------------------------------- | :---------- | :---------- | :------- | | Net Revenue | $35.6 million | - | - | | Gross Profit | $9.3 million (26.1% of sales) | - | - | | Operating Income | $3.9 million | $(1.5) million | +$5.4 million | | Net Income from Continuing Operations | $1.9 million | $(2.1) million | +$4.0 million | | Net Income Attributable to Lendway | $1.5 million ($0.82/diluted share) | $(1.7) million ($(0.95)/diluted share) | +$3.2 million | | Adjusted EBITDA | $5.3 million | $3.6 million | +$1.7 million | | Cash Provided by Continuing Operations | $8.0 million | $5.0 million | +$3.0 million | [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Lendway's Q2 and H1 2025 financial performance showed significant improvements across net revenue, gross profit, operating income, and net income [Net Revenue](index=2&type=section&id=Net%20Revenue) Net revenue significantly increased for both the three and six months ended June 30, 2025, driven by the timing of the Easter holiday, stronger Mother's Day sales, and the full period inclusion of Bloomia's revenues in the six-month comparison Net Revenue Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change (%) | | :------------------- | :-------------- | :-------------- | :----- | | Three Months Ended | $23.2 million | $16.9 million | +37.3% | | Six Months Ended | $35.6 million | $25.0 million | +42.4% | - The **increase** in three-month net revenue was primarily due to the shift of the Easter holiday into Q2 2025 and **increased** stems sold for Mother's Day[6](index=6&type=chunk) - The **increase** in six-month net revenue was primarily due to the **timing of the Bloomia acquisition**, reflecting a **full six months of revenue** in 2025 compared to a partial period in 2024, and stronger Mother's Day sales[7](index=7&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit increased in absolute terms for both periods, but gross profit as a percentage of sales saw a slight decrease in Q2 2025 (excluding prior year's one-time amortization) and an increase in H1 2025, primarily due to higher bulb costs impacting margins Gross Profit Performance | Period | June 30, 2025 ($ millions) | % of Sales (%) | June 30, 2024 ($ millions) | % of Sales (%) | | :------------------- | :-------------- | :--------- | :-------------- | :--------- | | Three Months Ended | $5.4 million | 23.3% | $3.9 million | 23.1% | | Six Months Ended | $9.3 million | 26.1% | $5.7 million | 22.6% | - Excluding a one-time amortization of **$0.2 million** in Q2 2024 related to the Bloomia acquisition, gross profit as a percent of revenue **decreased** primarily due to **higher bulb costs**[8](index=8&type=chunk) - Gross profit in H1 2024 included **$1.5 million** of one-time fair value of inventory amortization. Excluding this, gross profit as a percent of revenue **decreased** primarily due to **higher bulb costs**[9](index=9&type=chunk) [Operating Income (Loss)](index=2&type=section&id=Operating%20Income%20(Loss)) Operating income significantly improved for both the three and six months ended June 30, 2025, primarily driven by higher sales and the absence of significant acquisition-related and one-time costs incurred in the prior year Operating Income (Loss) Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $2.5 million | $0.2 million | +$2.3 million | | Six Months Ended | $3.9 million | $(1.5) million | +$5.4 million | - The **improvement** in Q2 2025 operating income was due to **higher sales** and the **absence of $0.7 million in Bloomia acquisition costs** and **$0.4 million in other one-time costs** from the prior year[10](index=10&type=chunk) - The **improvement** in H1 2025 operating income was primarily due to **$2.2 million in acquisition costs** and **$1.5 million in fair value inventory amortization costs** associated with the Bloomia acquisition in the prior year, and the **timing of the acquisition**[11](index=11&type=chunk) [Net Income (Loss) from Continuing Operations](index=2&type=section&id=Net%20Income%20(Loss)%20from%20Continuing%20Operations) Lendway transitioned from a net loss to net income from continuing operations for both the three and six months ended June 30, 2025, primarily due to the significant improvement in operating income and a higher tax benefit in the three-month period Net Income (Loss) from Continuing Operations | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $1.3 million | $(0.6) million | +$1.9 million | | Six Months Ended | $1.9 million | $(2.1) million | +$4.0 million | - The **improvement** in Q2 2025 was due to **improved operating income** and a **higher tax benefit**[12](index=12&type=chunk) - The **improvement** in H1 2025 was primarily due to **improved operating income**[13](index=13&type=chunk) [Net Income (Loss) Attributable to Lendway](index=2&type=section&id=Net%20Income%20(Loss)%20Attributable%20to%20Lendway) Lendway reported a positive net income attributable to shareholders for both periods in 2025, reversing losses from the prior year, driven by improved operating income and tax benefits Net Income (Loss) Attributable to Lendway | Period | June 30, 2025 ($ millions) | EPS (Diluted, $) | June 30, 2024 ($ millions) | EPS (Diluted, $) | Change (Net Income, $ millions) | | :------------------- | :-------------- | :------------ | :-------------- | :------------ | :------------------ | | Three Months Ended | $1.0 million | $0.58 | $(0.5) million | $(0.29) | +$1.5 million | | Six Months Ended | $1.5 million | $0.82 | $(1.7) million | $(0.95) | +$3.2 million | - The **improvement** in Q2 2025 was due to **improved operating income** and a **higher tax benefit**[14](index=14&type=chunk) [Adjusted EBITDA](index=3&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased for both Lendway and its subsidiary Bloomia, reflecting higher gross profit driven by increased sales and the timing of the Bloomia acquisition [Lendway Adjusted EBITDA](index=3&type=section&id=Lendway%20Adjusted%20EBITDA) Lendway's Adjusted EBITDA increased for both the three and six months ended June 30, 2025, primarily due to higher gross profit from increased sales and the timing of the Bloomia acquisition Lendway Adjusted EBITDA Performance | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Three Months Ended | $2.6 million | $2.0 million | +$0.6 million | | Six Months Ended | $5.3 million | $3.6 million | +$1.7 million | - The **increase** in Adjusted EBITDA was due to **higher gross profit** related to **higher sales**[16](index=16&type=chunk) - For the six months, the **increase** was also influenced by the **timing of the Bloomia acquisition**[16](index=16&type=chunk) [Bloomia Adjusted EBITDA](index=3&type=section&id=Bloomia%20Adjusted%20EBITDA) Bloomia's Adjusted EBITDA increased for the six months ended June 30, 2025, driven by higher gross profit from increased sales and the timing of its acquisition Bloomia Adjusted EBITDA Performance (Six Months Ended) | Period | June 30, 2025 ($ millions) | June 30, 2024 ($ millions) | Change ($ millions) | | :------------------- | :-------------- | :-------------- | :------- | | Six Months Ended | $6.1 million | $4.9 million | +$1.2 million | - The **increase** in Bloomia's Adjusted EBITDA was due to **higher gross profit** related to **higher sales** and the **timing of the acquisition**[17](index=17&type=chunk) [Financial Position](index=3&type=section&id=Financial%20Position) Lendway's balance sheet as of June 30, 2025, reflects reduced debt, increased stockholders' equity, and seasonal working capital fluctuations [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, Lendway's cash and cash equivalents decreased due to debt repayments, while working capital also saw a seasonal decrease. Total debt significantly reduced, and stockholders' equity increased Selected Balance Sheet Data (as of June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :---------------------- | :-------------- | :---------------- | :------- | | Cash and cash equivalents | $0.9 million | $1.8 million | $(0.9) million | | Working capital | $1.1 million | $11.0 million | $(9.9) million | | Total assets | $96.1 million | $99.9 million | $(3.8) million | | Total debt | $34.1 million | $42.1 million | $(8.0) million | | Total liabilities | $81.3 million | $88.1 million | $(6.8) million | | Stockholders' equity | $14.8 million | $11.9 million | +$2.9 million | - The **decrease** in cash and cash equivalents was primarily due to **debt repayments** in the six months ended June 30, 2025[18](index=18&type=chunk) - Working capital is **near its trough** at June 30 due to the seasonality of the business, compared to its **peak at December 31**[18](index=18&type=chunk) - **Total debt decreased by $8.0 million** due to **repayments** in the quarter[18](index=18&type=chunk) [About Lendway, Inc.](index=3&type=section&id=About%20Lendway%2C%20Inc.) Lendway, Inc. is a specialty agricultural company focused on managing ag investments in the U.S. and internationally, holding a majority ownership in Bloomia, a major U.S. fresh-cut tulip producer - Lendway, Inc. (Nasdaq: LDWY) is a specialty ag company[19](index=19&type=chunk) - The company focuses on making and managing ag investments in the U.S. and internationally[19](index=19&type=chunk) - Lendway is the majority owner of Bloomia, one of the largest producers of fresh-cut tulips in the United States[19](index=19&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, listing factors like integration, competition, and economic conditions - The press release contains "**forward-looking statements**" subject to **risks and uncertainties** that may cause actual results to **differ materially**[20](index=20&type=chunk) - Key factors that could cause actual results to differ include the ability to integrate and operate the newly acquired Bloomia business, competition, changes in interest rates, compliance with credit agreement requirements, economic and market conditions, and reliance on key employees[21](index=21&type=chunk) - Readers are cautioned not to place **undue reliance** on these statements, which are based on current information and subject to rapid changes[20](index=20&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents detailed consolidated statements of operations, comprehensive income (loss), and selected balance sheet data for Lendway, Inc [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section presents detailed consolidated statements of operations and comprehensive income (loss) for Lendway, Inc. for the three and six months ended June 30, 2025, and 2024 Consolidated Statements of Operations and Comprehensive Income (Loss) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue, net | $23,179,000 | $16,920,000 | $35,622,000 | $24,953,000 | | Gross profit | $5,391,000 | $3,906,000 | $9,280,000 | $5,650,000 | | Operating income (loss) | $2,485,000 | $165,000 | $3,917,000 | $(1,479,000) | | Net income (loss) from continuing operations | $1,319,000 | $(598,000) | $1,936,000 | $(2,084,000) | | Net income (loss) attributable to Lendway, Inc. | $1,047,000 | $(515,000) | $1,496,000 | $(1,678,000) | | Diluted earnings per share | $0.58 | $(0.29) | $0.82 | $(0.95) | [Selected Balance Sheet Data](index=6&type=section&id=Selected%20Balance%20Sheet%20Data) This section provides key balance sheet figures for Lendway, Inc. as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity Selected Balance Sheet Data | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $906,000 | $1,759,000 | | Working capital (1) | $1,098,000 | $11,026,000 | | Total assets | $96,102,000 | $99,985,000 | | Total debt | $34,083,000 | $42,090,000 | | Total liabilities | $81,265,000 | $88,091,000 | | Stockholders' equity | $14,837,000 | $11,894,000 | - Working capital represents current assets less current liabilities[24](index=24&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA to GAAP net income, providing insights into core operating performance [Reconciliation of EBITDA and Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) This section reconciles net income (loss) from continuing operations to EBITDA and Adjusted EBITDA, highlighting adjustments for non-recurring items - **Non-GAAP financial measures** like EBITDA and Adjusted EBITDA are provided as supplemental information and are **not substitutes for GAAP measures**[25](index=25&type=chunk) - These measures **exclude non-recurring transactions** such as acquisition-related costs and non-cash step-up inventory write-offs to **provide a clearer view of core operating performance**[26](index=26&type=chunk) Reconciliation of Net Income (Loss) from Continuing Operations to EBITDA and Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) from continuing operations | $1,319,000 | $(598,000) | $1,936,000 | $(2,084,000) | | Interest expense (income), net | $935,000 | $964,000 | $1,905,000 | $1,189,000 | | Income tax (benefit) expense | $(469,000) | $(201,000) | $(313,000) | $(548,000) | | Depreciation and amortization | $848,000 | $808,000 | $1,683,000 | $1,108,000 | | **EBITDA** | **$2,633,000** | **$973,000** | **$5,211,000** | **$(335,000)** | | Acquisition and integration-related costs | — | $652,000 | $24,000 | $2,194,000 | | Non-cash step-up inventory write-off | — | $162,000 | — | $1,522,000 | | Severance | — | — | $39,000 | — | | One-time waste costs | — | $270,000 | — | $270,000 | | Non-operating (income) expense | — | $(36,000) | — | $(36,000) | | **Adjusted EBITDA** | **$2,633,000** | **$2,021,000** | **$5,274,000** | **$3,615,000** | [Reconciliation of Bloomia Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20Bloomia%20Adjusted%20EBITDA) This section reconciles Bloomia's adjusted EBITDA to the total company's adjusted EBITDA, isolating Bloomia's performance by excluding Lendway corporate overhead - **Management excludes Lendway corporate overhead** when evaluating its investment in Bloomia[28](index=28&type=chunk) Reconciliation of Bloomia Adjusted EBITDA to Total Company Adjusted EBITDA (Six Months Ended June 30, 2025) | Metric | Bloomia ($) | Lendway Overhead ($) | Total ($) | | :------------------------------------------------ | :---------- | :--------------- | :---------- | | Income (loss) from continuing operations before income taxes | $2,426,000 | $(803,000) | $1,623,000 | | Depreciation and amortization | $1,677,000 | $6,000 | $1,683,000 | | Interest expense, net | $1,894,000 | $11,000 | $1,905,000 | | **EBITDA** | **$5,997,000** | **$(786,000)** | **$5,211,000** | | Acquisition and integration-related costs | $24,000 | — | $24,000 | | Severance | $39,000 | — | $39,000 | | **Adjusted EBITDA** | **$6,060,000** | **$(786,000)** | **$5,274,000** | Reconciliation of Bloomia Adjusted EBITDA to Total Company Adjusted EBITDA (Acquisition to Six Months Ended June 30, 2024) | Metric | Bloomia ($) | Lendway Overhead ($) | Total ($) | | :------------------------------------------------ | :---------- | :--------------- | :---------- | | Loss from continuing operations before income taxes | $(1,517,000) | $(1,115,000) | $(2,632,000) | | Depreciation and amortization | $1,108,000 | — | $1,108,000 | | Interest expense (income), net | $1,315,000 | $(126,000) | $1,189,000 | | **EBITDA** | **$906,000** | **$(1,241,000)** | **$(335,000)** | | Acquisition and integration-related costs | $2,194,000 | — | $2,194,000 | | Non-cash step-up inventory write-off | $1,522,000 | — | $1,522,000 | | One-time waste costs | $270,000 | — | $270,000 | | Non-operating income | $(36,000) | — | $(36,000) | | **Adjusted EBITDA** | **$4,856,000** | **$(1,241,000)** | **$3,615,000** | - Management uses EBITDA, Adjusted EBITDA, and Bloomia Adjusted EBITDA to **evaluate historical and prospective financial performance**, **measure operational profitability**, and **assess compliance with credit agreement covenants**[29](index=29&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2025 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: 001-13471 LENDWAY, INC. (Exact name of registrant as specified in its charter) | | | (State or oth ...

[Introduction and Company Overview](index=1&type=section&id=Introduction%20and%20Company%20Overview) This section provides an overview of Lendway's recent financial performance, strategic changes, and future outlook [Announcement and CEO Commentary](index=1&type=section&id=Announcement%20and%20CEO%20Commentary) Lendway, Inc. reported strong financial performance for Q1 2025, driven by the spring tulip season and Bloomia's full inclusion, with positive trends expected to continue - Lendway reported **strong financial performance** for the quarter ended March 31, 2025, with notable improvements in both revenue and EBITDA, reflecting the strong spring tulip season[3](index=3&type=chunk) - The company expects **positive trends to continue**, driven by upcoming Easter and Mother's Day sales[3](index=3&type=chunk) [Fiscal Year End Change](index=1&type=section&id=Fiscal%20Year%20End%20Change) Lendway's board approved changing the fiscal year end from December 31 to June 30, with a six-month transition period in 2025 - Lendway's fiscal year end has been changed from **December 31 to June 30**[3](index=3&type=chunk) - A **six-month transition period** from January 1, 2025, to June 30, 2025, will be reported[3](index=3&type=chunk) [Quarter Results Overview](index=1&type=section&id=Quarter%20Results%20Overview) This section summarizes Lendway's key financial achievements for the quarter, highlighting significant improvements across core metrics [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Lendway reported significant financial improvements for Q1 2025, including increased net revenue, a shift to operating income, and positive net income, largely due to Bloomia's full operations Key Financial Highlights | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change/Note | | :----- | :------------ | :------------ | :---------- | | Net Revenue | $12.4 million | $8.0 million | +55% (due to full Bloomia ops) | | Gross Profit | $3.9 million (31.3% of sales) | $1.7 million (21.7% of sales) | +129% | | Operating Income (Loss) | $1.4 million | $(1.6) million | Shift from loss to income | | Net Income (Loss) from Continuing Operations | $0.6 million | $(1.5) million | Shift from loss to income | | Net Income (Loss) Attributable to Lendway | $0.4 million | $(1.2) million | Shift from loss to income | | Basic & Diluted EPS | $0.25 | $(0.67) | Shift from loss to income | | Adjusted EBITDA | $2.6 million | $1.6 million | +62.5% | | Cash & Cash Equivalents (Mar 31, 2025) | $1.3 million | N/A | N/A | | Working Capital (Mar 31, 2025) | $6.3 million | N/A | N/A | | Cash Provided by Continuing Operations | $1.7 million | $1.4 million | +21.4% | [Detailed Financial Performance Analysis](index=1&type=section&id=Detailed%20Financial%20Performance%20Analysis) This section provides an in-depth analysis of Lendway's revenue, profit, and income metrics, detailing the factors contributing to changes [Net Revenue](index=1&type=section&id=Net%20Revenue) Net revenue for Q1 2025 significantly increased to $12.4 million from $8.0 million, entirely from Bloomia's full quarter of operations Net Revenue | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Revenue | $12,443,000 | $8,033,000 | - All revenue was from Bloomia, which was acquired in February 2024, resulting in **three full months of revenue in 2025** compared to approximately six weeks in 2024[4](index=4&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit rose to $3.9 million (31.3% of sales) in Q1 2025, up from $1.7 million (21.7% of sales), due to Bloomia's full operations and absence of prior year's acquisition-related costs Gross Profit | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Gross Profit | $3,889,000 | $1,744,000 | | Gross Profit Margin | 31.3% | 21.7% | - In 2024, inventory was written up to fair value related to the acquisition of Bloomia, and **$1.4 million of amortization costs** were included in the period[6](index=6&type=chunk) - The first half of the calendar year historically has the **highest sales and efficiencies for Bloomia**[6](index=6&type=chunk) [Operating Income (Loss)](index=2&type=section&id=Operating%20Income%20%28Loss%29) The Company achieved an operating income of $1.4 million in Q1 2025, a significant improvement from a $1.6 million loss, primarily due to Bloomia's full operating results and the absence of $1.5 million in prior year acquisition costs Operating Income (Loss) | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Operating Income (Loss) | $1,432,000 | $(1,644,000) | - The improvement primarily relates to **$1.5 million of costs associated with the acquisition of Bloomia in 2024** and a full quarter of operating results in 2025[7](index=7&type=chunk) [Net Income (Loss) from Continuing Operations](index=2&type=section&id=Net%20Income%20%28Loss%29%20from%20Continuing%20Operations) Net income from continuing operations turned positive at $0.6 million in Q1 2025, compared to a $1.5 million loss, driven by Bloomia's full operations and absence of prior year transaction costs, partially offset by higher interest expense Net Income (Loss) from Continuing Operations | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Income (Loss) from Continuing Operations | $617,000 | $(1,486,000) | - The improvement is due to a full quarter of Bloomia operations in 2025 and **$1.5 million of transaction costs in the prior year**, partially offset by higher interest expense[8](index=8&type=chunk) [Net Income (Loss) Attributable to Lendway](index=2&type=section&id=Net%20Income%20%28Loss%29%20Attributable%20to%20Lendway) Net income attributable to Lendway was $0.4 million ($0.25 EPS) in Q1 2025, a significant improvement from a $1.2 million loss ($0.67 EPS), driven by Bloomia's full operations and absence of prior year transaction costs, despite higher interest expense Net Income (Loss) Attributable to Lendway | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Net Income (Loss) Attributable to Lendway | $449,000 | $(1,163,000) | | Basic and Diluted EPS | $0.25 | $(0.67) | - The improvement is due to a full quarter of Bloomia operations in 2025 and **$1.5 million of transaction costs in the prior year**, partially offset by higher interest expense[9](index=9&type=chunk) [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased to $2.6 million in Q1 2025 from $1.6 million, primarily due to Bloomia's full operating income inclusion in the 2025 period Adjusted EBITDA | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Adjusted EBITDA | $2,641,000 | $1,594,000 | - The increase is due to a **full quarter of Bloomia operating income** included in the 2025 period versus approximately six weeks in the 2024 period[10](index=10&type=chunk) [Bloomia Adjusted EBITDA](index=2&type=section&id=Bloomia%20Adjusted%20EBITDA) Bloomia generated $3.0 million of Adjusted EBITDA in Q1 2025, reflecting its seasonal business with strongest sales and earnings historically in the first two quarters Bloomia Adjusted EBITDA | Metric | Q1 2025 (USD) | Acquisition to March 31, 2024 (USD) | | :----- | :------------ | :---------------------------------- | | Bloomia Adjusted EBITDA | $2,981,000 | $2,202,000 | - The seasonal Bloomia business historically has its **strongest sales and earnings in the first two quarters** of the year[11](index=11&type=chunk) [Financial Position](index=2&type=section&id=Financial%20Position) This section outlines Lendway's balance sheet, detailing changes in cash, working capital, and total debt [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet%20Overview) As of March 31, 2025, Lendway's cash and working capital decreased to $1.3 million and $6.3 million respectively, primarily due to debt repayments, while total debt decreased to $40.6 million Balance Sheet Overview | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | Change | | :----- | :------------------- | :---------------------- | :----- | | Cash and Cash Equivalents | $1,308,000 | $1,759,000 | -$451,000 | | Working Capital | $6,274,000 | $11,026,000 | -$4,752,000 | | Total Debt | $40,562,000 | $42,090,000 | -$1,528,000 | - The decrease in cash and cash equivalents is primarily due to **debt repayments** in the three months ended March 31, 2025[12](index=12&type=chunk) - Total debt includes a **$3.5 million note payable to a related party**[12](index=12&type=chunk) [About the Company](index=2&type=section&id=About%20the%20Company) This section provides a brief profile of Lendway, Inc., highlighting its focus on specialty agriculture investments and its majority ownership of Bloomia [Company Profile](index=2&type=section&id=Company%20Profile) Lendway, Inc. (Nasdaq: LDWY) is a specialty agriculture company focused on managing ag investments, and is the majority owner of Bloomia, a major U.S. fresh-cut tulip producer - Lendway, Inc. is a **specialty ag company** focused on making and managing its ag investments in the U.S. and internationally[13](index=13&type=chunk) - The Company is the **majority owner of Bloomia**, one of the largest producers of fresh-cut tulips in the United States[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section includes a cautionary statement regarding forward-looking statements, outlining inherent risks and uncertainties that could impact actual results [Cautionary Statement](index=3&type=section&id=Cautionary%20Statement) The press release contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements involve **known and unknown risks, uncertainties, and other factors** that may cause actual results or performance to be materially different[14](index=14&type=chunk) - Factors that could cause actual results to differ materially include the ability to integrate Bloomia, competition, customer concentration, changes in interest rates, compliance with credit agreements, economic conditions, and ability to attract and retain personnel[15](index=15&type=chunk) - The Company assumes **no responsibility to update forward-looking statements**, other than as required by law[15](index=15&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including statements of operations and selected balance sheet data [Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The unaudited condensed consolidated statements of operations show significant profitability improvement for Q1 2025, with net income attributable to Lendway of $449,000 compared to a prior year loss of $1,163,000 Statements of Operations and Comprehensive Income (Loss) | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :----- | :-------------------------------------- | :-------------------------------------- | | Revenue, net | $12,443,000 | $8,033,000 | | Cost of goods sold | $8,554,000 | $6,289,000 | | Gross profit | $3,889,000 | $1,744,000 | | Sales, general and administrative expenses | $2,457,000 | $3,388,000 | | Operating income (loss) | $1,432,000 | $(1,644,000) | | Net income (loss) from continuing operations | $617,000 | $(1,486,000) | | Net income (loss) attributable to Lendway, Inc. | $449,000 | $(1,163,000) | | Basic and diluted earnings per share | $0.25 | $(0.67) | | Shares used in calculation of net income (loss) per share: Basic and diluted | 1,770,000 | 1,743,000 | [Selected Balance Sheet Data](index=5&type=section&id=Selected%20Balance%20Sheet%20Data) Selected balance sheet data as of March 31, 2025, indicates decreased cash and working capital, increased total assets, decreased total debt, and increased stockholders' equity compared to December 31, 2024 Selected Balance Sheet Data | Metric | March 31, 2025 (USD) | December 31, 2024 (USD) | | :----- | :------------------- | :---------------------- | | Cash and cash equivalents | $1,308,000 | $1,759,000 | | Working capital | $6,274,000 | $11,026,000 | | Total assets | $100,514,000 | $99,985,000 | | Total debt | $40,562,000 | $42,090,000 | | Total liabilities | $87,946,000 | $88,091,000 | | Stockholders' equity | $12,568,000 | $11,894,000 | - Working capital represents **current assets less current liabilities**[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Lendway's use of non-GAAP financial measures, specifically Adjusted EBITDA, and provides reconciliations to GAAP measures [Adjusted EBITDA Reconciliation](index=5&type=section&id=Adjusted%20EBITDA%20Reconciliation) Lendway provides Adjusted EBITDA as a non-GAAP measure to offer supplemental information on operating performance, excluding non-recurring items like acquisition costs and non-cash inventory write-offs, for management's evaluation - Adjusted EBITDA is a non-GAAP financial measure provided as **supplemental information**, not a substitute for GAAP measures[19](index=19&type=chunk) - It excludes amounts from discontinued operations, acquisition-related costs, and non-cash step-up inventory write-off to provide a **clearer view of core operating results**[20](index=20&type=chunk) Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :----- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) from continuing operations | $617,000 | $(1,486,000) | | Interest expense, net | $970,000 | $225,000 | | Income tax expense (benefit) | $156,000 | $(347,000) | | Depreciation and amortization | $835,000 | $300,000 | | EBITDA | $2,578,000 | $(1,308,000) | | Acquisition and integration-related costs | $24,000 | $1,542,000 | | Non-cash step-up inventory write-off | — | $1,360,000 | | Severance | $39,000 | — | | Adjusted EBITDA | $2,641,000 | $1,594,000 | [Bloomia Adjusted EBITDA Reconciliation](index=6&type=section&id=Bloomia%20Adjusted%20EBITDA%20Reconciliation) The reconciliation of Bloomia Adjusted EBITDA to total Company Adjusted EBITDA highlights Bloomia's significant contribution, with management excluding Lendway corporate overhead for investment evaluation - Management excludes **Lendway corporate overhead** when evaluating its investment in Bloomia[22](index=22&type=chunk) Bloomia Adjusted EBITDA Reconciliation (Q1 2025) | Metric | Bloomia (Q1 2025) (USD) | Lendway Overhead (Q1 2025) (USD) | Total (Q1 2025) (USD) | | :----- | :---------------------- | :------------------------------- | :-------------------- | | Income (loss) from continuing operations before income taxes | $1,117,000 | $(344,000) | $773,000 | | Depreciation and amortization | $831,000 | $4,000 | $835,000 | | Interest expense, net | $970,000 | — | $970,000 | | EBITDA | $2,918,000 | $(340,000) | $2,578,000 | | Acquisition and integration-related costs | $24,000 | — | $24,000 | | Severance | $39,000 | — | $39,000 | | Adjusted EBITDA | $2,981,000 | $(340,000) | $2,641,000 | Bloomia Adjusted EBITDA Reconciliation (Acquisition to Mar 31, 2024) | Metric | Bloomia (Acquisition to Mar 31, 2024) (USD) | Lendway Overhead (Acquisition to Mar 31, 2024) (USD) | Total (Acquisition to Mar 31, 2024) (USD) | | :----- | :--------------------------------------- | :----------------------------------------------- | :--------------------------------------- | | Loss from continuing operations before income taxes | $(1,347,000) | $(486,000) | $(1,833,000) | | Depreciation and amortization | $296,000 | $4,000 | $300,000 | | Interest expense (income), net | $351,000 | $(126,000) | $225,000 | | EBITDA | $(700,000) | $(608,000) | $(1,308,000) | | Acquisition and integration-related costs | $1,542,000 | — | $1,542,000 | | Non-cash step-up inventory write-off | $1,360,000 | — | $1,360,000 | | Adjusted EBITDA | $2,202,000 | $(608,000) | $1,594,000 |

Exhibit 99.1 Contact: Lendway, Inc. Biz McShane, CFO (763) 392-6200 FOR IMMEDIATE RELEASE LENDWAY, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL RESULTS MINNEAPOLIS, MN – March 27, 2025 – Lendway, Inc. (Nasdaq: LDWY) ("Lendway" or the "Company") today announced its financial results for the fourth quarter and year-ended December 31, 2024 ("Q4"). Overview Fourth quarter fiscal year 2024 Fiscal year 2024 Dan Philp, Lendway's Co-Chief Executive Officer also commented, "The fourth quarter is always ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2024 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: 001-13471 LENDWAY, INC. (Exact name of registrant as specified in its charter) Delaware 41-1656308 (Sta ...

EX-99.1 2 ldwy_ex991.htm PRESS RELEASE Contact: Lendway, Inc. Biz McShane, CFO (763) 392-6200 FOR IMMEDIATE RELEASE LENDWAY, INC. ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS MINNEAPOLIS, MN – November 19, 2024 – Lendway, Inc. (Nasdaq: LDWY) ("Lendway" or the "Company") today announced its financial results for the third quarter ended September 30, 2024 ("Q3"). Overview Third quarter fiscal year 2024 First nine months fiscal year 2024 Lendway's Co-Chief Executive Officer, Mark Jundt commented, "We deliver ...

PART I. FINANCIAL INFORMATION This section presents Lendway, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201%2E%20Financial%20Statements) This section presents Lendway, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, cash flows, and detailed notes on the Bloomia acquisition and prior period revisions [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights | Metric | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :-------------------------------- | :----------------------- | :----------- | | Total Assets | $102,459,000 | $16,673,000 | | Total Current Assets | $20,583,000 | $16,621,000 | | Cash and Cash Equivalents | $1,333,000 | $16,077,000 | | Inventories, net | $15,490,000 | - | | Property and Equipment, net | $11,538,000 | $35,000 | | Goodwill | $10,474,000 | - | | Intangible Assets, net | $25,950,000 | - | | Total Liabilities | $87,194,000 | $1,141,000 | | Total Current Liabilities | $9,063,000 | $1,096,000 | | Long-term Debt, net | $34,610,000 | - | | Total Stockholders' Equity | $15,265,000 | $15,532,000 | - Total assets significantly increased from **$16.673 million** at December 31, 2023, to **$102.459 million** at September 30, 2024, primarily due to the Bloomia acquisition, which introduced substantial inventories, property and equipment, goodwill, and intangible assets[7](index=7&type=chunk)[9](index=9&type=chunk) - Cash and cash equivalents decreased substantially from **$16.077 million** at December 31, 2023, to **$1.333 million** at September 30, 2024, reflecting the cash outflow for the Bloomia acquisition[7](index=7&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's financial performance, including revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Highlights | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue, net | $6,628,000 | $0 | $31,581,000 | $0 | | Gross profit | $1,440,000 | $0 | $7,091,000 | $0 | | Operating loss | $(1,351,000) | $(1,633,000) | $(2,829,000) | $(2,983,000) | | Net loss from continuing operations | $(1,458,000) | $(1,511,000) | $(3,541,000) | $(2,654,000) | | Income (loss) from discontinued operations, net of tax | $66,000 | $(333,000) | $202,000 | $2,422,000 | | Gain from sale of discontinued operations, net of tax | $0 | $2,970,000 | $0 | $2,970,000 | | Net (loss) income attributable to Lendway, Inc. | $(1,125,000) | $1,126,000 | $(2,803,000) | $2,738,000 | | Basic and diluted earnings per share | $(0.64) | $0.63 | $(1.58) | $1.53 | - The Company reported significant revenue of **$6.628 million** for the three months and **$31.581 million** for the nine months ended September 30, 2024, primarily from the Bloomia acquisition, compared to no revenue in the prior year periods[13](index=13&type=chunk) - Net loss attributable to Lendway, Inc. was **$(1.125 million)** for the three months and **$(2.803 million)** for the nine months ended September 30, 2024, a decrease from net income of **$1.126 million** and **$2.738 million** in the respective prior year periods, largely due to the absence of the gain from the sale of discontinued operations and increased operating expenses post-acquisition[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity Highlights | Metric | Dec 31, 2023 | Sep 30, 2024 | | :------------------------------------------ | :----------- | :----------- | | Common Stock (Shares) | 1,743,000 | 1,770,000 | | Common Stock (Amount) | $17,000 | $17,000 | | Additional Paid-In Capital | $16,176,000 | $16,212,000 | | Accumulated Other Comprehensive Income | $0 | $38,000 | | Accumulated Deficit | $(661,000) | $(3,464,000) | | Total Stockholders' Equity attributable to Lendway, Inc. | $15,532,000 | $12,803,000 | | Equity from Noncontrolling Interest | $0 | $2,462,000 | | Total Stockholders' Equity | $15,532,000 | $15,265,000 | - Total stockholders' equity attributable to Lendway, Inc. decreased from **$15.532 million** at December 31, 2023, to **$12.803 million** at September 30, 2024, primarily due to the accumulated deficit increasing from **$(0.661 million)** to **$(3.464 million)**[16](index=16&type=chunk)[17](index=17&type=chunk) - The introduction of a noncontrolling interest of **$2.462 million** at September 30, 2024, reflects the equity issued in the Bloomia acquisition[16](index=16&type=chunk)[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(2,573,000) | $(590,000) | | Net cash (used in) provided by investing activities | $(34,682,000) | $1,533,000 | | Net cash provided by (used in) financing activities | $22,473,000 | $(428,000) | | Net decrease in cash and cash equivalents | $(14,744,000) | $515,000 | | Cash and cash equivalents, end of period | $1,333,000 | $15,039,000 | - Net cash used in operating activities increased to **$(2.573 million)** for the nine months ended September 30, 2024, from **$(0.590 million)** in the prior year, primarily due to increased operational costs post-Bloomia acquisition[19](index=19&type=chunk) - Investing activities saw a significant outflow of **$(34.682 million)** for the nine months ended September 30, 2024, driven by the Bloomia acquisition, contrasting with a net inflow of **$1.533 million** in the prior year from the sale of a business[19](index=19&type=chunk) - Financing activities provided **$22.473 million** in cash for the nine months ended September 30, 2024, mainly from new term loans and revolving debt to fund the Bloomia acquisition[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business and Basis of Presentation](index=7&type=section&id=1%2E%20Description%20of%20Business%20and%20Basis%20of%20Presentation%2E) This note describes Lendway, Inc.'s business, its strategic shift to agriculture, and the basis for financial statement presentation - Lendway, Inc. is a specialty agricultural company, which on February 22, 2024, acquired Bloomia B.V., a significant producer of fresh cut tulips in the U.S., Netherlands, and South Africa, with Bloomia's operations now the Company's primary focus[22](index=22&type=chunk) - The Company discontinued its non-bank lending business development in June 2024 following the resignation of its CEO, who held most of the expertise in that area, with this change not expected to significantly impact operations or financial results[22](index=22&type=chunk) - The In-Store Marketing Business was sold on August 3, 2023, and its operations are presented as discontinued operations in all prior periods[25](index=25&type=chunk) [2. Significant Accounting Policies](index=8&type=section&id=2%2E%20Significant%20Accounting%20Policies%2E) This note outlines the key accounting principles and estimates used in preparing the condensed consolidated financial statements - Key estimates include fair values for the Bloomia acquisition, inventory carrying value, right-of-use assets, lease liabilities, useful lives of property/equipment and intangibles, and income tax valuation[28](index=28&type=chunk) - Revenue is recognized when control of tulips is transferred to the customer, typically upon delivery, with two major customers accounting for approximately **38%** and **19%** of total revenues for the nine months ended September 30, 2024[42](index=42&type=chunk)[44](index=44&type=chunk) - The Company uses the liability method for income taxes, recognizing deferred tax assets and liabilities based on temporary differences and enacted tax rates, applying a valuation allowance when realization of deferred tax assets is not more likely than not[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Bloomia Acquisition](index=12&type=section&id=3%2E%20Bloomia%20Acquisition) This note details the acquisition of Bloomia B.V., including consideration, asset allocation, and its financial impact - On February 22, 2024, Lendway acquired a majority interest (**81.4%**) in Bloomia B.V. for a total consideration of **$53.36 million**[62](index=62&type=chunk)[64](index=64&type=chunk) Bloomia Acquisition Consideration and Allocation | Item | Amount | | :---------------------------------- | :------------- | | 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** | | Net identifiable assets acquired | $42,886,000 | | Goodwill | $10,474,000 | | **Total consideration transferred** | **$53,360,000** | - The acquisition resulted in **$10.474 million** in goodwill, primarily attributed to growth potential, and **$26.87 million** in intangible assets, including tradenames and customer relationships[67](index=67&type=chunk)[68](index=68&type=chunk) - Bloomia contributed **$6.628 million** in revenue and a net loss of **$(0.910 million)** to the consolidated statements of operations for the three months ended September 30, 2024, and **$31.581 million** in revenue and net income of **$1.745 million** for the nine months ended September 30, 2024[69](index=69&type=chunk) [4. Sale of In-Store Marketing Business and Presentation as Discontinued Operations](index=13&type=section&id=4%2E%20Sale%20of%20In-Store%20Marketing%20Business%20and%20Presentation%20as%20Discontinued%20Operations%2E) This note describes the sale of the In-Store Marketing Business and its presentation as discontinued operations - On August 3, 2023, the Company sold its In-Store Marketing Business for **$3.5 million**, with operations presented as discontinued for all periods[71](index=71&type=chunk) Discontinued Operations Financial Summary (Nine Months Ended Sep 30, 2023) | Metric | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :----------------------------- | | Net service revenues | $21,018,000 | | Cost of services | $16,067,000 | | Gross Profit | $4,951,000 | | Operating Income | $2,368,000 | | Income from discontinued operations | $2,422,000 | | Gain from sale of discontinued operations, net of tax | $2,970,000 | - For the nine months ended September 30, 2024, the Company recognized a **$0.202 million** benefit from discontinued operations due to a reduction in sales tax accrual[73](index=73&type=chunk) [5. Inventories](index=14&type=section&id=5%2E%20Inventories%2E) This note provides a breakdown of the company's inventory composition and valuation at the reporting date Inventories Composition (September 30, 2024) | Category | Amount | | :-------------------------- | :------------- | | Raw materials and packaging supplies | $13,686,000 | | Work-in-process | $1,486,000 | | Finished goods | $358,000 | | Total inventories | $15,530,000 | | Less: provision | $(40,000) | | **Inventories, net** | **$15,490,000** | - Raw materials, primarily tulip bulbs, constitute the largest portion of inventories, totaling **$13.686 million** at September 30, 2024[74](index=74&type=chunk) [6. Property and Equipment](index=14&type=section&id=6%2E%20Property%20and%20Equipment%2E) This note details the company's property and equipment, including categories, gross amounts, and accumulated depreciation Property and Equipment, Net (September 30, 2024) | Category | Amount | | :-------------------------- | :------------- | | Machinery and equipment | $11,284,000 | | Vehicles | $576,000 | | Bushes | $489,000 | | Furniture and fixtures | $220,000 | | Leasehold improvements | $113,000 | | Property and equipment, gross | $12,682,000 | | Less: accumulated depreciation | $(1,144,000) | | **Property and equipment, net** | **$11,538,000** | - Depreciation expense for the nine months ended September 30, 2024, was **$1.002 million**, significantly higher than **$36,000** in the prior year, reflecting the assets acquired with Bloomia[77](index=77&type=chunk) [7. Equity Method Investment](index=15&type=section&id=7%2E%20Equity%20Method%20Investment%2E) This note describes the company's equity method investment in Araucanía Flowers SA and other related transactions - The Company holds a **30%** equity interest in Araucanía Flowers SA, a Chilean marketing arm, with a carrying amount of approximately **$167,000** as of September 30, 2024[78](index=78&type=chunk) - Bloomia previously held a **50%** ownership in Horti-Group USA LLC, which was sold on February 9, 2023, with the seller-financed loan for this sale fully repaid by September 30, 2024, with monthly payments applied to rent owed to Horti-Group[79](index=79&type=chunk) [8. Goodwill and Other Intangible Assets](index=15&type=section&id=8%2E%20Goodwill%20and%20Other%20Intangible%20Assets%2E) This note details the company's goodwill and other intangible assets, including their carrying amounts and amortization Goodwill Changes (January 1, 2024 to September 30, 2024) | Item | Amount | | :---------------------------------- | :------------- | | Balance as of January 1, 2024 | $0 | | Goodwill resulting from the Bloomia Acquisition | $10,122,000 | | Measurement period adjustment | $352,000 | | **Balance as of September 30, 2024** | **$10,474,000** | Other Intangible Assets (September 30, 2024) | Asset | Carrying Amount | Useful Life (Years) | Accumulated Amortization | Net Carrying Amount | | :-------------------- | :-------------- | :------------------ | :----------------------- | :------------------ | | Tradename | $8,570,000 | Indefinite | $0 | $8,570,000 | | Customer relationships | $18,300,000 | 12 | $920,000 | $17,380,000 | | **Total** | **$26,870,000** | | **$920,000** | **$25,950,000** | - Amortization expense for intangible assets was **$0.920 million** for the nine months ended September 30, 2024, with a weighted average remaining amortization period of **11.4 years**[83](index=83&type=chunk) [9. Long-term debt, net](index=16&type=section&id=9%2E%20Long-term%20debt%2C%20net%2E) This note provides a breakdown of the company's long-term debt, including term loans, notes payable, and revolving credit facilities Long-term Debt Components (September 30, 2024) | Debt Type | Amount | | :-------------------------------- | :------------- | | Credit Agreement - term loan | $17,550,000 | | Notes payable | $12,750,000 | | Credit Agreement - revolving credit facility | $5,991,000 | | Paid in kind interest (PIK) | $928,000 | | Machinery financing loan | $156,000 | | **Total debt** | **$37,375,000** | | Less: unamortized debt issuance costs | $(334,000) | | Less current maturities | $(2,271,000) | | **Long term debt, net of current maturities** | **$34,610,000** | - The Company entered into a Credit Agreement for an **$18 million** term loan and a **$6 million** revolving credit facility (temporarily increased to **$8 million** in October 2024) to finance the Bloomia acquisition, with borrowings bearing interest at Term SOFR plus **3.0%**[88](index=88&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - Notes payable of **$12.75 million** were issued to sellers as part of the Bloomia acquisition, with a five-year term and initial **8%** PIK interest, increasing annually by **2 percentage points**[89](index=89&type=chunk) - The Company incurred **$0.883 million** in interest expense on term loans and revolving facility, and **$0.928 million** in non-cash paid-in-kind interest on seller notes for the nine months ended September 30, 2024[91](index=91&type=chunk) [10. Related Party Note Payable](index=17&type=section&id=10%2E%20Related%20Party%20Note%20Payable) This note describes the unsecured delayed draw term note with Air T Inc., a related party, for operational funding - On August 15, 2024, the Company entered into an unsecured Delayed Draw Term Note with Air T Inc. (a greater than **10%** beneficial owner) for up to **$2.5 million**, later amended to **$3.5 million**, to fund operations, with **$2 million** outstanding as of September 30, 2024[93](index=93&type=chunk)[94](index=94&type=chunk) - The note bears a fixed interest rate of **8.0%** and matures on August 15, 2029, with Air T having the right to demand payment after February 15, 2026[93](index=93&type=chunk)[94](index=94&type=chunk) [11. Leases](index=17&type=section&id=11%2E%20Leases%2E) This note details the company's lease arrangements, including finance and operating leases, terms, and discount rates Lease Terms and Discount Rates (September 30, 2024) | Lease Type | Weighted Average Remaining Lease Term (Years) | Weighted Average Discount Rate Applied | | :---------------- | :------------------------------------------ | :----------------------------------- | | Finance leases | 4.31 | 5.40% | | Operating leases | 14.11 | 8.22% | Total Lease Expense from Continuing Operations | Period | Total Lease Expense | | :-------------------------------- | :-------------------- | | Three Months Ended Sep 30, 2024 | $1,136,000 | | Nine Months Ended Sep 30, 2024 | $2,853,000 | | Three Months Ended Sep 30, 2023 | $6,000 | | Nine Months Ended Sep 30, 2023 | $15,000 | - Leased assets obtained in exchange for operating lease liabilities totaled **$34.289 million** for the nine months ended September 30, 2024, reflecting significant new lease commitments[98](index=98&type=chunk) [12. Income Taxes](index=19&type=section&id=12%2E%20Income%20Taxes%2E) This note explains the company's income tax provisions, including deferred tax assets, liabilities, and effective tax rates - For the nine months ended September 30, 2024, the Company recorded an income tax benefit of **$1.284 million** on loss from continuing operations, with an effective tax rate of **26.6%**, including a **$0.451 million** benefit from the reversal of the valuation allowance on federal deferred tax assets due to deferred tax liabilities established from the Bloomia acquisition[101](index=101&type=chunk)[102](index=102&type=chunk) - Unrecognized tax benefits related to state nexus issues totaled **$35,000** as of September 30, 2024[103](index=103&type=chunk) [13. Commitments and Contingencies](index=19&type=section&id=13%2E%20Commitments%20and%20Contingencies%2E) This note outlines the company's significant contractual commitments and potential legal contingencies - The Company has a purchase obligation to buy **25%** of a third-party's annual tulip bulb production through 2028 for **$1.65 million** annually, totaling **$8 million** over the agreement's duration[106](index=106&type=chunk) - As of September 30, 2024, management believes there are no material claims or legal actions that would have a material adverse effect on the Company's financial position, results of operations, or liquidity[105](index=105&type=chunk) [14. Employee Benefit Plans](index=19&type=section&id=14%2E%20Employee%20Benefit%20Plans%2E) This note describes the company's employee benefit plans, including contributions to defined contribution pension plans - The Company participates in defined contribution pension plans for its Dutch employees, contributing and expensing **$51,000** for the nine months ended September 30, 2024[109](index=109&type=chunk) [15. Revision of first and second quarter 2024 unaudited results](index=19&type=section&id=15%2E%20Revision%20of%20first%20and%20second%20quarter%202024%20unaudited%20results%3A) This note explains the revisions made to previously reported unaudited financial results for the first and second quarters of 2024 - The Company identified and revised certain immaterial misstatements in its Q1 and Q2 2024 unaudited consolidated financial statements to facilitate period comparisons[111](index=111&type=chunk) - Revisions included adjustments for unrecorded non-cash rent expense in Q1, timing issues for revenue and cost of goods sold in Q2, an overstated inventory balance in Q2, and over-accrued selling, general, and administrative expenses in Q2[112](index=112&type=chunk)[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Lendway, Inc.'s financial condition and operations, focusing on the strategic shift to agriculture post-Bloomia acquisition, financial performance, liquidity, capital resources, and critical accounting estimates [Company Overview](index=21&type=section&id=Company%20Overview) This section provides an overview of Lendway, Inc.'s strategic transformation into a specialty agricultural company - Lendway, Inc. has transitioned to a specialty agricultural company, focusing on its investment in Bloomia B.V., a fresh-cut tulip producer, after selling its In-Store Marketing Business in August 2023[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - The Company ceased development of its non-bank lending business in June 2024 due to the departure of its CEO, who possessed critical expertise in this area, and a strategic decision to reallocate capital to the ag business[119](index=119&type=chunk) [Bloomia Business](index=21&type=section&id=Bloomia%20Business) This section describes Bloomia B.V.'s operations as a leading fresh-cut tulip producer and its seasonal business nature - Bloomia is a leading U.S. producer of fresh-cut tulips, growing over **75 million** stems annually, with operations in the United States, Netherlands, South Africa, and Chile, and strong relationships with mass market retailers[120](index=120&type=chunk) - The acquisition of Bloomia for **$53.36 million** was funded by cash, seller bridge loans, and equity issued to noncontrolling interests[121](index=121&type=chunk) - The tulip sales business is seasonal, with the first and second calendar quarters being the strongest sales periods, leading to lowest accounts receivable and inventory balances in summer and peak inventory prior to spring[122](index=122&type=chunk) [Former Lending Business](index=22&type=section&id=Former%20Lending%20Business) This section details the discontinuation of the company's non-bank lending business due to a strategic shift and CEO departure - The Company's non-bank lending business, previously under development, was discontinued after the CEO's resignation in June 2024, as his expertise was central to the venture[124](index=124&type=chunk) - This strategic shift is not anticipated to have a significant adverse impact on the Company's operations or financial results, as the lending business was still in its development phase[124](index=124&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and net income or loss for the reporting periods Key Financial Performance Metrics (Continuing Operations) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue, net | $6,628,000 | $0 | $31,581,000 | $0 | | Gross profit | $1,440,000 | $0 | $7,091,000 | $0 | | Gross profit as a percent of sales | 22% | NA | 22% | NA | | Sales, general and administrative expenses | $2,791,000 | $1,633,000 | $9,920,000 | $2,983,000 | | Operating loss | $(1,351,000) | $(1,633,000) | $(2,829,000) | $(2,983,000) | | Interest expense (income), net | $800,000 | $(111,000) | $1,989,000 | $(325,000) | | Net loss from continuing operations | $(1,458,000) | $(1,511,000) | $(3,541,000) | $(2,654,000) | | Net (loss) income attributable to Lendway, Inc. | $(1,125,000) | $1,126,000 | $(2,803,000) | $2,738,000 | - Revenue for the three and nine months ended September 30, 2024, was **$6.628 million** and **$31.581 million**, respectively, entirely from Bloomia post-acquisition, with gross profit margins at **22%**[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Sales, general and administrative expenses increased significantly to **$2.791 million** (three months) and **$9.920 million** (nine months) in 2024, primarily due to the Bloomia acquisition and related one-time costs[130](index=130&type=chunk)[131](index=131&type=chunk) - Interest expense surged to **$0.800 million** (three months) and **$1.989 million** (nine months) in 2024, compared to interest income in 2023, due to debt incurred for the Bloomia acquisition[132](index=132&type=chunk)[133](index=133&type=chunk) - The Company recorded an income tax benefit of **$0.736 million** (three months) and **$1.284 million** (nine months) in 2024, driven by deferred tax liabilities from the Bloomia acquisition enabling the realization of federal deferred tax assets[134](index=134&type=chunk)[135](index=135&type=chunk) - Income from discontinued operations for the nine months ended September 30, 2024, was **$0.202 million**, resulting from a reduction in sales tax accrual, contrasting with **$5.392 million** in 2023 which included the gain from the sale of the In-Store Marketing Business[137](index=137&type=chunk) [Non-GAAP Financial Measures](index=23&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures like EBITDA to evaluate operational performance - EBITDA is presented as a non-GAAP financial measure to evaluate financial performance, measure operational profitability, and assess compliance with credit agreement covenants[139](index=139&type=chunk)[140](index=140&type=chunk) EBITDA Reconciliation to Net Loss from Continuing Operations | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net loss from continuing operations | $(1,458,000) | $(1,511,000) | $(3,541,000) | $(2,654,000) | | Interest expense (income), net | $800,000 | $(111,000) | $1,989,000 | $(325,000) | | Income tax benefit | $(736,000) | $(11,000) | $(1,284,000) | $(4,000) | | Depreciation and amortization | $820,000 | $10,000 | $1,928,000 | $36,000 | | **EBITDA** | **$(574,000)** | **$(1,623,000)** | **$(908,000)** | **$(2,947,000)** | [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, debt financing, and ability to meet its financial obligations - Working capital decreased from **$15.525 million** at December 31, 2023, to **$11.520 million** at September 30, 2024, while cash and cash equivalents decreased by **$14.744 million** to **$1.333 million**[143](index=143&type=chunk) - The Bloomia acquisition was funded by **$34.919 million** cash, **$15.451 million** seller bridge loans, and **$2.990 million** in equity issued to noncontrolling interest[147](index=147&type=chunk) - The Company secured an **$18 million** term loan and a **$6 million** revolving credit facility (increased to **$8 million** in October 2024) to finance the Bloomia acquisition, with the term loan repayable in quarterly installments of **$0.450 million**[148](index=148&type=chunk)[151](index=151&type=chunk) - The Company expects current cash, credit facility, and related party note to provide sufficient liquidity for the next **12 months** and was in compliance with financial covenants as of September 30, 2024[155](index=155&type=chunk)[159](index=159&type=chunk) [Critical Accounting Estimates](index=25&type=section&id=Critical%20Accounting%20Estimates) This section highlights the significant judgments and estimates used in the company's financial reporting - Critical accounting estimates include business combinations (fair value of acquired assets/liabilities, goodwill), inventory valuation, impairment testing for goodwill and long-lived assets, interest expense for variable rate debt, and income taxes (deferred taxes, valuation allowances, uncertain tax positions)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[168](index=168&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Fair value measurements for business combinations involve significant judgment and estimates, including future cash flows, discount rates, and royalty rates, with allocations subject to adjustment during the measurement period[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually or when conditions indicate, using qualitative or quantitative assessments involving discounted cash flow models and market multiples[169](index=169&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=27&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section warns about the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements regarding liquidity, capital resources, and business growth, which are subject to known and unknown risks and uncertainties[180](index=180&type=chunk) - Key risk factors include the ability to integrate Bloomia, competition, customer concentration, interest rate changes, compliance with debt covenants, reliance on key personnel, and the availability of additional capital[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Lendway, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The Company is exempt from providing market risk disclosures as it qualifies as a smaller reporting company[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204%2E%20Controls%20and%20Procedures) This section details the evaluation of Lendway, Inc.'s disclosure controls and procedures, confirming their effectiveness and addressing material changes in internal control over financial reporting due to the Bloomia acquisition - Management, including the principal executive and financial officers, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024[185](index=185&type=chunk) - The Bloomia acquisition represents a material change in internal control over financial reporting, with ongoing integration efforts to incorporate controls into the acquired subsidiaries and augment company-wide controls[186](index=186&type=chunk) PART II. OTHER INFORMATION This section provides additional information not included in the financial statements, covering legal, risk, equity, and control matters [Item 1. Legal Proceedings](index=28&type=section&id=Item%201%2E%20Legal%20Proceedings) This section refers to Note 12 for legal proceedings, noting management's belief that no material claims or actions adversely affect the Company - Legal proceedings information is incorporated by reference from Note 12 of the condensed consolidated financial statements[189](index=189&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A%2E%20Risk%20Factors) This section updates risk factors, emphasizing reliance on key personnel and challenges in maintaining effective internal control over financial reporting post-Bloomia acquisition - The Company's success is highly dependent on its key personnel, specifically Bloomia's CEO, Werner Jansen, and the loss of such personnel could adversely affect business and financial results[191](index=191&type=chunk) - Challenges in establishing and maintaining effective internal control over financial reporting, exacerbated by the Bloomia acquisition and limited employee resources, pose a risk to financial reporting accuracy and market price of common stock[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - The Company intends to exclude Bloomia from its internal control over financial reporting evaluation for one year post-acquisition, as permitted by SOX[194](index=194&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no share repurchase activity for the three months ended September 30, 2024, with 315,792 shares remaining authorized - No share repurchase activity occurred for the three months ended September 30, 2024[196](index=196&type=chunk) - As of September 30, 2024, **315,792 shares** remained available for repurchase under the existing authorization[196](index=196&type=chunk) [Item 3. Defaults upon Senior Securities](index=29&type=section&id=Item%203%2E%20Defaults%20upon%20Senior%20Securities) The Company reported no defaults upon senior securities for the period - There were no defaults upon senior securities[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This item is not applicable to Lendway, Inc - Mine Safety Disclosures are not applicable to the Company[198](index=198&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205%2E%20Other%20Information) No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024 - No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[199](index=199&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206%2E%20Exhibits) This section lists exhibits filed as part of the Form 10-Q, including key agreements, corporate documents, certifications, and XBRL data - Exhibits include the Asset Purchase Agreement, Agreement for the Sale and Purchase of Shares, Certificate of Incorporation, Bylaws, Section 302 and 1350 Certifications, and XBRL formatted financial statements[201](index=201&type=chunk)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q Delaware 41-1656308 for the quarterly period ended June 30, 2024 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: 1-13471 LENDWAY, INC. (Exact name of registrant as specified in its charter) (State or other juri ...