Insignia(LDWY) - 2024 Q4 - Annual Report

PART I. Business and Risk Factors This section details Lendway, Inc.'s strategic shift to a specialty agricultural company, focusing on its Bloomia acquisition, and outlines various competitive, economic, and operational risks Business Overview Lendway, Inc. transformed into a specialty agricultural company, acquiring Bloomia, a leading U.S. fresh-cut tulip producer, and divesting its legacy businesses to focus on the agricultural sector - Lendway, Inc. changed its name from "Insignia Systems, Inc." effective August 4, 2023, and its common stock now trades under the symbol "LDWY" on The Nasdaq Stock Market LLC[10] - The Company has evolved into a specialty agricultural ("ag") company, focusing on making and managing ag investments in the U.S. and internationally[11] - On February 22, 2024, Lendway acquired Bloomia B.V., a significant producer of fresh cut tulips in the U.S., nurturing over 75 million stems annually. The acquisition was for $47.5 million, financed with company cash, a new credit facility, promissory notes, and an equity interest[12][16] - The Company sold its legacy In-Store Marketing Business for $3,500,000 and discontinued its non-bank lending business to focus solely on the ag business[12][13][14] - Bloomia operates from three strategically positioned locations: the United States, the Netherlands, and South Africa, and holds a 30% interest in a greenhouse business in Chile[18] - Bloomia nurtured over 95 million tulip stems in 2024, a 25% increase over the prior year, sourcing approximately 80% of bulbs from the Netherlands and 20% from the Southern Hemisphere[18][28] - Bloomia's business model of shipping bulbs for local production significantly lowers its carbon footprint compared to importers who air ship stems[34] Bloomia's U.S. Revenue Concentration (FY2024) | Customer Type | % of U.S. Revenue | | :-------------- | :------------------ | | Customer 1 | 34% | | Customer 2 | 20% | | Customer 3 | 11% | U.S. Cut Flower Market (2024 Estimates) | Metric | Value | | :---------------------- | :---------------- | | Total Market Size | ~$8 billion | | Imported Share | ~80% | | U.S. Produced Share | ~20% | | Tulip Stems Share | ~15% of total | | Bloomia's Tulip Market Share (U.S. grown) | ~20% | Risk Factors The company faces significant risks including intense competition, high customer concentration, economic volatility, dependence on Bloomia's success, operational complexities, and cybersecurity threats - Bloomia's revenue is highly concentrated, with three customers accounting for approximately 65% of its revenue in calendar 2024, posing a significant risk if one or more reduce purchases[44] - The majority of the Company's debt carries floating interest rates (Term SOFR + 3.0%), making it vulnerable to interest rate fluctuations[46] - The Company's cash flow and ability to service debt are highly dependent on Bloomia's performance due to substantial capital committed to its acquisition and growth[49] - The Credit Agreement restricts Tulp 24.1's ability to make distributions to Lendway, potentially constraining cash available for corporate expenses and future acquisitions[57] - The Company's success is highly dependent on Bloomia's CEO, Werner Jansen, and the loss of key management could adversely affect business strategy and financial results[58] - Bloomia's international operations (South Africa, Chile, Netherlands) expose the Company to risks such as foreign currency fluctuations, adverse tax consequences, and compliance with diverse foreign laws[62][63] - The agricultural business is subject to inherent risks like insects, plant diseases, and quality issues; in June 2023, Bloomia wrote off $900,000 of tulip bulb inventory due to quality problems[68][70] - Significant stockholders, particularly Air T Inc. and its affiliates, collectively own approximately 40% of outstanding common shares, potentially exerting control over matters requiring stockholder approval[82][143] Unresolved Staff Comments As a smaller reporting company, Lendway, Inc. is not required to provide disclosure regarding unresolved staff comments Cybersecurity Lendway manages cybersecurity through outsourced IT services, conducting annual vulnerability scans and employee training, with Board oversight, and identified no material threats as of December 31, 2024 - Lendway's cyber environment primarily consists of outsourced IT operations, with providers implementing a cybersecurity framework including multiple products[88] - Annual internal and external vulnerability scans are completed, and regular phishing exercises and employee awareness training are conducted by the outsourced provider[89] - The full Board of Directors and the Audit Committee provide oversight of the risk management program, including cybersecurity and monitoring third-party IT providers[91] - As of December 31, 2024, no cybersecurity threats that materially affected or are reasonably likely to materially affect the Company were identified[92] Properties Lendway leases its corporate headquarters in Minneapolis and its primary greenhouse facility in King George, Virginia, along with international office and greenhouse spaces in the Netherlands and South Africa - The Company leases 1,700 square feet for its corporate headquarters in Minneapolis, Minnesota through September 30, 2025[94] - Fresh Tulips USA, LLC leases a 360,000 square foot greenhouse facility in King George, Virginia through 2028[94] - Bloomia leases a 107,000 square foot office and warehouse space in the Netherlands through 2027 and operates a 21,000 square foot greenhouse in South Africa through 2028[94] Legal Proceedings Lendway's legal proceedings are detailed in Note 14 to the financial statements, with no material claims identified as of December 31, 2024, that would adversely affect its financial position - A description of legal proceedings is contained in Note 14 to the consolidated financial statements[95] - As of December 31, 2024, the Company was not involved in any material claims or legal actions which, in the opinion of management, the ultimate disposition would have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity[278] Mine Safety Disclosures This item is not applicable to Lendway, Inc. PART II. Financial Information This section provides an overview of Lendway's financial performance, market information, management's discussion and analysis, and the consolidated financial statements Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Lendway's common stock trades on Nasdaq under LDWY, with approximately 122 record holders, no regular dividends, and an active stock repurchase authorization - The Company's common stock is listed on the Nasdaq Capital Market under the symbol LDWY[99] - As of March 21, 2025, there were approximately 122 holders of record for the common stock[100] - The Company has not historically paid dividends, other than two one-time special dividends in 2011 and 2016[101] - A stock repurchase authorization for up to 400,000 shares was approved on August 28, 2023; as of December 31, 2024, 315,792 shares remained available for repurchase[102] Item 6. [Reserved] This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Lendway's financial performance in 2024 reflects its transformation into an agricultural company, with significant Bloomia revenue, a net loss from acquisition costs and increased expenses, and reduced liquidity - The Company acquired majority ownership in Bloomia on February 22, 2024, for a total consideration of $53,360,000, funded by cash, seller bridge loans, and equity issued as noncontrolling interest[107][132] - The Company sold its In-Store Marketing Business in August 2023 for $3,500,000 and discontinued its non-bank lending business to focus solely on the ag business[109][110] Consolidated Statements of Operations Highlights (Year Ended December 31) | Metric | 2024 ($000) | 2023 ($000) | Change ($000) | Change (%) | | :----------------------------------------- | :---------- | :---------- | :------------ | :--------- | | Revenue, net | 37,773 | — | 37,773 | — | | Cost of goods sold | 31,264 | — | 31,264 | — | | Gross profit | 6,509 | — | 6,509 | — | | Gross profit as a percent of revenue | 17.2% | NA | | | | Sales, general and administrative expenses | 13,226 | 3,519 | 9,707 | 276 | | Operating loss | (6,717) | (3,519) | (3,198) | 91 | | Interest expense (income), net | 2,969 | (518) | 3,487 | NA | | Net loss from continuing operations | (6,901) | (3,021) | (3,880) | 128 | | Income from discontinued operations, net of tax | 224 | 5,435 | (5,211) | (96) | | Net (loss) income attributable to Lendway, Inc. | (5,743) | 2,414 | (8,157) | (338) | - Sales, general and administrative expenses increased by $9,707,000 (276%) in 2024, primarily due to the Bloomia acquisition, including $1,542,000 in acquisition costs and $1,335,000 in integration-related costs[117] - Interest expense, net, was $2,969,000 in 2024, compared to interest income of $518,000 in 2023, due to new debt incurred for the Bloomia acquisition[118] EBITDA Reconciliation (Year Ended December 31) | Metric | 2024 ($000) | 2023 ($000) | | :----------------------------------- | :---------- | :---------- | | Net loss from continuing operations | (6,901) | (3,021) | | Interest expense (income), net | 2,969 | (518) | | Income tax (benefit) expense | (2,329) | 20 | | Depreciation and amortization | 2,641 | 7 | | EBITDA | (3,620) | (3,512) | - Working capital decreased from $15,525,000 at December 31, 2023, to $11,026,000 at December 31, 2024. Cash and cash equivalents decreased by $14,318,000 to $1,759,000[128] - Net cash used in operating activities was $4,120,000 in 2024, primarily due to $12,200,000 used to purchase tulip bulbs[129] - Net cash used in investing activities was $35,148,000 in 2024, mainly for the Bloomia acquisition[130] - Net cash provided by financing activities was $24,882,000 in 2024, primarily from the Credit Agreement for the Bloomia acquisition, including an $18,000,000 term loan and a $6,000,000 revolving credit facility (temporarily increased to $8,000,000)[131][133] - The Company also entered into a related party unsecured Delayed Draw Term Note with Air T Inc. for up to $3,500,000 (increased to $3,750,000 in January 2025) to fund operations[141][142] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Lendway, Inc. is not required to provide quantitative and qualitative disclosures about market risk Financial Statements and Supplementary Data This section presents Lendway's audited consolidated financial statements for 2024 and 2023, reflecting the Bloomia acquisition and discontinued operations, along with key accounting policies and detailed financial notes - The consolidated financial statements include all wholly and majority-owned subsidiaries, with Bloomia's operations included since its acquisition date of February 22, 2024[191] - The In-Store Marketing Business operations are presented as discontinued operations for all periods presented, following its sale on August 3, 2023[194] Consolidated Balance Sheet Highlights (As of December 31) | Metric | 2024 ($000) | 2023 ($000) | | :--------------------------- | :---------- | :---------- | | Total current assets | 18,838 | 16,621 | | Total assets | 99,985 | 16,673 | | Total current liabilities | 7,812 | 1,096 | | Total Long-term liabilities | 80,279 | 45 | | Total Stockholders' equity | 11,894 | 15,532 | Consolidated Statements of Cash Flows Highlights (Year Ended December 31) | Metric | 2024 ($000) | 2023 ($000) | | :---------------------------------------------- | :---------- | :---------- | | Net cash used in operating activities | (4,052) | 518 | | Net cash (used in) provided by investing activities | (35,148) | 1,508 | | Net cash provided by (used in) financing activities | 24,882 | (473) | | Net (decrease) increase in cash and cash equivalents | (14,318) | 1,553 | | Cash and cash equivalents, end of period | 1,759 | 16,077 | - The preliminary allocation of the Bloomia acquisition purchase price of $53,360,000 included $10,888,000 in goodwill and $26,870,000 in intangible assets (trade name and customer relationships)[234] - For the year ended December 31, 2024, Bloomia contributed $37,773,000 in revenue and a net loss before taxes of approximately $5,022,000 to the consolidated statements[235] - Total long-term debt, net, increased significantly to $36,608,000 at December 31, 2024, from zero in 2023, primarily due to the Credit Agreement and seller notes for the Bloomia acquisition[181][248] - The Company recorded an income tax benefit of $2,329,000 in 2024, with an effective tax rate of 25.2%, compared to an expense of $20,000 in 2023[119][271][272] Report of Independent Registered Public Accounting Firm Boulay PLLP issued an unqualified opinion on Lendway's 2024 and 2023 consolidated financial statements, identifying the valuation of acquired intangible and long-lived assets as a critical audit matter - Boulay PLLP audited the consolidated financial statements for Lendway, Inc. for the years ended December 31, 2024 and 2023, issuing an unqualified opinion that the statements present fairly, in all material respects, the financial position and results of operations in conformity with GAAP[171][172] - A critical audit matter identified was the valuation of acquired intangible and certain long-lived assets in the Bloomia acquisition, due to significant judgment required in determining estimated fair values[177] Consolidated Balance Sheets This section presents Lendway's consolidated balance sheets, detailing assets, liabilities, and equity as of December 31, 2024, and 2023, reflecting the impact of the Bloomia acquisition Consolidated Balance Sheet (As of December 31) | Assets/Liabilities/Equity | 2024 ($000) | 2023 ($000) | | :------------------------ | :---------- | :---------- | | Cash and cash equivalents | 1,759 | 16,077 | | Inventories | 13,370 | — | | Property and equipment, net | 11,316 | 35 | | Goodwill | 10,705 | — | | Intangible assets, net | 25,568 | — | | Operating lease right-of-use assets | 32,942 | 7 | | Total assets | 99,985 | 16,673 | | Accounts payable | 3,019 | 32 | | Long-term debt, net | 36,608 | — | | Related party note payable | 3,569 | — | | Deferred tax liabilities, net | 7,642 | — | | Total Long-term liabilities | 80,279 | 45 | | Total Stockholders' equity | 11,894 | 15,532 | Consolidated Statements of Operations and Comprehensive Income (Loss) This section provides Lendway's consolidated statements of operations and comprehensive income (loss) for 2024 and 2023, highlighting revenue, expenses, and net income (loss) from continuing and discontinued operations Consolidated Statements of Operations and Comprehensive Income (Loss) (Year Ended December 31) | Metric | 2024 ($000) | 2023 ($000) | | :----------------------------------------- | :---------- | :---------- | | Revenue, net | 37,773 | — | | Cost of goods sold | 31,264 | — | | Gross profit | 6,509 | — | | Sales, general and administrative expenses | 13,226 | 3,519 | | Operating loss | (6,717) | (3,519) | | Interest expense (income), net | 2,969 | (518) | | Net loss from continuing operations | (6,901) | (3,021) | | Income from discontinued operations, net of tax | 224 | 2,474 | | Gain from sale of discontinued operations, net of tax | — | 2,961 | | Net (loss) income including noncontrolling interest | (6,677) | 2,414 | | Net (loss) income attributable to Lendway, Inc. | (5,743) | 2,414 | | Basic and diluted earnings per share | (3.24) | 1.36 | Consolidated Statements of Stockholders' Equity This section details changes in Lendway's stockholders' equity for 2024 and 2023, including the impact of noncontrolling interests, stock-based compensation, and net income (loss) Consolidated Statements of Stockholders' Equity (Year Ended December 31) | Metric | 2024 ($000) | 2023 ($000) | | :----------------------------------------- | :---------- | :---------- | | Balance at December 31, 2023 | 15,532 | 13,401 | | Issuance of noncontrolling interests in acquisition | 2,990 | — | | Value of stock based compensation | 60 | 44 | | Net loss | (6,677) | 2,414 | | Other comprehensive loss | (11) | — | | Balance at December 31, 2024 | 11,894 | 15,532 | Consolidated Statements of Cash Flows This section presents Lendway's consolidated statements of cash flows for 2024 and 2023, categorizing cash movements from operating, investing, and financing activities Consolidated Statements of Cash Flows (Year Ended December 31) | Activity | 2024 ($000) | 2023 ($000) | | :------------------------------------------------ | :---------- | :---------- | | Net cash used in operating activities of continuing operations | (4,120) | (2,905) | | Net cash provided by operating activities of discontinued operations | 68 | 3,423 | | Net cash (used in) provided by operating activities | (4,052) | 518 | | Net cash (used in) provided by investing activities of continuing operations | (35,148) | 1,532 | | Net cash used in investing activities of discontinued operations | — | (24) | | Net cash (used in) provided by investing activities | (35,148) | 1,508 | | Net cash provided by (used in) financing activities | 24,882 | (473) | | Net (decrease) increase in cash and cash equivalents | (14,318) | 1,553 | | Cash and cash equivalents, end of period | 1,759 | 16,077 | Notes to Consolidated Financial Statements This section provides detailed notes to Lendway's consolidated financial statements, covering significant accounting policies, the Bloomia acquisition, debt, and other financial disclosures - The Company's Board of Directors approved a change in the fiscal year end from December 31 to June 30, effective July 1, 2025, requiring a transition report for the six-month period ending June 30, 2025[8] - The Company adopted ASU 2023-07 (Segment Reporting) as of January 1, 2024, determining it has one reporting segment focused on tulips, with over 95% of sales in the U.S.[197] - The total consideration for the Bloomia acquisition was $53,360,000, comprising $34,919,000 cash, $15,451,000 seller bridge loans, and $2,990,000 equity issued as noncontrolling interest (18.6% ownership)[232][234] - Goodwill recognized from the Bloomia acquisition was $10,888,000, primarily attributable to growth potential and not deductible for tax purposes[234] - Other intangible assets from the Bloomia acquisition include a tradename ($8,570,000, indefinite life) and customer relationships ($18,300,000, 12-year useful life)[247] - The Company's long-term debt, net, totaled $36,608,000 at December 31, 2024, including an $18,000,000 term loan, $7,961,000 revolving credit facility, and $12,750,000 in seller notes[248] - A related party note payable with Air T Inc. (a significant stockholder) for up to $3,500,000 (later increased to $3,750,000) was outstanding at December 31, 2024, bearing 8.0% fixed interest[264][265] - The Company had a Federal pre-tax net operating loss (NOL) carryforward of approximately $8,110,000 and state NOLs of $7,185,000 as of December 31, 2024[273] - A purchase obligation exists to buy 25% of a third-party's annual tulip bulb production through 2028 for $1,650,000 annually, totaling $8,000,000[279] Changes in and Disagreements With Accountants on Accounting and Financial Disclosures Lendway dismissed Baker Tilly US, LLP and appointed Boulay PLLP as its independent auditor on November 20, 2023, with no disagreements or reportable events noted - On November 20, 2023, Baker Tilly US, LLP was dismissed as the Company's independent registered public accounting firm[282] - Boulay PLLP was appointed as the new independent registered public accounting firm to audit the consolidated financial statements for the fiscal year ending December 31, 2023[282] - There were no disagreements with Baker Tilly on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, and no 'reportable event' occurred[283] Controls and Procedures Lendway's management concluded its disclosure controls and internal control over financial reporting were effective as of December 31, 2024, excluding the newly acquired Bloomia business - The Company's co-principal executive officers and principal accounting and finance officer concluded that disclosure controls and procedures were effective as of December 31, 2024[285] - Management believes its internal control over financial reporting was effective as of December 31, 2024, based on the 2013 COSO framework[286] - The acquired Bloomia business was excluded from management's assessment of internal control over financial reporting for the first year post-acquisition, as permitted by SEC guidelines[287] - The Bloomia acquisition represents a material change in internal control, leading to the adoption of new controls related to impairment of long-lived assets and determination of weighted-average interest rates[289] Other Information No director or officer of Lendway, Inc. adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended December 31, 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 December 31, 2024[290] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to Lendway, Inc. PART III. Directors, Executive Officers, and Compensation This section outlines Lendway's executive leadership, Board of Directors, corporate governance practices, and details executive and director compensation for the fiscal year Directors, Executive Officers and Corporate Governance Lendway's leadership includes Co-CEOs Mark R. Jundt and Daniel C. Philp, CFO Elizabeth E. McShane, and Bloomia CEO Werner F. Jansen, with a majority-independent Board providing governance oversight Executive Officers as of Form 10-K Filing Date | Name | Age | Position | | :---------------- | :-- | :------------------------------------- | | Mark R. Jundt | 44 | Co-Chief Executive Officer | | Daniel C. Philp | 40 | Co-Chief Executive Officer | | Elizabeth E. McShane | 47 | Chief Financial Officer, Treasurer and Secretary | | Werner F. Jansen | 34 | Chief Executive Officer of Bloomia B.V. | Directors as of Form 10-K Filing Date | Director & Nominee | Age | Position | Director Since | | :----------------- | :-- | :----------------------------------------- | :------------- | | Mark R. Jundt | 44 | Director, Chairman of the Board and Co-Chief Executive Officer | 2022 | | Mary H. Herfurth | 63 | Director | 2023 | | Chad B. Johnson | 54 | Director | 2020 | | Matthew R. Kelly | 49 | Director | 2023 | | Daniel C. Philp | 40 | Director and Co-Chief Executive Officer | 2022 | | Nicholas J. Swenson | 56 | Director | 2021 | - The Board has determined that Mary H. Herfurth qualifies as an 'audit committee financial expert' based on her experience as a bank regulator and credit evaluator[309] - The Audit Committee provides independent oversight of financial reporting, reviews audits, evaluates internal controls, and is solely responsible for appointing and compensating independent auditors[310][311] - The Company has a Code of Ethics applicable to senior financial management and an insider trading policy governing securities transactions by directors, officers, and employees[312][313] - A majority of the Board members (Mary Herfurth, Chad Johnson, Matthew Kelly, and Nick Swenson) are considered 'independent directors' as defined by Nasdaq Rules[361] Executive Compensation Executive compensation for 2024 included base salaries, cash bonuses, and stock awards, with Bloomia's CEO receiving the highest salary, and non-employee directors receiving cash retainers Summary Compensation Table (Year 2024) | Name and Position | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :--------- | :-------- | :--------------- | :------------------------- | :-------- | | Mark R. Jundt, Co-CEO | 53,462 | 50,000 | - | 22,173 | 125,635 | | Daniel C. Philp, Co-CEO | 53,462 | - | 152,280 | 17,750 | 223,492 | | Elizabeth E. McShane, CFO | 134,135 | 66,399 | - | 2,383 | 202,917 | | Werner F. Jansen, CEO Bloomia | 521,284 | - | - | 2,637 | 523,921 | | Randy D. Uglem, Former CEO | 111,923 | 146,250 | - | 17,878 | 276,051 | | Zackery A. Weber, Former VP Finance | 71,385 | 218,000 | - | 84,341 | 373,725 | - Mr. Jundt received a $50,000 cash payment for extraordinary contributions to the Bloomia Acquisition[323] - Mr. Philp was awarded a restricted stock award of $152,280 related to his role in acquiring Bloomia[322] - Ms. McShane's employment agreement provides an initial base salary of $225,000 and eligibility for discretionary quarterly cash incentives[330] - Former VP of Finance, Mr. Weber, received a $150,000 retention bonus in April 2024 and a $80,000 severance payment upon his departure[328][334] Non-Employee Director Compensation (Fiscal Year 2024) | Name | Fees Earned or Paid Cash ($) | | :---------------- | :--------------------------- | | Mary H. Herfurth | 22,000 | | Chad B. Johnson | 17,000 | | Mark R. Jundt | 22,000 | | Matthew R. Kelly | 17,000 | | Daniel C. Philp | 17,000 | | Nicholas J. Swenson | 22,000 | - Non-employee directors receive an annual cash retainer of $17,000, with an additional $5,000 for the Chairman of the Board and Committee Chairs[339] - Directors are eligible to participate in a deferred compensation plan, allowing deferrals of cash retainers into common stock equivalents[340] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of Lendway's common stock, highlighting Air T Inc. and its affiliates as a significant stockholder group with approximately 39.6% ownership Equity Compensation Plan Information (As of December 31, 2024) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans | | :------------------------------------------ | :-------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------- | | Equity Compensation plans approved by security holders | - | $ - | 102,521 | | Equity Compensation plans not approved by security holders | - | - | - | | Total | - | $ - | 102,521 | - As of December 31, 2024, 22,945 shares were reserved for future employee purchases under the Employee Stock Purchase Plan, and 77,138 shares were available for future awards under the 2018 Plan[349] Security Ownership of Certain Beneficial Owners and Management (As of March 21, 2025) | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Shares | | :----------------------------------- | :---------------------------------------- | :---------------- | | Daniel C. Philp | 59,071 | 3.3% | | Nicholas J. Swenson | 214,456 | 12.1% | | All directors and current executive officers as a group (8 persons) | 280,527 | 15.9% | | Air T. Inc., et al. (the "Stockholder Group") | 701,275 | 39.6% | - Nicholas J. Swenson's beneficial ownership includes shares held indirectly through AO Partners I, L.P., Groveland Capital LLC, and Glenhurst Co[352] Certain Relationships and Related Transactions and Director Independence Lendway engaged in related-party transactions, including a note with Air T Inc. and a bridge loan with Bloomia's CEO, all reviewed by the Audit Committee, while maintaining a majority of independent directors - The Company entered into an unsecured Delayed Draw Term Note with Air T Inc. (a greater than 10% stockholder) for up to $3,500,000 (later increased to $3,750,000) to fund operations, bearing 8.0% fixed interest[355][356] - A bridge loan agreement for the Bloomia acquisition included approximately $400,000 provided by Mr. Jansen, Bloomia's CEO, with interest starting at 8% annually[357] - Mr. Jansen holds an 18.6% ownership interest in Tulp 24.1, LLC, the subsidiary that acquired Bloomia, while Lendway holds 81.4%[358] - The Audit Committee has a written policy to review and approve all related-party transactions, ensuring they are beneficial and fair to the Company[359] - The Board of Directors maintains a majority of 'independent directors' as defined by Nasdaq Rules, including Mary Herfurth, Chad Johnson, Matthew Kelly, and Nick Swenson[361] Principal Accountant Fees and Services This section details the audit fees paid to Boulay PLLP for 2024 and 2023, all of which were pre-approved by Lendway's Audit Committee Fees Paid to Independent Registered Public Accounting Firm (Boulay PLLP) | Fee Type | 2024 ($) | 2023 ($) | | :--------- | :------- | :------- | | Audit fees | 578,000 | 58,200 | | Total | 578,000 | 58,200 | - All fees paid in 2024 and 2023 were pre-approved by the Company's Audit Committee, as mandated by its charter[364] PART IV. Exhibits and Signatures This section lists all financial statements and provides a comprehensive index of exhibits filed with the Form 10-K, including acquisition agreements, employment contracts, and corporate governance documents Exhibits and Financial Statement Schedules This section lists all financial statements from Item 8 and provides a detailed index of exhibits, including acquisition agreements, employment contracts, and equity plans - The section includes a list of financial statements from Item 8, such as Consolidated Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, along with Notes to Consolidated Financial Statements[366] - A detailed table of exhibits is provided, including the Asset Purchase Agreement, Agreement for the Sale and Purchase of Shares (Bloomia acquisition), Credit Agreement, employment agreements, and equity incentive plans[367][369][370][371] Item 16. Form 10-K Summary This item indicates that no Form 10-K Summary is provided SIGNATURES The Form 10-K report is signed by Lendway, Inc.'s Co-Chief Executive Officers and Chief Financial Officer, along with its directors, affirming compliance with the Securities Exchange Act of 1934 - The report is signed by Mark R. Jundt (Co-Chief Executive Officer), Daniel C. Philp (Co-Chief Executive Officer), and Elizabeth E. McShane (Chief Financial Officer), as well as the directors[378][379] - Elizabeth E. McShane also signed on behalf of the named directors pursuant to Powers of Attorney[379][380]