Lendway's Q1 Plunge: Revenue Drops 22%, Net Loss Widens to $2.85M

TL;DR

**Lendway is bleeding cash and revenue, making it a risky bet as debt piles up and losses accelerate.**

AI Summary

LENDWAY, INC. (TULP) reported a significant decline in financial performance for the three months ended September 30, 2025, with net revenue decreasing by 22.3% to $5,153,000 from $6,628,000 in the prior year. This led to a gross loss of $60,000, a stark contrast to the gross profit of $1,440,000 in the same period last year. The company's net loss attributable to Lendway, Inc. widened substantially to $2,854,000, or $(1.61) per basic and diluted share, compared to a net loss of $1,125,000, or $(0.64) per share, in the three months ended September 30, 2024. Operating loss also deteriorated, reaching $(3,043,000) from $(1,351,000) year-over-year. Cash and cash equivalents increased to $1,840,000 from $906,000 at June 30, 2025, primarily due to $10,885,000 in financing activities, including $8,575,000 from a revolving debt facility and $4,000,000 from a related party note. Total assets grew to $105,031,000 from $96,102,000, while total liabilities increased to $93,513,000 from $81,265,000, driven by a significant rise in long-term debt to $36,851,000 from $28,354,000. The company's primary operations are now focused on Bloomia, a significant producer of fresh-cut tulips, which is a seasonal business with strongest sales in the first and second calendar quarters.

Why It Matters

Lendway's substantial revenue decline and widening net loss signal significant operational challenges, particularly given its reliance on the seasonal tulip business. For investors, this indicates increased risk and potential for further share price depreciation, especially with the net loss per share more than doubling to $(1.61). Employees and customers of Bloomia, the primary operating subsidiary, might face uncertainty if financial performance continues to deteriorate. The competitive landscape in the specialty agriculture sector, particularly for fresh-cut flowers, is intense, and Lendway's poor performance could allow competitors to gain market share. The increased debt load, with long-term debt rising to $36,851,000, also raises concerns about the company's long-term financial stability and ability to service its obligations.

Risk Assessment

Risk Level: high — The company reported a net loss attributable to Lendway, Inc. of $(2,854,000) for the three months ended September 30, 2025, a significant increase from $(1,125,000) in the prior year. Revenue decreased by 22.3% to $5,153,000, and the company incurred a gross loss of $(60,000). Furthermore, long-term debt, net, increased to $36,851,000 from $28,354,000, indicating a growing reliance on debt amidst declining profitability.

Analyst Insight

Investors should exercise extreme caution and consider divesting from LENDWAY, INC. given the substantial decline in revenue, widening net losses, and increasing debt burden. The company's inability to generate a gross profit and its significant cash burn from operating activities suggest fundamental business challenges that may not be easily overcome, especially in a seasonal industry.

Financial Highlights

debt To Equity

10.14

revenue

$5,153,000

operating Margin

-59.1%

total Assets

$105,031,000

total Debt

$41,774,000

net Income

$(2,854,000)

eps

$(1.61)

gross Margin

-1.2%

cash Position

$1,840,000

revenue Growth

-22.3%

Revenue Breakdown

Key Numbers

• $5.15M — Net Revenue (Decreased by 22.3% from $6.63M in Q1 2024)
• $(2.85M) — Net Loss Attributable to Lendway, Inc. (Widened from $(1.13M) in Q1 2024)
• $(1.61) — Net Loss Per Share (Increased from $(0.64) in Q1 2024)
• $(60,000) — Gross (Loss) Profit (Shifted from a gross profit of $1.44M in Q1 2024)
• $1.84M — Cash and Cash Equivalents (Increased from $906,000 at June 30, 2025, due to financing activities)
• $36.85M — Long-term Debt, Net (Increased from $28.35M at June 30, 2025)
• $10.89M — Net Cash Provided by Financing Activities (Primarily from revolving debt and related party notes)
• 22.3% — Revenue Decrease (Year-over-year decline in net revenue)
• 1,770,000 — Shares Outstanding (Consistent for both periods)
• 18.6% — Noncontrolling Interest (Equity interest in Tulp 24.1, LLC held by Bloomia's CEO)

Key Players & Entities

• LENDWAY, INC. (company) — registrant
• Tulp 24.1, LLC (company) — majority-owned U.S. subsidiary
• Bloomia B.V. (company) — acquired significant producer of fresh-cut tulips
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Stock Market LLC (regulator) — exchange where common stock is registered
• $5,153,000 (dollar_amount) — net revenue for three months ended September 30, 2025
• $6,628,000 (dollar_amount) — net revenue for three months ended September 30, 2024
• $2,854,000 (dollar_amount) — net loss attributable to Lendway, Inc. for three months ended September 30, 2025
• $1,125,000 (dollar_amount) — net loss attributable to Lendway, Inc. for three months ended September 30, 2024
• $36,851,000 (dollar_amount) — long-term debt, net, as of September 30, 2025

FAQ

Risk Factors

• Deteriorating Profitability and Increased Losses [high — financial]: The company experienced a significant decline in net revenue by 22.3% to $5,153,000, resulting in a gross loss of $60,000 compared to a gross profit of $1,440,000 in the prior year. This led to a widened net loss attributable to Lendway, Inc. of $2,854,000, or $(1.61) per share, from a loss of $1,125,000, or $(0.64) per share.
• Increased Indebtedness [high — financial]: Total liabilities increased to $93,513,000 from $81,265,000, primarily driven by a substantial rise in long-term debt to $36,851,000 from $28,354,000. This increase in leverage raises financial risk.
• Seasonality of Tulip Business [medium — operational]: Lendway's primary operations are focused on Bloomia, a producer of fresh-cut tulips, which is a seasonal business. The strongest sales occur in the first and second calendar quarters, implying potential revenue volatility and cash flow challenges outside these periods.
• Reliance on Financing Activities [medium — financial]: Cash and cash equivalents increased to $1,840,000 from $906,000, largely due to $10,885,000 in financing activities, including $8,575,000 from a revolving debt facility and $4,000,000 from a related party note. This indicates a reliance on debt to fund operations.
• Growing Operating Losses [high — financial]: The operating loss for the three months ended September 30, 2025, was $(3,043,000), a significant deterioration from $(1,351,000) in the same period last year, indicating operational inefficiencies or market pressures.
• Declining Accounts Receivable [low — financial]: Accounts receivable decreased significantly from $5,124,000 to $2,347,000. While this could indicate improved collections, it also correlates with the substantial revenue decline.
• Inventory Build-up [medium — financial]: Inventories increased substantially from $6,697,000 to $18,799,000. This could signal challenges in selling inventory or preparation for future demand, tying up significant capital.

Industry Context

Lendway operates in the fresh-cut flower industry, specifically with its Bloomia subsidiary focused on tulips. This sector is characterized by seasonality, with peak demand typically in the first and second calendar quarters. Competition can be intense, and factors like supply chain logistics, weather, and consumer demand significantly impact performance.

Regulatory Implications

As a publicly traded company, Lendway is subject to SEC regulations and reporting requirements. The significant increase in debt and widening losses may attract scrutiny from investors and potentially lenders regarding financial stability and compliance with debt covenants.

What Investors Should Do

1. Monitor inventory levels closely.
2. Analyze the drivers of the revenue decline.
3. Evaluate the terms and covenants of the new revolving debt facility.
4. Assess the sustainability of operations given the gross loss and operating loss.

Key Dates

• 2025-09-30: End of Q1 Fiscal Year 2026 — Reported significant revenue decline, gross loss, and widened net loss, alongside increased debt.
• 2025-06-30: End of Q4 Fiscal Year 2025 — Previous reporting period with higher revenue and gross profit, lower debt, and smaller net loss.

Glossary

Accumulated deficit

The total net losses of a company that have not been offset by net income since its inception. (Indicates the company has historically incurred more losses than profits, with the deficit widening to $(7,762,000) as of September 30, 2025.)

Noncontrolling interest

The portion of equity of a subsidiary that is not attributable to the parent company. (Represents an 18.6% equity interest in Tulp 24.1, LLC held by Bloomia's CEO, impacting consolidated equity.)

Equity-method investment

An accounting method used to report investments in other companies where the investor has significant influence but not control. (The company holds an equity-method investment valued at $240,000, showing a slight increase from $216,000.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net assets. (The company has $11,138,000 in goodwill, indicating past acquisitions, with a slight increase from the prior period.)

Intangible assets, net

Assets that lack physical substance but are identifiable and provide future economic benefits, such as patents, trademarks, and customer lists. (Represents a significant portion of noncurrent assets ($24,425,000), likely related to acquired businesses or intellectual property.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an asset for a specified period. (A substantial asset class ($31,971,000), reflecting long-term rental agreements, primarily for operational facilities.)

Related party note payable

A loan or debt obligation between entities that have a close relationship, such as parent companies and subsidiaries, or companies with common management. (The company has significant related party notes payable, totaling $6,430,000 ($2,407,000 current and $4,023,000 long-term), indicating financial ties with related entities.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Lendway, Inc. has experienced a significant downturn. Net revenue has fallen by 22.3% to $5.15 million, and the company has moved from a gross profit of $1.44 million to a gross loss of $60,000. This has exacerbated the net loss, which widened from $1.13 million to $2.85 million. Long-term debt has increased substantially to $36.85 million, while cash reserves have grown due to significant financing activities, highlighting increased financial leverage and reliance on debt.

Key Financial Figures

• $0.01 — ge on which registered Common Stock, $0.01 par value LDWY The Nasdaq Stock Mar

Filing Documents

• ldwy-20250930x10q.htm (10-Q) — 945KB
• ldwy-20250930xex31d1.htm (EX-31.1) — 16KB
• ldwy-20250930xex31d2.htm (EX-31.2) — 13KB
• ldwy-20250930xex32.htm (EX-32) — 12KB
• 0001104659-25-109207.txt ( ) — 4961KB
• ldwy-20250930.xsd (EX-101.SCH) — 40KB
• ldwy-20250930_cal.xml (EX-101.CAL) — 69KB
• ldwy-20250930_def.xml (EX-101.DEF) — 105KB
• ldwy-20250930_lab.xml (EX-101.LAB) — 377KB
• ldwy-20250930_pre.xml (EX-101.PRE) — 256KB
• ldwy-20250930x10q_htm.xml (XML) — 718KB

Financial Statements

Financial Statements 3 Condensed Consolidated Balance Sheets – September 30, 2025 (unaudited) and June 30, 2025 3 Condensed Consolidated Statements of Operations and Comprehensive Loss – Three months ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Stockholders' Equity – Three months ended September 30, 2025 and 2024 (unaudited) 5 Condensed Consolidated Statements of Cash Flows – Three months ended September 30, 2025 and 2024 (unaudited) 6 Notes to Condensed Consolidated Financial Statements – (unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 20 Item 4.

Controls and Procedures

Controls and Procedures 21 PART II. OTHER INFORMATION 22 Item 1.

Legal Proceedings

Legal Proceedings 22 Item 1A.

Risk Factors

Risk Factors 22 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22 Item 3. Defaults upon Senior Securities 22 Item 4. Mine Safety Disclosures 22 Item 5. Other Information 22 Item 6. Exhibits 23 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Lendway, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS Values are rounded to the nearest thousand dollars and thousand shares September 30, 2025 June 30, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents $ 1,840,000 $ 906,000 Accounts receivable - net of allowances for credit losses of $ 122 and $ 122 , respectively 2,347,000 5,124,000 Inventories 18,799,000 6,697,000 Prepaid expenses and other current assets 2,428,000 2,122,000 Total current assets 25,414,000 14,849,000 Noncurrent assets Property and equipment, net 11,056,000 11,433,000 Equity-method investment 240,000 216,000 Goodwill 11,138,000 11,128,000 Intangible assets, net 24,425,000 24,806,000 Operating lease right-of-use assets 31,971,000 32,306,000 Finance lease right-of-use assets 547,000 310,000 Long-term receivable 240,000 240,000 Other assets — 814,000 Total noncurrent assets 79,617,000 81,253,000 Total assets $ 105,031,000 $ 96,102,000 Liabilities and Stockholders' equity Current liabilities: Accounts payable $ 4,648,000 $ 1,748,000 Accrued compensation 326,000 385,000 Accrued expenses and other current liabilities 3,508,000 4,934,000 Current portion of operating lease liabilities 1,249,000 1,184,000 Current portion of finance lease liabilities 117,000 71,000 Current portion of debt 1,895,000 1,870,000 Related party note payable 2,407,000 3,559,000 Total current liabilities 14,150,000 13,751,000 Long-term liabilities: Operating lease liabilities, net of current portion 31,612,000 31,896,000 Finance lease liabilities, net of current portion 461,000 254,000 Long-term debt, net 36,851,000 28,354,000 Related party notes payable 4,023,000 — Deferred tax liabilities, net 6,416,000 7,010,000 Total long-term liabilities 79,363,000 67,514,000 Commitments and contingencies (No

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