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Bloomia Acquisition | 12 Months Ended
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Dec. 31, 2024
Bloomia Acquisition |
Bloomia Acquisition | 3. Bloomia Acquisition On February 22, 2024, the Company completed the acquisition of a majority interest in Fresh Tulips USA LLC and Bloomia B.V. and its subsidiaries (the “Acquisition”). The Acquisition was completed by the Company through its wholly owned subsidiaries, Tulp 24.1 and Tulipa Acquisitie Holding B.V. (“Tulipa”), pursuant to an Agreement for the Sale and Purchase of Shares by and among Tulp 24.1, Tulipa, Botman Bloembollen B.V., W.F. Jansen (“Jansen”), and H.J. Strengers, and Lendway, as the Guarantor. Jansen will continue to serve as chief executive officer of Bloomia following the Acquisition. As a result of the Acquisition, Tulp 24.1 became the holder of 100% of the ownership interests of Bloomia. The acquisition has been accounted for in accordance with ASC Topic 805, “Business Combinations,” using the acquisition method of accounting. Under the acquisition method of accounting, the total purchase price was allocated to the net identifiable tangible and intangible assets of Bloomia acquired, based on their fair values at the date of the acquisition. The acquisition was funded through a combination of debt and cash on hand. The total consideration transferred for the Bloomia acquisition was $53,360,000. Consideration comprised of $34,919,000 of cash paid, $15,451,000 of seller bridge loans in lieu of cash, and $2,990,000 of equity issued of Tulp 24.1 which is reflected as noncontrolling interest within these consolidated financial statements. Following the noncontrolling equity issued, the Company owns 81.4% of Tulp 24.1 and the CEO of Bloomia owns the remaining 18.6%. Refer to Note 9 for further discussion on the debt used to finance the Acquisition. Provisional fair value measurements were made for acquired assets and liabilities, and adjustments to those measurements may be made in subsequent periods as information necessary to complete the fair value analysis is obtained. The fair value measurements associated with working capital and the allocation of certain intangible assets are preliminary as of the date these financial statements are available to be issued. We expect to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. The preliminary allocation of the purchase price to assets acquired and liabilities assumed is as follows: ​
​ | ​ | ​ | ​
Fair value of purchase consideration |  | ​ |
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
Fair value of assets acquired and liabilities assumed: | ​ |  |
Cash and cash equivalents | ​ | $ | 741,000
Accounts receivable | ​ |  | 3,430,000
Inventories | ​ |  | 12,493,000
Prepaid and other | ​ |  | 2,359,000
Property and equipment | ​ |  | 11,349,000
Intangible assets | ​ |  | 26,870,000
Equity method investment | ​ |  | 167,000
Finance lease - right of use assets | ​ |  | 22,000
Operating lease - right of use assets | ​ |  | 34,289,000
Other assets | ​ |  | 358,000
Total assets acquired | ​ | ​ | 92,078,000
Accounts payable | ​ | ​ | 1,730,000
Accrued expenses | ​ | ​ | 2,843,000
Finance lease liabilities - current | ​ | ​ | 13,000
Operating lease liabilities - current | ​ | ​ | 945,000
Finance lease liabilities - long-term | ​ | ​ | 9,000
Operating lease liabilities - long-term | ​ | ​ | 33,344,000
Deferred tax liabilities | ​ | ​ | 10,722,000
Total liabilities assumed | ​ | ​ | 49,606,000
Net identifiable assets acquired | ​ | ​ | 42,472,000
Goodwill | ​ | ​ | 10,888,000
Total consideration transferred | ​ | $ | 53,360,000
​ The goodwill recognized is primarily attributable to the growth potential of the Company and is not deductible for tax purposes. The fair value of customer relationships was estimated using a discounted present value income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return. The fair value of the trade names was estimated using an income approach, specifically known as the relief from royalty method. The relief from royalty method is based on the hypothetical royalty stream that would be received if the Company were to license the trade name and was based on expected revenues. The useful life of the customer relationships was determined considering the period of expected cash flows used to measure the fair value of the intangible assets adjusted as appropriate for the entity-specific factors including legal, regulatory, contractual, competitive, economic or other factors that may limit the useful life of the customer relationships. The issued equity of the subsidiary, now reflected as noncontrolling interest was valued considering the total value of the acquired company and comparing that to the rollover value of the shares being converted. Revenue, net, and net loss before taxes for Bloomia since the date of acquisition included in the consolidated statement of operations and comprehensive income (loss) were approximately $37,773,000 and $5,022,000, respectively for year ended December 31, 2024. Unaudited pro forma information has been prepared as if the acquisition had taken place on January 1, 2023. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction actually taken place on January 1, 2023, and the unaudited pro forma information does not purport to be indicative of future financial operating results. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisitions. Unaudited revenue for the fiscal year 2023 was approximately $45,000,000. In accordance with ASC 270-10, the Company is unable to provide unaudited pro forma information for net earnings for the year ended December 31, 2023 due to lack of available information during the period prior to ownership. Unaudited pro forma information for the year ended December 31, 2024, excluding the impact of debt and intangible asset amortization, is as follows: ​
​ | ​ | ​ | ​
​ |  | Year Ended
​ | ​ | December 31, 2024
Revenue, net | ​ | $ | 40,147,000
Net loss attributable to Lendway | ​ |  | (5,539,000)
​ The Company incurred approximately $1,542,000 of acquisition-related costs that were expensed during the three months ended March 31, 2024. These costs are included in sales, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

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