What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2026-02-13 · 117 added, 99 removed, 113 unchanged (66% of the section changed)

5 unchanged sentences

by filing an amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware.

The name change became effective on January 28, 2026.

As a result of the name change, effective February 2, 2026, the Company’s common stock, par value $0.01 per share, ceased trading on the Nasdaq Capital Market under the name Lendway, Inc.

4 unchanged sentences

As previously reported, the Company’s Board of Directors approved a change in the Company’s fiscal year end from December 31 to June 30 of each calendar year.

As a result, the three months ended December 31, 2025 represent the second quarter of fiscal year 2026.

As a result, the three months ended March 31, 2026 represent the third quarter of fiscal year 2026.

Company Overview

3 unchanged sentences

Bloomia nurtured over 90 million tulip stems in the twelve months ended June 30, 2025.

Bloomia operates from three strategically positioned locations in the United States, the Netherlands, and South Africa, and also has a 30% interest in a greenhouse business in Chile.

Bloomia operates from three strategically positioned locations in the United States, the Netherlands, and South Africa, and also has a 30% interest in a greenhouse tulip business in Chile.

Bloomia operates greenhouses to hydroponically grow tulips at its United States and South Africa locations.

21 unchanged sentences

Results of Operations

The following table sets forth, for the periods indicated, certain items in our condensed consolidated statements of operations and comprehensive loss as a percentage of total revenue, net.

The following table sets forth, for the periods indicated, certain items in our condensed consolidated statements of operations and comprehensive (loss) income as a percentage of total revenue, net.

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of goods sold

Gross profit (loss)

Gross profit (loss) as a percent of revenue

Gross profit as a percent of revenue

Sales, general and administrative expenses

Operating loss

Operating loss as a percent of revenue

Operating (loss) profit

Operating (loss) profit as a percent of revenue

Foreign currency transaction (gain) loss, net

Interest expense, net

Other income, net

Loss from continuing operations before income taxes

Income tax benefit

Net loss from continuing operations

Other expense (income), net

(Loss) income from continuing operations before income taxes

Income tax (benefit) expense

Net (loss) income from continuing operations

Income from discontinued operations, net of tax

Net loss including noncontrolling interest

Net loss attributable to noncontrolling interest

Net loss attributable to Bloomia Holdings, Inc.

Three and Six Months Ended December 31, 2025 Compared to Three and Six Months Ended December 31, 2024

Net (loss) income including noncontrolling interest

Net income (loss) attributable to noncontrolling interest

Net (loss) income attributable to Bloomia Holdings, Inc.

Three and Nine Months Ended March 31, 2026 Compared to Three and Nine Months Ended March 31, 2025

Revenue, Net.

Revenue, net for the three months ended December 31, 2025 and 2024 was $6,739,000 and $6,192,000, respectively.

The increase is primarily due to higher prices in the current year.

Revenue, net for the six months ended December 31, 2025 and 2024 was $11,892,000 and $12,820,000, respectively.

The decrease in revenue is due to strategically growing tulips earlier in the calendar year to meet higher demand near Mother’s Day, resulting in fewer stems to sell this fiscal year.

Additionally, the Company purchased fewer Dutch bulbs in 2024, so there were less stems to grow at the end of the Dutch bulb season, which is typically July and August.

These decreases were partially offset by higher prices.

Revenue, net for the three months ended March 31, 2026 and 2025 was $14,436,000 and $12,443,000, respectively.

The increase is primarily due to higher prices in the current fiscal year.

Stems sold were approximately 3% less than prior year due to lower Valentine’s Day sales, partially offset by the shift of Easter sales from April in the prior fiscal year to March of the current fiscal year.

Revenue, net for the nine months ended March 31, 2026 and 2025 was $26,328,000 and $25,263,000, respectively.

The increase is due to higher prices in the current fiscal year.

Stems sold were approximately 10% less than prior year due to a lower Valentine’s Day sales and the Company strategically growing more tulips earlier in calendar year 2025 to meet higher demand near Mother’s Day 2025, resulting in fewer stems to sell this fiscal year.

Additionally, the Company purchased fewer Dutch bulbs in 2024, so there were less stems to grow in July and August 2025.

Stem sales benefited from the shift of Easter sales from April in the prior fiscal year to March of the current fiscal year.

Gross Margin.

Gross margin for the three months ended December 31, 2025 was $484,000, or 7.2% as a percentage of revenue, compared to gross loss of $582,000, or (9.4)%, for the three months ended December 31, 2024.

The current year benefitted from a $300,000 grant received from the U.S.

federal government.

The prior year includes unusually high bulb rot.

Gross margin for the six months ended December 31, 2025 was $424,000, or 3.6% as a percentage of revenue, compared to $858,000, or 6.7%, for the six months ended December 31, 2024.

The Company strategically accelerated the growing of stems to meet spring demand, which led to less stems available for sale in the beginning of the year to cover fixed costs such as rent, which reduced margin year over year.

This decline was partially offset by the grant received in the period, higher prices in the current year, and unusually high bulb rot in the prior year.

Gross margin for the three months ended March 31, 2026 was $2,861,000, or 19.8% as a percentage of revenue, compared to gross margin of $3,889,000, or 31.3% as a percentage of revenue, for the three months ended March 31, 2025.

The decrease is primarily due to lower stems sales in the current fiscal year of approximately 3%.

The Company raised prices in the current fiscal year to partially offset the increases in bulb costs and tariffs.

This decline was partially offset by a $150,000 grant received in the period.

Gross margin for the nine months ended March 31, 2026 was $3,285,000, or 12.5% as a percentage of revenue, compared to $4,747,000, or 18.8% as a percentage of revenue, for the nine months ended March 31, 2025.

The Company sold approximately 10% less stems in the current fiscal year resulting in a decrease in margin.

This decline was partially offset by a $450,000 grant received in the period.

Sales, General and Administrative.

Sales, general and administrative expenses for the three months ended December 31, 2025 were $2,773,000 compared to $3,305,000 for the three months ended December 31, 2024.

The decrease is due to a purchase accounting adjustment and provision for credit loss in the prior year.

Additionally, corporate overhead was higher last year due to timing.

Sales, general and administrative expenses for the six months ended December 31, 2025 were $5,756,000 compared to $6,096,000 for the six months ended December 31, 2024.

The decrease is due to a purchase accounting adjustment and provision for credit loss in the prior year

Sales, general and administrative expenses for the three months ended March 31, 2026 were $2,881,000 compared to $2,457,000 for the three months ended March 31, 2025.

The increase is primarily due to expenses incurred related to our previously disclosed rights offering and Seller Note Amendments (see Note 6 in the condensed consolidated financial statements) as well as an increase in corporate administrative costs.

Sales, general and administrative expenses for the nine months ended March 31, 2026 were $8,637,000 compared to $8,553,000 for the nine months ended March 31, 2025.

The increase is primarily due to expenses incurred related to our previously disclosed rights offering and Seller Note Amendments (see Note 6 in the condensed consolidated financial statements) partially offset by an increase in the provision for credit losses and purchase accounting adjustments in the prior year.

Interest Expense, net.

Interest expense for the three months ended December 31, 2025 and 2024 was $1,087,000 and $980,000, respectively.

Interest expense for the six months ended December 31, 2025 and 2024 was $1,909,000 and $1,780,000, respectively.

The increase for both periods is due to higher debt levels as the Company accrues interest on the seller note interest, an increased aggregate balance of related party notes outstanding at increased interest rates, and an increase in the revolving credit facility year over year.

Interest expense for the three months ended March 31, 2026 and 2025 was $1,134,000 and $970,000, respectively.

Interest expense for the nine months ended March 31, 2026 and 2025 was $3,043,000 and $2,750,000, respectively.

The increase for both periods is due to higher debt levels as the Company accrued interest on the Seller Note, an increased aggregate balance of related party notes outstanding at increased interest rates, and an increase in the revolving credit facility with Associated Bank, N.A.

year over year.

Income Taxes.

For the three months ended December 31, 2025 and 2024, the Company’s effective income tax rate was 19.9% and 23.7%, respectively.

For the six months ended December 31, 2025 and 2024, the Company’s effective income tax rate was 18.6% and 27.0%, respectively.

For the three months ended March 31, 2026 and 2025, the Company’s effective income tax rate was 35.0% and 20.2%, respectively.

For the nine months ended March 31, 2026 and 2025, the Company’s effective income tax rate was 20.96% and 27.9%, respectively.

See Note 9 in the condensed consolidated financial statements.

Income from Discontinued Operations, net of Tax.

For the three and six months ended December 31, 2024, income from discontinued operations of $22,000 and $88,000, respectively, is a result of the reduction in the accrual for sales tax due to the expiration of the statute of limitations.

For the three and nine months ended March 31, 2025, income from discontinued operations of $10,000 and $98,000, respectively, is a result of the reduction in the accrual for sales tax due to the expiration of the statute of limitations.

The Company does not expect income or loss from discontinued operations in fiscal year 2026.

Net Loss Attributable to Noncontrolling Interest .

The 18.6% noncontrolling interest in Tulp 24.1’s loss was $388,000 for the three months ended December 31, 2025 compared to a loss of $397,000 for the three months ended December 31, 2024.

The 18.6% noncontrolling interest in Tulp 24.1’s loss was $899,000 for the six months ended December 31, 2025 compared to a loss of $664,000 for the six months ended December 31, 2024.

The increase in both periods is primarily due to higher operating losses in each period.

Net Income (Loss) Attributable to Noncontrolling Interest .

The 18.6% noncontrolling interest in Tulp 24.1’s was income of $12,000 for the three months ended March 31, 2026 compared to income of $178,000 for the three months ended March 31, 2025.

The 18.6% noncontrolling interest in Tulp 24.1’s loss was $887,000 for the nine months ended March 31, 2026 compared to a loss of $486,000 for the nine months ended March 31, 2025.

The increased loss in both periods is primarily due to lower net income from Tulp 24.1’s continuing operations in both periods.

Non-GAAP Financial Measures

10 unchanged sentences

and (d) to evaluate compliance with covenants and restricted activities under the terms of our Amended Credit Agreement.

Included below is a reconciliation of EBITDA to net loss from continuing operations, the most directly comparable GAAP measure.

Included below is a reconciliation of EBITDA to net (loss) income from continuing operations, the most directly comparable GAAP measure.

Three Months Ended

Six Months Ended

Net loss from continuing operations

Nine Months Ended

Net (loss) income from continuing operations

Interest expense, net

Income tax benefit

Income tax (benefit) expense

Depreciation and amortization

3 unchanged sentences

The majority of cash is collected in the first half of the calendar year, and the majority of payments, primarily to purchase tulip bulbs, occur in the second half of the calendar year.

At December 31, 2025, the Company’s working capital (defined as current assets less current liabilities) was $9,613,000 compared to $1,089,000 at June 30, 2025.

The increase is due to the Company purchasing approximately $12,100,000 worth of Dutch tulip bulbs since June 30 2025, of which $4,000,000 was financed through long-term notes.

These bulbs will be grown into stems to be sold in the next six months.

The increase in inventory is offset by lower accounts receivable due to lower sales due to seasonality.

At March 31, 2026, the Company’s working capital (defined as current assets less current liabilities) was $4,796,000 compared to $1,089,000 at June 30, 2025.

The increase is due to the Company purchasing approximately $14,600,000 worth of Dutch tulip bulbs since June 30 2025, of which $4,000,000 was financed through long-term notes and $10,000,000 was financed through the revolving credit facility.

These bulbs have been grown into stems and sold or will be sold in the next four months.

As the Company collects sales receipts it plans to pay down the revolver which will decrease working capital as of fiscal year-end.

Operating Activities of Continuing Operations .

Net cash used in operating activities during the six months ended December 31, 2025 was $11,424,000 compared to cash use of $9,034,000 in the six months ended December 31, 2024.

The Company purchases the majority of its bulbs from growers in the Netherlands in the period.

Bulbs are priced in Euro.

The increase in cash used in the period is due to an increase in the Euro price of bulbs purchased and the increase in the Euro to dollar rate.

Net cash used in operating activities during the nine months ended March 31, 2026 was $11,148,000 compared to cash use of $7,297,000 in the nine months ended March 31, 2025.

The Company purchased the majority of its bulbs from growers in the Netherlands in the period, which were priced in Euro.

The increase in cash used during the nine months ended March 31, 2026 compared to the corresponding period of the prior fiscal year is due to an increase in the Euro price of bulbs purchased and the increase in the Euro to dollar rate.

Additionally, the Company paid 15% tariffs on its bulb purchases in fiscal year 2026.

Investing Activities of Continuing Operations .

Net cash used in investing activities during the six months ended December 31, 2025 was $137,000 compared to cash used of $505,000 in the six months ended December 31, 2024.

Net cash used in investing activities during the nine months ended March 31, 2026 was $292,000 compared to cash used of $573,000 in the nine months ended March 31, 2025.

Capital expenditures were primarily related to software in fiscal year 2026.

Our low level of capital expenditures is a result of our strategic decision to meet our operational needs through equipment leasing rather than outright ownership.

Our low level of capital expenditures during the nine months ended March 31, 2026 compared to the corresponding period of the prior fiscal year is a result of our strategic decision to meet our operational needs through equipment leasing rather than outright ownership.

Financing Activities .

Net cash provided by financing activities during the six months ended December 31, 2025 was $11,825,000.

The Company drew $10,000,000 on its revolving line of credit and entered into notes of $4,000,000 primarily to purchase tulip bulbs in the six months ended December 31, 2025.

Net cash provided by financing activities during the nine months ended March 31, 2026 was $11,663,000.

The Company drew $10,315,000 on its revolving line of credit and entered into net related party notes of $3,150,000 primarily to purchase tulip bulbs in the nine months ended March 31, 2026.

Offsetting this increase was $1,350,000 of term loan payments.

In the six months ended December 31, 2024, the Company drew $7,026,000 on its revolver and $3,500,000 in notes to fund bulb purchases.

In the nine months ended March 31, 2025, the Company drew $7,026,000 on its revolver and $3,750,000 in notes to fund bulb purchases.

The increase reflects the higher average cost per bulb and the higher Euro rate.

On September 15, 2025, the Company, as parent guarantor, entered into a Second Amendment to the existing Credit Agreement dated February 20, 2024 and previously amended on October 16, 2024.

Under the Credit Agreement, as amended (the “Credit Agreement”), among other things, the revolving facility capacity was temporarily increased from $6,000,000 to $10,000,000 and the definition of eligible inventory will continue to include inventory in the Netherlands, in each case until April 30, 2026.

The Company breached the senior cash flow leverage ratio and the fixed charge coverage ratio as of December 31, 2025, and expects to breach as of March 31, 2026.

The Company received a waiver from the lender for both covenants for both periods.

The Company expects to be in compliance with both covenant ratios of June 30, 2026.

Rights Offering

As previously disclosed, the Company recently conducted a rights offering that commenced in February 2026 and expired on April 1, 2026.

Pursuant to the rights offering, the Company distributed non-transferable subscription rights to stockholders of record as of February 16, 2026.

Each eligible stockholder was entitled to subscribe for additional shares of the Company’s common stock in proportion to their existing ownership, with the opportunity to participate in an over-subscription privilege, subject to availability and proration.

The Company received gross proceeds from the rights offering of $12,100,000, of which approximately $5,000,000 was cash and $7,100,000 was conversion of outstanding debt.

The rights offering resulted in an aggregate of approximately 3,000,000 shares of the Company’s common stock being issued to participants in the rights offering at a price of $4.05 per share.

The Company used the net cash proceeds from the rights offering primarily to make a $4,900,000 initial payment towards the Discounted Prepayment Amount under the Seller Note (see the discussion under “Seller Notes” below).

Credit Facility

On September 15, 2025, the Company, as parent guarantor, Tulp 24.1, as borrower, and each of Tulipa Acquisitie Holding B.V., Bloomia B.V., and Fresh Tulips, USA, as guarantors, entered into a Second Amendment to the existing Credit Agreement with Associated Bank, N.A.

dated February 20, 2024, which was previously amended on October 16, 2024, (as amended, (the “Credit Agreement”).

Under the original terms of the Credit Agreement, the Borrower received an $18,000,000 term loan and a $6,000,000 revolving credit facility.

Pursuant to the Second Amendment, among other things, the revolving facility capacity was temporarily increased from $6,000,000 to $10,000,000 and the definition of eligible inventory will continue to include inventory in the Netherlands, in each case until April 30, 2026.

Commencing September 30, 2025, the interest rate for all loans under the facility will be based on a term SOFR rate for an interest period selected by the Company plus an applicable margin, with a range from 3.00% to 4.00% based on the Company’s cash flow leverage ratio.

1 unchanged sentence

The Credit Agreement contains customary events of default, the occurrence of which would permit the lenders to terminate their commitments and accelerate loans under the Credit Agreement, including failure to make payments under the credit facility, failure to comply with covenants in the Credit Agreement and other loan documents, cross default to other material indebtedness of Tulp 24.1 or any of its subsidiaries, failure of Tulp 24.1 or any of its subsidiaries to pay or discharge material judgments, bankruptcy of Tulp 24.1 or any of its subsidiaries, and change of control of the Company.

Inclusive of the waivers, the Company expects to be in compliance with these financial covenants for at least the next twelve months.

As of March 31, 2026, the balance of the term loan under the Credit Agreement was $14,400,000 and the Company had an outstanding balance of $9,986,000 under the revolving credit facility.

The term loan is repaid in quarterly installments of $450,000, which began in June 2024.

3 unchanged sentences

The Company also provided an unsecured guaranty of the obligations of Tulp 24.1.

As part of the financing of the acquisition of Bloomia, Tulp 24.1 entered into notes payable with the sellers.

Notes payable for $12,750,000 have a term of five years, subject to requiring principal payments based on “excess cash flow” as defined.

Interest is at 8% per annum in the first year and increases annually by 2 percentage points.

On August 15, 2024, and as amended on September 27, 2024 and January 15, 2025, the Company entered into an unsecured Delayed Draw Term Note (the “2024 Note”) with Air T pursuant to which Air T has agreed to advance from time to time until August 15, 2026, but not on a revolving basis, up to $3,750,000 to fund the Company’s operations.

The 2024 Note remains scheduled to mature, and all principal and accrued but unpaid interest will become due, on August 15, 2029, subject to Air T’s right to demand payment on or after February 15, 2026.

Amounts outstanding under the 2024 Note bear interest at a fixed rate of 8.0%, which may be increased by 3.0% upon certain events of default, and is accrued and deferred until maturity.

As of December 31, 2025, the balance including interest on the 2024 Note was $2,451,000.

As noted above, the temporary increase in the revolving facility capacity under the Credit Agreement from $6,000,000 to $10,000,000 expired on April 30, 2026, and the outstanding balance of the revolving facility (approximately $9,086,000 as of the date of this report) has been in excess of $6,000,000 since that date.

As a result, from May 1, 2026 through the date of this report, the Company has been and remains out of compliance with the Credit Agreement as a result of being overdrawn on the revolving facility.

In addition, the Company was in breach of its financial covenants as of December 31, 2025 and March 31, 2026.

The Company received a waiver from the lender for both covenants for both periods.

Based on the Company’s current financial projections, we believe the Company will be in compliance with all required covenants for at least the next twelve months.

As part of the financing of the acquisition of Bloomia, on February 22, 2024, the Company and Bloomia B.V., as guarantors, and Tulp 24.1 and Tulipa Acquisitie Holding B.V., as borrowers (the “Seller Note Borrowers”), entered into a Bridge Loan Agreement with the sellers of Bloomia (“Seller”) in the amount of $12,750,000 (the “Seller Note”), which has a maturity date of March 24, 2029.

Payment amounts under the Bridge Loan Agreement are determined based on the excess cash flow of the Seller Note Borrowers.

The Seller Note initially bears interest at 8% per annum for the first year that increases annually by 2 percentage points.

Interest on the Seller Note is payable “in kind” (“PIK”) and added to the aggregate principal amount on the applicable interest payment date.

On January 19, 2026 and on April 15, 2026, respectively, the Seller Note Borrowers and the Sellers entered into a First Amendment to Bridge Loan Agreement and Second Amendment to Bridge Loan Agreement (collectively, the “Seller Note Amendments”).

The Bridge Loan Amendments provide, among other things, that the Seller Note Borrowers have the right to prepay the Seller Note in full at a discount in the aggregate amount of $7,330,000 (the “Discounted Prepayment Amount”) at any time prior to May 27, 2026 (the “Discounted Prepayment”).

In order to be eligible for the Discounted Prepayment, the Company was required to (i) make an initial payment of at least $4,800,000 towards the Discounted Prepayment Amount by April 15, 2026 and (ii) release the Sellers from any and all (potential or actual) liability in respect of (a) the Warranties (as defined in the Share Purchase Agreement dated February 21, 2024 (the “SPA”) between the Seller Note Borrowers and the Seller) as well as (b) the Indemnities (as defined in the SPA) specified in Clause 11.1 of the SPA, in each case to the extent such liabilities remain outstanding as of April 15, 2026.

The Company made a payment of $4,900,000 on April 15, 2026.

The remaining $2,430,000 of the Discounted Prepayment Amount not paid by April 15, 2026 accrues interest at the rate of 12% per annum.

If the Company does not pay the remaining balance of the Discounted Prepayment Amount and all accrued and unpaid interest in full on or before May 27, 2026, then the total remaining outstanding balance of the Bridge Loan shall be revised to equal an amount calculated as (x) $15,097,053, multiplied by (y) a ratio calculated as (i) the remaining balance of the Discounted Prepayment Amount not paid by May 27, 2026, divided by (ii) the Discounted Prepayment Amount.

Any such remaining balance shall accrue interest commencing effective as of April 16, 2026 and otherwise be payable in accordance with the original terms of the Seller Note.

Related Party Notes

On August 15, 2024, and as amended on September 27, 2024 and January 15, 2025, the Company entered into an unsecured Delayed Draw Term Note (the “2024 Note”) with Air T Inc.

(“Air T”) pursuant to which Air T agreed to advance from time to time until August 15, 2026, initially not on a revolving basis, up to $3,750,000 to fund the Company’s operations.

In January 2026, the 2024 Note was amended to allow for borrowing on a revolving basis.

Pursuant to the amendment the Company borrowed $200,000 in January 2026 from Air T.

The 2024 Note had a maturity date of August 15, 2029, subject to Air T’s right to demand payment on or after February 15, 2026.

beneficially owns greater than 10% of our outstanding common stock and is a member of a group of stockholders that collectively owns approximately 40% of our outstanding common stock.

Amounts outstanding under the 2024 Note bore interest at a fixed rate of 8.0%, subject to a 3.0% increase upon certain events of default, payable on the maturity date.

As of March 31, 2026 and June 30, 2025, the Company had $2,500,000 and $3,350,000, respectively, of principal outstanding and $348,000 and $209,000, respectively, of paid-in-kind interest outstanding under the 2024 Note.

On September 15, 2025, the Company entered into unsecured Promissory Notes (collectively, the “2025 Notes”) with Air T, AO Partners I, L.P.

(“AO Partners Fund”), and Gary S.

Kohler (“Kohler,” and, together with Air T and AO Partners Fund, the “Note Lenders”), pursuant to which the Lenders have agreed to lend to the Company a total of $4,000,000, in the amounts of $1,100,156, $1,699,844, and $1,200,000, respectively.

Proceeds from the notes are expected to be used to fund operation of the Bloomia business.

Amounts outstanding under the 2025 Notes bear interest at a fixed rate of 13.5% per year.

The 2025 Notes are scheduled to mature and all principal and accrued but unpaid interest will become due on June 1, 2027.

The 2025 Notes restrict the Company’s ability to obtain additional indebtedness, either directly or through its subsidiaries, other than existing indebtedness and usual and customary indebtedness incurred in the operation of the Company’s business, which restriction may be waived by the Lenders holding a majority interest in the 2025 Notes.

As of December 31, 2025, the balance including interests on the 2025 Notes was $4,161,000.

Kohler is the Chief Investment Officer and Portfolio Manager of BCCM Advisors, LLC, which, according to a Schedule 13G filed with the SEC on October 15, 2025, beneficially owned approximately 8.9% of our outstanding Common Stock as of September 23, 2025.

Air T beneficially owns greater than 10% of our outstanding Common Stock and is a member of a group of stockholders that collectively owns approximately 40% of our outstanding common stock.

Additionally, our current director and Co-Chief Executive Officer, Mark R.

Jundt, serves as General Counsel and Corporate Secretary of Air T, our current director and Co-Chief Executive Officer, Daniel C.

Philp, serves as Senior Vice President of Corporate development at Air T, and our current director Nicholas J.

Swenson serves as President and Chief Executive Officer of Air T and is himself a member of the stockholder group.

The entry into the 2024 Note and 2025 Notes were approved in advance by the Audit Committee of our Board of Directors in accordance with our Related Person Transaction Approval Policy and by a vote of solely independent directors who have no relationship with Air T.

The Company expects that cash from operations combined with funds available under the Credit Facility, the 2024 Note and the 2025 Notes will provide sufficient credit availability to support its ongoing operations, fund its debt service requirements, capital expenditures and working capital for at least the next 12 months.

As described in our registration statement on Form S-1 filed with the Securities and Exchange Commission on January 23, 2026, the Company intends to offer non-transferable subscription rights to purchase up to $15,500,000 in shares of our common stock.

The Company will distribute at no charge to the holders of our common stock, on a pro rata basis, non-transferable subscription rights to purchase up to an aggregate of 2.16 shares of our common stock at a subscription price of $4.05 per whole share, payable by each rights holder (i) in cash, (ii) by delivery in lieu of cash the cancellation of an equivalent amount of any indebtedness for borrowed money (principal and/or accrued and unpaid interest) owed by the Company to such rights holder, or (iii) by delivery of a combination of cash and such indebtedness.

We refer to this offering as the “Rights Offering”.

The Company is offering to each of our stockholders one non-transferable subscription right for each full share of common stock owned by that stockholder as of the close of business on February 16, 2026, the record date.

Each subscription right will entitle its holder to purchase 2.16 shares of our common stock.

Additionally, rights holders who fully exercise their basic subscription rights will be entitled to subscribe for additional shares of our common stock that remain unsubscribed as a result of any unexercised basic subscription rights (the “over-subscription privilege”).

The over-subscription privilege allows a rights holder to subscribe for additional shares of our common stock at the subscription price of $4.05 per whole share.

Kohler (“Kohler,” and, together with Air T and AO Partners Fund, the “Note Lenders”), pursuant to which the Note Lenders loaned the Company a total of $4,000,000, in the amounts of $1,100,156, $1,699,844, and $1,200,000, respectively.

The $4,000,000 principal and $288,000 of accrued interest are included in total noncurrent liabilities on the condensed consolidated balance sheets as of March 31, 2026.

Kohler is Chief Investment Officer and Portfolio Manager of BCCM Advisors, LLC, which beneficially owned approximately 9% of our outstanding common stock as of February 16, 2026.

Proceeds from the 2025 Notes were used to fund operations of the Bloomia business.

Amounts outstanding under the 2025 Notes bore interest at a fixed rate of 13.5% per year, payable at the scheduled maturity date of June 1, 2027.

The 2025 Notes restricted the Company’s ability to obtain additional indebtedness, either directly or through its subsidiaries, other than existing indebtedness and usual and customary indebtedness incurred in the operation of the Company’s business, which restrictions could be waived by the Note Lenders holding a majority interest in the 2025 Notes.

No closing or origination fees were paid to any Note Lender.

On April 1, 2026, in connection with the Company’s previously disclosed rights offering, the principal and accrued interest for the related party notes, including the 2024 Note and the 2025 Notes, were converted into shares of our common stock pursuant to the terms of the rights offering.

As a result, as of April 1, 2026 the Company has no related party notes or interest outstanding.

On April 13, 2026, the Company entered into an unsecured Promissory Note (the “2026 Note”) with Kohler, pursuant to which Kohler loaned the Company the principal amount of $1,000,000.

Proceeds from the 2026 Note were used towards our initial payment towards the Discounted Prepayment Amount as described in Note 6 to these condensed consolidated financial statements.

The principal amount of the 2026 Note bears interest at a fixed rate of 11.5% per annum, which increases to 14.5% if there is an event of default under the 2026 Note (with the 2026 Note containing customary events of default for a promissory note of this type).

The 2026 Note is scheduled to mature on March 31, 2029, at which time all principal and accrued and unpaid interest is due and payable in full.

The Company has the right to prepay the 2026 Note in whole or in part at any time without penalty.

Amounts paid or prepaid under the 2026 Note may not be reborrowed by the Company.

No closing or origination fees were paid in connection with the 2026 Note.

The Company expects that cash from operations combined with funds available under the credit facility, will provide sufficient credit availability to support its ongoing operations, fund its debt service requirements, capital expenditures and working capital for at least the next 12 months.

As the Company grows its businesses, we may be required to obtain additional capital through equity offerings or additional debt financings.

17 unchanged sentences

Factors that could cause our estimates and assumptions as to future performance, and our actual results, to differ materially include the following:

(1) our ability to complete the Rights Offering, (2) our ability to compete, (3) concentration of revenue among a small number of customers, (4) dependency on Dutch tulip bulbs, (5) changes in interest rates, (6) ability to comply with the requirements of the Credit Agreement and operate within its restrictions, (7) economic and market conditions that may restrict or delay appropriate or desirable opportunities, (8) our ability to develop and maintain necessary processes and controls relating to our businesses, (9) reliance on one or a small number of employees, (10) our ability to generate enough cash or secure enough capital to execute our business plans, (11) our ability to obtain seasonal workers, (12) other economic, international, business, market, financial, competitive and/or regulatory factors affecting the Company’s businesses generally, (13) exchange rate fluctuations, (14) tariffs, and (15) the availability of additional capital on desirable terms, if at all.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, including those set forth in this report and additional risks, if any, identified in our Transition Report on Form 10-KT, this and subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed with the SEC.

(1) our ability to compete, (2) concentration of revenue among a small number of customers, (3) dependency on Dutch tulip bulbs, (4) changes in interest rates, (5) ability to comply with the requirements of the Credit Agreement and operate within its restrictions, (6) economic and market conditions that may restrict or delay appropriate or desirable opportunities, (7) our ability to develop and maintain necessary processes and controls relating to our businesses, (8) reliance on one or a small number of employees, (9) our ability to generate enough cash or secure enough capital to execute our business plans, (10) our ability to obtain seasonal workers, (11) other economic, international, business, market, financial, competitive and/or regulatory factors affecting the Company’s businesses generally, (12) exchange rate fluctuations, (13) tariffs, and (14) the availability of additional capital on desirable terms, if at all.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, including those set forth in this report and additional risks identified in our Transition Report on Form 10-KT, this and subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed with the SEC.

Such forward-looking statements should be read in conjunction with the Company’s filings with the SEC.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis