BLOOMIA HOLDINGS, INC. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements The following are included on the pages indicated: ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 542 ) F-2 ​ ​ ​ Consolidated Balance Sheets as of December 31, 2024 and 2023 ​ F-4 ​ ​ ​ Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023 ​ F-5 ​ ​ ​ Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023 ​ F-6 ​ ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 ​ F-7 ​ ​ ​ Notes to Consolidated Financial Statements ​ F-8 ​ ​ ​ F-1 Table of Contents ​ ​ ​ ​ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Board of Directors and Stockholders of Lendway, Inc. and Subsidiaries ​ Opinion on the consolidated financial statements ​ We have audited the accompanying consolidated balance sheets of Lendway, Inc. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements). ​ In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates. ​ ​ F-2 Table of Contents Business Combination – Estimate for Valuation of Acquired Intangible and Certain Long-Lived Assets ​ Description of the Critical Audit Matter ​ On February 22, 2024, the Company acquired majority ownership of Bloomia B.V. and Subsidiaries for total purchase consideration of $53,360,000. The transaction was accounted for under the acquisition method of accounting as a business combination whereby the total purchase price was allocated to assets acquired and liabilities assumed based on the respective estimated fair value of such assets and liabilities on the acquisition date. The excess of the purchase consideration over the fair value of identifiable assets acquired and liabilities assumed was recorded as goodwill. We identified the fair value determination of the intangible assets and certain long-lived assets acquired in the business combination as a critical audit matter due to the significant judgement required in determining their estimated values. ​ With respect to the intangible assets acquired, which consist of a trade name and customer relationships, the estimated fair values were determined based on the relief-from-royalty and multi-period excess earnings (“MPEEM”) methods, respectively. A cost method approach was used to value certain other long-lived assets, consisting primarily of property and equipment. Auditing these values required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of significant management inputs to each valuation method, such as discount rates, royalty rates, revenue assumptions, forecasts, and retention rates. ​ How We Addressed the Critical Audit Matter in Our Audit ​ Our audit procedures related to the valuation determination of the intangible assets, certain long-lived assets, and noncontrolling interest acquired included the following, among others: ● Obtained an understanding of the design and implementation of controls over the valuation of the intangible assets and certain long-lived assets acquired, including management’s review of significant inputs used and outputs obtained from each asset’s valuation determination. ● We assessed the knowledge, skills, abilities and objectivity of management’s valuation specialist and evaluated the work performed. ● We assessed the reasonableness of significant assumptions by testing forecasts, growth rates, selection of discount rates, royalty rates, and other inputs. ● We involved our valuation specialists to assist with the evaluation of the methodologies used by the Company and significant valuation assumptions included in the fair value estimates, including the discount rate applied to future cash flows. ● We tested the completeness and accuracy of the underlying data used in the fair value models which included inspecting contractual documents, comparing projected cash flows to both historical actuals, management's plans and inquiring of management. ​ We have served as the Company’s auditor since 2023. ​ /s/ Boulay PLLP ​ Minneapolis, Minnesota March 27, 2025 PCAOB ID: 542 ​ ​ F-3 Table of Contents ​ ​ Lendway, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS Values are rounded to the nearest thousand dollar and thousand share ​ ​ ​ ​ ​ ​ ​ ​ As of December 31 ​ ​ 2024 ​ ​ 2023 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 1,759,000 $ 16,077,000 Accounts receivable - net of allowances for credit losses of $ 137 and $- 0 -, respectively ​ 2,243,000 ​ — Receivable from escrow account ​ — ​ 200,000 Inventories ​ 13,370,000 ​ — Prepaid expenses and other current assets ​ 1,466,000 ​ 52,000 Other current assets related to discontinued operations ​ — ​ 292,000 Total current assets ​ ​ 18,838,000 ​ ​ 16,621,000 Property and equipment, net ​ 11,316,000 ​ 35,000 Equity-method investment ​ 191,000 ​ — Goodwill ​ 10,705,000 ​ — Intangible assets, net ​ 25,568,000 ​ — Operating lease right-of-use assets ​ 32,942,000 ​ 7,000 Finance lease right-of-use assets ​ 65,000 ​ — Long-term receivable ​ 360,000 ​ — Other assets ​ — ​ 10,000 Total assets ​ $ 99,985,000 ​ $ 16,673,000 Liabilities and Stockholders’ equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 3,019,000 ​ $ 32,000 Accrued compensation ​ 490,000 ​ 635,000 Accrued expenses and other current liabilities ​ 1,361,000 ​ 168,000 Current portion of operating lease liabilities ​ 1,068,000 ​ 4,000 Current portion of finance lease liabilities ​ 21,000 ​ — Current portion of debt ​ 1,820,000 ​ — Current liabilities related to discontinued operations ​ 33,000 ​ 257,000 Total current liabilities ​ 7,812,000 ​ 1,096,000 Long-term liabilities: ​ ​ Accrued income taxes ​ — ​ 42,000 Operating lease liabilities, net of current portion ​ 32,416,000 ​ 3,000 Finance lease liabilities, net of current portion ​ 44,000 ​ — Long-term debt, net ​ 36,608,000 ​ — Related party note payable ​ 3,569,000 ​ — Deferred tax liabilities, net ​ 7,642,000 ​ — Total Long-term liabilities ​ 80,279,000 ​ 45,000 Commitments and contingencies (Note 14) ​ ​ Stockholders’ equity ​ ​ Common stock, par value $ 0.01 : ​ ​ Authorized shares - 5,714,000 ​ ​ Issued and outstanding shares - 1,770,000 and 1,743,000 at December 31, 2024 and 2023, respectively ​ 17,000 ​ 17,000 Additional paid-in capital ​ 16,236,000 ​ 16,176,000 Accumulated other comprehensive loss ​ ( 9,000 ) ​ — Accumulated deficit ​ ( 6,404,000 ) ​ ( 661,000 ) Total stockholders’ equity attributable to Lendway, Inc. ​ 9,840,000 ​ 15,532,000 Equity from noncontrolling interest ​ 2,054,000 ​ — Total Stockholders’ equity ​ 11,894,000 ​ 15,532,000 Total Liabilities and Stockholders’ equity ​ $ 99,985,000 ​ $ 16,673,000 ​ See accompanying notes to the consolidated financial statements. F-4 Table of Contents Lendway, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Values are rounded to the nearest thousand dollar and thousand share ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 2024 2023 Revenue, net ​ $ 37,773,000 ​ $ — Cost of goods sold ​ 31,264,000 ​ — Gross profit ​ 6,509,000 ​ — Sales, general and administrative expenses ​ 13,226,000 ​ 3,519,000 Operating loss ​ ( 6,717,000 ) ​ ( 3,519,000 ) Foreign exchange difference, net ​ ( 400,000 ) ​ — Interest expense (income), net ​ 2,969,000 ​ ( 518,000 ) Other income, net ​ ( 56,000 ) ​ — Loss from continuing operations before income taxes ​ ( 9,230,000 ) ​ ( 3,001,000 ) Income tax (benefit) expense ​ ( 2,329,000 ) ​ 20,000 Net loss from continuing operations ​ ( 6,901,000 ) ​ ( 3,021,000 ) Income from discontinued operations, net of tax ​ 224,000 ​ 2,474,000 Gain from sale of discontinued operations, net of tax ​ — ​ 2,961,000 Net (loss) income including noncontrolling interest ​ ( 6,677,000 ) ​ 2,414,000 Less: Net loss attributable to noncontrolling interest ​ ( 934,000 ) ​ — Net (loss) income attributable to Lendway, Inc. ​ ( 5,743,000 ) ​ 2,414,000 Other comprehensive loss (foreign currency translation) ​ ( 11,000 ) ​ — Less: Comprehensive loss attributable to noncontrolling interest ​ ( 2,000 ) ​ — Comprehensive (loss) income attributable to Lendway, Inc. ​ $ ( 5,752,000 ) ​ $ 2,414,000 Net (loss) income per basic and diluted share attributable to Lendway, Inc.: ​ ​ Continuing operations ​ $ ( 3.37 ) ​ $ ( 1.70 ) Discontinued operations ​ 0.13 ​ 3.06 Basic and diluted earnings per share ​ $ ( 3.24 ) ​ $ 1.36 Weighted average shares used in calculation of net (loss) income per share: ​ ​ Basic and diluted ​ 1,770,000 ​ 1,781,000 ​ See accompanying notes to the consolidated financial statements. ​ F-5 Table of Contents Lendway, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Values are rounded to the nearest thousand dollar and thousand share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total Lendway ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-In ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Noncontrolling ​ Stockholders' ​ Shares Amount Capital Loss Deficit Equity Interest Equity Balance at December 31, 2022 1,797,000 ​ $ 18,000 ​ $ 16,458,000 ​ $ — ​ $ ( 3,075,000 ) ​ $ 13,401,000 ​ $ — ​ $ 13,401,000 Repurchase of common stock ( 84,000 ) ​ ( 1,000 ) ​ ( 481,000 ) ​ — ​ — ​ ( 482,000 ) ​ — ​ ( 482,000 ) Issuance of common stock, net 24,000 ​ — ​ 155,000 ​ — ​ — ​ 155,000 ​ — ​ 155,000 Issuance of common stock upon vesting of restricted stock units 6,000 ​ — ​ — ​ — ​ — ​ — ​ — ​ — Value of stock-based compensation — ​ — ​ 44,000 ​ — ​ — ​ 44,000 ​ — ​ 44,000 Net income — ​ — ​ — ​ — ​ 2,414,000 ​ 2,414,000 ​ ​ ​ 2,414,000 Balance at December 31, 2023 1,743,000 ​ $ 17,000 ​ $ 16,176,000 ​ $ — ​ $ ( 661,000 ) ​ $ 15,532,000 ​ $ — ​ $ 15,532,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of noncontrolling interests in acquisition ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,990,000 ​ ​ 2,990,000 Issuance of restricted stock awards ​ 27,000 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Value of stock-based compensation — ​ — ​ 60,000 ​ — ​ — ​ 60,000 ​ — ​ 60,000 Net loss — ​ — ​ — ​ — ​ ( 5,743,000 ) ​ ( 5,743,000 ) ​ ( 934,000 ) ​ ( 6,677,000 ) Other comprehensive loss ​ — ​ — ​ — ​ ( 9,000 ) ​ — ​ ( 9,000 ) ​ ( 2,000 ) ​ ( 11,000 ) Balance at December 31, 2024 1,770,000 ​ $ 17,000 ​ $ 16,236,000 ​ $ ( 9,000 ) ​ $ ( 6,404,000 ) ​ $ 9,840,000 ​ $ 2,054,000 ​ $ 11,894,000 ​ See accompanying notes to the consolidated financial statements. ​ ​ F-6 Table of Contents Lendway, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Values are rounded to the nearest thousand dollar ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, 2024 2023 Operating Activities ​ ​ ​ ​ ​ ​ Net loss including noncontrolling interest (1) ​ $ ( 6,677,000 ) ​ $ ( 60,000 ) Gain from sale of discontinued operations, net of tax ​ — ​ ( 2,961,000 ) Adjustments to reconcile net loss including noncontrolling interest to net cash (used in) provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 2,641,000 ​ 7,000 Amortization of deferred financing costs ​ 95,000 ​ — Changes in allowance for credit losses ​ 108,000 ​ — Stock-based compensation expense ​ 60,000 ​ 44,000 Noncash paid in kind interest expense ​ 1,400,000 ​ — Noncash operating lease expense ​ 1,278,000 ​ — Deferred income tax benefit ​ ( 3,080,000 ) ​ — Equity method investment income ​ ​ ( 37,000 ) ​ ​ — Other non-cash items ​ ​ 84,000 ​ ​ — Increase (decrease) in cash resulting from changes in, net of acquisition: ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ 1,079,000 ​ ( 200,000 ) Inventories ​ ( 877,000 ) ​ — Income tax receivable ​ — ​ 14,000 Prepaid expenses and other current assets ​ 325,000 ​ ( 8,000 ) Accounts payable ​ 1,257,000 ​ ( 106,000 ) Accrued compensation ​ ( 1,980,000 ) ​ — Accrued expenses and other current liabilities ​ 204,000 ​ 365,000 Net cash used in operating activities of continuing operations ​ ( 4,120,000 ) ​ ( 2,905,000 ) Net cash provided by operating activities of discontinued operations ​ 68,000 ​ 3,423,000 Net cash (used in) provided by operating activities ​ ( 4,052,000 ) ​ 518,000 Investing Activities ​ ​ ​ ​ ​ ​ Proceeds from sale of business ​ — ​ 1,581,000 Purchase of other long-term assets ​ ​ — ​ ​ ( 10,000 ) Purchases of property and equipment ​ ( 1,170,000 ) ​ ( 39,000 ) Acquisition of Bloomia, net of cash acquired ​ ( 34,178,000 ) ​ — Receipts of escrow receivable ​ ​ 200,000 ​ ​ — Net cash (used in) provided by investing activities of continuing operations ​ ( 35,148,000 ) ​ 1,532,000 Net cash used in investing activities of discontinued operations ​ — ​ ( 24,000 ) Net cash (used in) provided by investing activities ​ ( 35,148,000 ) ​ 1,508,000 Financing Activities ​ ​ ​ ​ ​ ​ Proceeds from term loan ​ 18,000,000 ​ — Proceeds from revolving debt ​ 13,026,000 ​ — Proceeds from related party note ​ 3,500,000 ​ — Repayments of long-term debt ​ ( 1,350,000 ) ​ — Repayments of seller note ​ ( 2,700,000 ) ​ — Repayments of revolving debt ​ ( 5,065,000 ) ​ — Principal payments on finance lease liabilities ​ ( 16,000 ) ​ — Payment of financing costs ​ ( 513,000 ) ​ — Proceeds from issuances of common stock ​ — ​ ​ 9,000 Repurchase of common stock, net ​ — ​ ( 482,000 ) Net cash provided by (used in) financing activities ​ 24,882,000 ​ ( 473,000 ) Net (decrease) increase in cash and cash equivalents ​ ( 14,318,000 ) ​ 1,553,000 Cash and cash equivalents, beginning of period ​ 16,077,000 ​ 14,524,000 Cash and cash equivalents, end of period ​ $ 1,759,000 ​ $ 16,077,000 Supplemental cash flow information ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 1,626,000 ​ $ — Cash paid for income taxes ​ $ 694,000 ​ $ 88,000 Noncash purchase consideration - Equity issuance of noncontrolling interest ​ $ 2,990,000 ​ $ — Noncash purchase consideration - Seller notes ​ $ 15,451,000 ​ $ — Non-cash financing activities ​ ​ ​ ​ ​ ​ Purchase of property and equipment included in accrued liabilities ​ $ — ​ $ 3,000 Purchase of property and equipment included in debt ​ $ 150,000 ​ $ — Common stock issued for settlement of accrued liabilities ​ $ — ​ $ 146,000 (1) The year ended December 31, 2023 represents net income including noncontrolling interest less income from discontinued operations, net of tax. See accompanying notes to the consolidated financial statements. F-7 Table of Contents Lendway, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ 1. Description of Business and Basis of Presentation. Description of Business. Lendway, Inc. (“the Company”) is a specialty agricultural (“ag”) company focused on making and managing its ag investments in the United States (“U.S.”) and internationally. On February 22, 2024, the Company, through its majority-owned U.S. subsidiary Tulp 24.1, LLC (“Tulp 24.1”), acquired Bloomia B.V. (“Bloomia”). Subsequent to the purchase of Bloomia, the Company’s primary operations will be that of Bloomia. Bloomia is a significant producer of fresh cut tulips in the U.S. with a presence in the Netherlands and South Africa. As part of the consideration for the business combination, the Company issued units of Tulp 24.1 to the continuing CEO of Bloomia, which amounted to 18.6 % and is presented as noncontrolling interest in these consolidated financial statements. The remaining 81.4 % equity interest of Tulp 24.1 is owned by the Company and the Company is and maintains control of Tulp 24.1 as its sole managing member. The tulip sales business tends to be seasonal with first and second quarter being the strongest sales season. Refer to Note 3 for further discussion. The Company had previously planned to also develop a non-bank lending business via its wholly owned subsidiary, Farmland Credit, Inc. and its subsidiaries. Promptly after receiving a notice of resignation from the Company’s then-serving Chief Executive Officer in June 2024, our Board of Directors reexamined the Company’s strategic position and prospects. Primarily because the departing Chief Executive Officer represented nearly all of the Company’s knowledge and expertise relating to the purchase of existing loans and/or origination and funding of new loans, the Company has determined to focus solely on the ag business. Because the non-bank lending business remained in development, this change is not expected to have a significant adverse impact on the Company’s operations or financial results. Basis of Presentation. The accompanying consolidated financial statements of the Company include all wholly and majority owned subsidiaries of the Company. The operations of Bloomia are included since the date of acquisition. Entities for which the Company owns an interest, does not consolidate, but exercises significant influence, are accounted for under the equity method of accounting and are included in equity method investments within the consolidated balance sheets. All intercompany accounts and transactions have been eliminated. These consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated balance sheet as of December 31, 2023 has been derived from the audited balance sheet as of December 31, 2023 contained in the previous Form 10-K; however, certain prior period amounts have been reclassified to conform to current period classification. Reclassifications had no material effect on prior year net income, net income (loss) per share, or stockholders’ equity. On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s legacy business of providing in-store advertising solutions (the “In-Store Marketing Business”). The operations of the In-Store Marketing Business are presented as discontinued operations. All prior periods presented have been restated to present the In-Store Marketing Business as discontinued operations. Recently Issued Accounting Pronouncements. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ( ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 requires public companies to expand their income tax disclosures with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued and allows for either a prospective or retrospective approach on adoption. The Company will not early adopt and is currently assessing the impact of ASU 2023-09 on its consolidated financial statements and related disclosures. F-8 Table of Contents In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures . The amendments in this update require disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the statement of operations; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in ASU 2024-03 are effective for annual periods beginning after December 15, 2026 and should be applied retrospectively. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements. Recently Adopted Accounting Pronouncements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) . The Company adopted ASU 2023-07 as of January 1, 2024. The Company determined it had one segment that is reviewed by the Chief Operating Decision Maker (CODM) due to the Company having only one product, tulips, with over 95 % of sales derived in the U.S. The CODM consists of the Company’s executive team, including the CEOs, CFO and the CEO of Bloomia. 2. Significant Accounting Policies. Use of Estimates. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The key estimates made by management include the determination of fair values in conjunction with the acquisition of our majority interest in Bloomia, and the carrying value of inventories, operating right-of-use assets and lease liabilities, useful lives for property and equipment and intangible assets, interest rates, and valuation of income taxes. Actual results could differ from these estimates. Foreign Currency Transactions. The revenues of the Company and most of its subsidiaries are generated in U.S. dollars. In addition, most of the costs of the Company and most of its subsidiaries are incurred in U.S. dollars. The Company’s management has established that the U.S. dollar is the primary currency of the economic environment in which the Company and most of its subsidiaries operate. Thus, the functional currency of the Company and most of its subsidiaries is the U.S. dollar. Transactions and balances that are denominated in currencies that differ from the functional currencies have been remeasured into U.S. dollars in accordance with principles set forth in Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters . At each balance sheet date, monetary items denominated in foreign currencies are translated at exchange rates in effect at the balance sheet date, while income and expenses are translated at average exchange rates for the periods presented. All exchange gains and losses from the remeasurement mentioned above are reflected in the consolidated statements of operations and comprehensive income (loss) as foreign exchange difference, net, as appropriate. For subsidiaries whose functional currency has been determined to be other than the U.S. dollar, assets and liabilities are translated at year-end exchange rates, and consolidated statements of operations items are translated at average exchange rates prevailing during the year, and equity is translated at blended historical rates. Resulting translation differences are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash and Cash Equivalents All highly liquid debt instruments purchased with an original maturity of three months or less are considered to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in its deposit accounts. F-9 Table of Contents Accounts Receivable, Net. Accounts receivable are presented in the balance sheets at their outstanding balances net of the allowance for credit losses. These receivables are generally trade receivables due in one year or less or expected to be billed and collected within one year. The Company estimates credit losses on accounts receivable in accordance with ASC 326 Financial Instruments - Credit Losses . The Company measures the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. The estimate for allowance for credit losses is based on an expected loss rate for each pool. Management considers qualitative factors such as change in economic factors, regulatory matters, and industry trends to determine if an allowance should be further adjusted. The provision for credit losses is included in selling, general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). ​ ​ ​ ​ ​ Balance as of January 1, 2024 ​ $ — Provision for credit loss ​ ​ 108,000 Other adjustments ​ ​ 29,000 Balance as of December 31, 2024 ​ $ 137,000 ​ Inventories. Raw materials consist primarily of tulip bulbs, including freight and packaging supplies. Work-in-process consists of tulip stems and bulbs that have rooted. Inventories are stated at the lower of cost, as determined on the first-in, first-out method, or net realizable value. Finished goods and work-in-process include the inventory costs of raw materials, direct labor and normal manufacturing overhead. Abnormal amounts of spoilage are expensed as incurred and not included in overhead. ​ Prepaid expenses. The Company records a prepaid expense when it has paid of a good or service that it has not yet incurred. As of December 31, 2024, the Company had paid $ 1,012,000 for bulbs to be received in 2025. Property and Equipment, Net. Property and equipment, net are stated at historical cost, less accumulated depreciation and amortization. Bushes refer to peony plants, which accumulate planting and development costs that are capitalized into their basis until they become commercially productive, at which point the asset begins depreciating, and future maintenance costs are expensed as incurred. Planting costs consist primarily of the costs to purchase and plant nursery stock. Development costs consist of cultivation, pruning, irrigation, labor, spraying and fertilization, and interest costs during the development period. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably certain to occur) or the estimated useful lives of the improvements. The estimated useful lives of property and equipment are as follows: ​ ​ ​ ​ ​ Estimated Useful Life Machinery and equipment 5 - 20 years Leasehold improvements 15 years Bushes 7 - 10 years Vehicles 5 years Furniture and fixtures 5 - 7 years ​ Long-Lived Assets Impairment Testing . Long-lived assets, which include property, plant, and equipment, finite-lived intangible assets subject to amortization, and right-of-use assets, are assessed for impairment whenever events or changes in circumstances such as asset utilization, physical change, legal factors or other matters indicate the carrying value of those assets may not be recoverable from future undiscounted cash flows. The impairment test involves comparing the carrying amount of each individual asset-group to the forecasted undiscounted future cash flows generated by that asset group. These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts. In the event the carrying amount of the asset exceeds the gross undiscounted future cash flows generated by that asset and the carrying amount is not considered recoverable, an impairment exists. An impairment loss is measured as the excess of an individual asset group’s carrying amount over its fair value and is recognized in the statement of operations and comprehensive income (loss) in the period that the impairment occurs. The reasonableness of the useful lives of the asset and other long-lived assets is regularly evaluated. During the year ended December 31, 2024, and 2023, no impairment losses were identified. F-10 Table of Contents Goodwill and Indefinite-lived Assets . Goodwill results from business combinations and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Annually, or if conditions indicate an additional review is necessary, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and if it is necessary to perform the quantitative goodwill impairment test. The Company has one reporting unit. If the Company performs the quantitative test, it compares the carrying value of the reporting unit to an estimate of the reporting unit’s fair value to identify potential impairment. The fair value of each reporting unit is estimated using a discounted cash flow model. Where available, and as appropriate, comparable market multiples are also used to corroborate the results of the discounted cash flow models. In determining the estimated future cash flow, the Company considers and applies certain estimates and judgments, including current and market projected future levels of income based on management’s plans, business trends, prospects and economic conditions and market-participant considerations. If the estimated fair value of the reporting to unit is less than the carrying value, a goodwill impairment loss is recorded for the difference, up the amount of the total goodwill. During the year ended December 31, 2024, no impairment losses were identified. Further, the Company recognized a trade name associated with the Bloomia acquisition that was determined to be an indefinite-lived intangible asset. Annually, or if conditions indicate an additional review is necessary, we test indefinite-lived trade names for impairment. We have the option to first assess qualitative factors to determine whether the fair value of a trade name is “more likely than not” less than its carrying value. If it is more likely than not that an impairment has occurred, we then perform the quantitative impairment test. If we perform the quantitative test, the carrying value of the asset is compared to an estimate of its fair value to identify impairment. The fair value is determined by the relief from royalty method, which requires significant judgment. Actual results may differ from assumed and estimated amounts utilized in the analysis. If we conclude an impairment exists, the asset’s carrying value will be written down to its fair value. During the year ended December 31, 2024, no impairment losses were identified. Equity-Method Investments. Investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over the investee. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheets as equity-method investments and its share of investees’ earnings or losses together with other-than-temporary impairments in value, basis differences between the carrying amount and our ownership interest in the underlying net assets of the investee, and any gain or loss from the sale of an equity method investment as gain or loss on sale of equity investment in net income of unconsolidated investments in the consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Investments in equity-method investments and joint ventures of immaterial entities are estimated based upon the overall performance of the entity where financial results are not available on a timely basis. Fair Value. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC 820) establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ● Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. ● Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. F-11 Table of Contents The carrying amounts of certain financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other financial working capital items approximate their fair values at December 31, 2024 and 2023 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. The carrying amount of debt approximates fair value due to the debt’s variable market interest rate. Revenue Recognition. The Company accounts for revenue in accordance with FASB Topic 606, “Revenue from Contracts with Customers,” (ASC 606), using the following steps: ● Identify the contract or contracts, with a customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to performance obligations in the contract; and ● Recognize revenue when or as the Company satisfies a performance obligation. The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; this occurs with the transfer of control of its tulips. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. Revenue from product sales is governed primarily by customer pricing and related purchase orders (“contracts”) which specify shipping terms and the transaction price. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of tulips to the customer when the product is delivered. The Company expenses the incremental costs of obtaining a contract, as the amortization period is one year or less. These costs are included in sales and marketing expense in the consolidated statements of operations. The following table presents revenue disaggregated by customer, as determined by the operational nature of their industry: ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 Supermarket ​ $ 34,793,000 Wholesaler ​ 2,521,000 Other ​ 459,000 ​ ​ $ 37,773,000 ​ During the year ended December 31, 2024, the Company had three customers that account for 10% or more of the total revenues. These three customers accounted for approximately 34 %, 20 %, and 11 % of revenues, respectively, for the year ended December 31, 2024. As of December 31, 2024, two of these customers also accounted for approximately 18 % and 22 % of accounts receivable, net, while one different customer accounted for approximately 13 % of accounts receivable, net as of December 31, 2024. The loss of a major customer could adversely affect the Company’s operating results and financial condition. Cost of Sales. Cost of sales consists primarily of costs to procure, sort, pick, cool, and transport bulbs. Additionally, cost of sales includes labor and facility costs related to production operations. Shipping and Handling. The Company’s shipping and handling costs include costs incurred with third-party carriers to transport products to customers. The costs of outbound freight are included in the cost of goods sold in the consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2024, the costs of out-bound freight were approximately $ 2,534,000 . Advertising Costs. The Company expenses advertising costs as incurred. These costs are included within sales, general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). Total advertising expense was approximately $ 43,000 for the year ended December 31, 2024. F-12 Table of Contents Interest expense. For debt with variable rate interest , interest expense is recorded based on a weighted average effective interest rate method. The significant assumptions used in the weighted average estimate are the future debt balance and the length of time the debt will be outstanding. Paid in kind (PIK) interest is not paid in cash and is included in the long-term debt, net in the consolidated balance sheets. Financing costs incurred as part of the acquisition of Bloomia are amortized and expensed in interest expense in the consolidated statements of operations and comprehensive income (loss). Income Taxes . The Company uses the liability method to account for income taxes as prescribed by ASC 740. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates in the period during which they are signed into law. In determining the Company’s ability to realize its deferred tax assets, the Company considers any available tax planning strategies that could be implemented. Under ASC 740, a valuation allowance is required when it is more likely than not that all or some portion of the deferred tax assets will not be realized due to the inability to generate sufficient future taxable income of the correct character. Failure to achieve previously forecasted taxable income could affect the ultimate realization of deferred tax assets and could negatively impact the Company’s effective tax rate on future earnings. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest income or expense/penalties attributable to the overpayment or underpayment, respectively, of income taxes is recognized as an element of our provision for income taxes. As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. If we ultimately determine that the payment of these liabilities will be unnecessary, the liability will be reversed, and we will recognize a tax benefit during the period in which it is determined the liability no longer applies. Conversely, the Company records additional tax charges in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Stock-Based Compensation . The Company measures and recognizes compensation expense for all stock-based awards at fair value at grant date. Restricted stock units and awards are valued at the closing market price of the Company’s stock on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding several complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. During the year ended December 31, 2024, the Company issued 27,000 shares of restricted stock under its 2018 equity incentive plan. The shares underlying the awards were assigned a grant date fair value of $ 5.64 per share, based on the stock price on the date of grant, and are scheduled to vest over 3 years. During the year ended December 31, 2023, no stock options or restricted stock were issued by the Company. The Company recorded total stock-based compensation expense of $ 60,000 and $ 44,000 for the years ended December 31, 2024 and 2023, respectively. F-13 Table of Contents Net Income (Loss) per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding and excludes any dilutive effects of stock options and restricted stock units and awards. Diluted net income (loss) per share gives effect to all diluted potential common shares outstanding during the year. In determining diluted net income (loss) per share, the Company considers whether the result of the incremental shares would be antidilutive. During the year ended December 31, 2024, the Company was in a net loss position and the result of the potentially dilutive securities was determined to be antidilutive and therefore, no incremental shares are included in any of the per share calculations. At December 31, 2024, no options were outstanding. At December 31, 2023, options to purchase 1,000 shares of common stock with a weighted average exercise price of $ 15.54 were outstanding and determined to be antidilutive. Weighted average common shares outstanding for the years ended December 31, 2024, and 2023 were as follows: ​ ​ ​ ​ ​ ​ Year ended December 31 2024 2023 Denominator for basic net income (loss) per share - weighted average shares 1,770,000 1,781,000 Effect of dilutive securities: Stock options and restricted stock units — — Denominator for diluted net income (loss) per share - weighted average shares 1,770,000 1,781,000 ​ ​ 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. F-14 Table of Contents 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. F-15 Table of Contents 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). 4. Sale of In-Store Marketing Business and Presentation as Discontinued Operations. On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s In-Store Marketing Business for a price of $ 3,500,000 to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”) under an Asset Purchase Agreement (the “Purchase Agreement”). The Company retained accounts receivable, as well as cash, cash equivalents and marketable securities. The cash consideration for the sale was subject to a post-closing adjustment. The final purchase adjustment for the net balance was to reduce the cash consideration by $ 1,500,000 , with the Company retaining an equal amount of cash that had been received for unexecuted programs. Under the Purchase Agreement, $ 200,000 was escrowed for a twelve-month period for any future claims, as defined in the Purchase Agreement, by the Buyer against the Company and was included in receivable from escrow account on the consolidated balance sheets as of December 31, 2023. The escrow payment was received in fiscal year 2024. The results of the In- Store Marketing Business have been presented as discontinued operations and the related assets and liabilities have been classified as related to discontinued operations, for all periods presented. The carrying amounts of major classes of assets and liabilities that were reclassified as related to discontinued operations on the consolidated balance sheets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Current Assets: ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ $ — ​ $ 292,000 Current assets related to discontinued operations ​ $ — ​ $ 292,000 Current Liabilities: ​ ​ Accounts payable ​ $ — ​ $ 7,000 Accrued sales tax ​ 24,000 ​ 169,000 Other accrued liabilities ​ 9,000 ​ 81,000 Current liabilities related to discontinued operations ​ $ 33,000 ​ $ 257,000 ​ ​ F-16 Table of Contents ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ 2024 ​ 2023 Service revenues, net ​ $ — ​ $ 21,078,000 Cost of services ​ ​ — ​ ​ 16,087,000 Gross Profit ​ ​ — ​ 4,991,000 Operating Expenses: ​ ​ ​ Selling ​ ​ ( 224,000 ) ​ 1,135,000 Marketing ​ ​ — ​ 806,000 General and administrative ​ ​ — ​ 679,000 Total Operating Expenses ​ ​ ( 224,000 ) ​ 2,620,000 Operating Income ​ $ 224,000 ​ $ 2,371,000 Other Income ​ ​ — ​ 91,000 Income from discontinued operations ​ $ 224,000 ​ $ 2,462,000 ​ ​ ​ ​ ​ ​ ​ Gain from sale of discontinued operations before income taxes ​ $ — ​ $ 3,044,000 Income tax (benefit) expense ​ — ​ 83,000 Gain from the sale of discontinued operations, net of tax ​ $ — ​ $ 2,961,000 ​ Results of discontinued operations are summarized below: For the year ended December 31, 2024, the Company recognized approximately $ 224,000 of benefit in sales, general and administrative expense of discontinued operations from the reduction in the accrual for sales tax due to the expiration of the statute of limitations. ​ 5. Inventories. Inventories consisted of the following at: ​ ​ ​ ​ ​ ​ December 31, 2024 Finished goods ​ $ 165,000 Work-in-process ​ 2,235,000 Raw materials and packaging supplies ​ ​ 10,970,000 Inventories ​ $ 13,370,000 ​ ​ 6. Property and Equipment. Property and equipment, net consisted of the following at: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 Machinery and equipment ​ $ 11,129,000 ​ $ 3,000 Leasehold improvements ​ 344,000 ​ 13,000 Bushes ​ 489,000 ​ — Vehicles ​ 396,000 ​ — Furniture and fixtures ​ 204,000 ​ 180,000 Construction in progress ​ 240,000 ​ 10,000 Property and equipment, gross ​ 12,802,000 ​ 206,000 Less: accumulated depreciation ​ ( 1,486,000 ) ​ ( 171,000 ) Property and equipment, net ​ $ 11,316,000 ​ $ 35,000 ​ F-17 Table of Contents At December 31, 2024, property and equipment, net, of $ 594,000 and $ 395,000 were located in the Netherlands and South Africa, respectively. Included in machinery and equipment is $ 190,000 of spare parts that are not currently in use and not being depreciated. Depreciation expense was $ 1,331,000 for the year ended December 31, 2024. Depreciation of $ 1,267,000 and $ 64,000 were recorded within cost of goods sold and sales, general and administrative expenses, respectively, for the year ended December 31, 2024. Depreciation expense for the year ended December 31, 2023 was $ 40,000 , which was recorded in sales, general and administrative expenses. 7. Equity Method Investment. Araucanía Flowers SA (“Araucania”) is based in Chile and serves as a marketing arm for the Company to export its crops to Latin-America countries. Araucanía has two other shareholders that hold 70 % of its aggregate issued and outstanding shares. At December 31, 2024, the Company had a 30 % equity interest in Araucania with a carrying amount of approximately $ 191,000 . For the year ended December 31, 2024, the equity in net income of Araucania was approximately $ 37,000 . As of December 31, 2024, the Company had a note receivable from Araucanía with a balance of $ 116,000 which is included in long-term receivable in the accompanying consolidated balance sheet. Bloomia had a 50 % ownership interest in Horti-Group USA LLC (“Horti-Group”). Horti-Group operates a 45 -acre facility near Washington D.C. that Bloomia utilizes to grow and distribute its tulips to North American customers. On February 9, 2023, Bloomia sold its interest in Horti-Group to V-Maxx for a sale price of $ 2,500,000 . The sale price was seller-financed via the issuance of an interest-free loan from Fresh Tulips to V-Maxx with an original principal amount $ 2,500,000 . The loan to V-Maxx was to be repaid in 17 monthly installments of $ 150,000 for the first 16 months and $ 100,000 for the last month, with the first payment on April 1, 2023, and the last payment on August 1, 2024. The Company did not receive cash from V-Maxx, instead the $ 150,000 per month was applied to the rent owed to Horti-Group and is reflected in Noncash operating lease expense as an add back to net loss in the consolidated statement of cash flows. At December 31, 2024, the balance of the loan was zero . 8. Goodwill and Other Intangible Assets. The following table summarizes the changes in goodwill: ​ ​ ​ ​ ​ Balance as of January 1, 2024 $ — Goodwill resulting from the Bloomia Acquisition ​ 10,122,000 Measurement period adjustment ​ 766,000 Other - Foreign currency translation ​ ​ ( 183,000 ) Balance as of December 31, 2024 ​ $ 10,705,000 ​ During the year ended December 31, 2024, the Company recorded a measurement period adjustment which increased goodwill by $ 766,000 . This measurement period adjustment resulted from a remeasurement of acquired payroll taxes payable, other accruals, inventory and property and equipment. Other intangible assets and related amortization are as follows at December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Useful Life Accumulated Net Carrying ​ ​ Amount ​ (Years) ​ Amortization ​ Amount Tradename ​ $ 8,570,000 Indefinite ​ $ — ​ $ 8,570,000 Customer relationships ​ 18,300,000 12 ​ 1,302,000 ​ 16,998,000 ​ ​ $ 26,870,000 ​ ​ ​ $ 1,302,000 ​ $ 25,568,000 ​ For the year ended December 31, 2024, amortization of intangible assets expensed to operations was $ 1,302,000 . The weighted average remaining amortization period for intangible assets as of December 31, 2024 is approximately 11.1 years. F-18 Table of Contents Remaining estimated aggregate annual amortization expense is as follows for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ 2025 ​ $ 1,525,000 2026 ​ 1,525,000 2027 ​ 1,525,000 2028 ​ 1,525,000 2029 ​ 1,525,000 Thereafter ​ 9,373,000 Total ​ $ 16,998,000 ​ ​ 9. Long-term debt, net. The components of debt consisted of the following at: ​ ​ ​ ​ ​ ​ December 31, 2024 Credit Agreement - term loan ​ $ 16,650,000 Notes payable ​ 12,750,000 Credit Agreement - revolving credit facility ​ 7,961,000 Paid in kind interest (PIK) ​ 1,331,000 Machinery financing loan (1) ​ 141,000 ​ ​ $ 38,833,000 Less: unamortized debt issuance costs ​ ( 312,000 ) Total debt ​ $ 38,521,000 PIK included in accrued expenses and other current liabilities ​ ( 93,000 ) Less current maturities ​ ( 1,820,000 ) Long term debt, net of current maturities ​ $ 36,608,000 (2) In the year ended December 31, 2024, the Company entered into a financing arrangement to finance the purchase of machinery. This transaction represented a failed sale leaseback with the associated equipment recorded in property and equipment, net and debt on the Company’s consolidated balance sheet. To finance the Bloomia acquisition, the Company entered into a revolving credit and term loan agreement (the “Credit Agreement”), with Tulp 24.1 as the borrower (the “Borrower”) for a $ 18,000,000 term loan and a $ 6,000,000 revolving credit facility. On October 16, 2024, the Company amended the credit agreement (Amended Credit Agreement) to, among other things, temporarily increase the borrowing capacity under the revolving credit facility to $ 8,000,000 through March 31, 2025. The revolving credit facility may be used by the Company for general business purposes and working capital, subject to availability under a borrowing base consisting of 80 % of eligible accounts receivable and generally 50 % of eligible inventory. Borrowings under the Amended Credit Agreement bear interest at a rate per annum equal to Term (Secured Overnight Financing Rate) SOFR for an interest period of one month plus 3.0 %. In addition to paying interest on the outstanding principal under the Amended Credit Agreement, the Borrower is required to pay a commitment fee of 0.50 % on the unutilized commitments under the revolving credit facility. The obligations under the Amended Credit Agreement are secured by substantially all of the personal property of the Borrower and its subsidiaries. The Company provided an unsecured guaranty of the obligations of the Borrower under the Amended Credit Agreement. The Amended Credit Agreement requires the Borrower and its subsidiaries to maintain (a) a minimum fixed charge coverage ratio of not less than 1.25 to 1.00 and (b) a maximum senior cash flow leverage ratio of 3.75 to 1.0 until December 31, 2024, stepping down to 2.00 to 1.00 on December 31, 2027, until the maturity date of the Amended Credit Agreement. As of December 31, 2024, the Company was in compliance with these financial covenants. The Amended Credit Agreement contains other customary affirmative and negative covenants, including covenants that restrict the ability of the Borrower and its subsidiaries to incur additional indebtedness, dispose of significant assets, make distributions or pay dividends, make certain investments, including any acquisitions other than permitted acquisitions, make certain payments, enter into sale and leaseback transactions or grant liens on its assets, subject to certain limitations. The Amended Credit Agreement also contains customary events of default, the occurrence of which would permit the lenders to terminate their commitments and accelerate loans under the Amended Credit Agreement, including failure to make payments under the credit facility, F-19 Table of Contents failure to comply with covenants in the Amended Credit Agreement and other loan documents, cross default to other material indebtedness of the Borrower or any of its subsidiaries, failure of the Borrower or any of its subsidiaries to pay or discharge material judgments, bankruptcy of the Borrower or any of its subsidiaries, and change of control of the Company. The term loan is scheduled to be repaid in quarterly installments of $ 450,000 , that commenced on June 30, 2024 with a scheduled maturity date of February 20, 2029. The term loan is subject to additional principal payments under the annual 50 % of excess cash flow provision (waived if total net cash flow leverage is less than 2.0 x as of fiscal year-end). The scheduled maturity date of the revolving credit facility is February 20, 2029. As part of the financing of the Bloomia acquisition, the Company entered into notes payable with the sellers. Notes payable for $ 12,750,000 have a term of five years with a scheduled maturity date of March 24, 2029. The notes payable are subject to additional principal payments based on “excess cash flow” (“excess cash flow” has the same definition as “excess cash flow” used to determine additional principal payments for the term loan under the Credit Agreement). The notes payable initially bear interest at 8 % per annum for the first year that increase annually by 2 percentage points. Interest on loans made under the notes payable is payable “in kind” (“PIK”). Interest that is payable “in-kind” is added to the aggregate principal amount on the applicable interest payment date. Additionally, the Company entered into short-term notes payable with the sellers. The short-term notes payable of $ 2,700,000 was paid in full as of June 30, 2024. As of December 31, 2024, there was $ 385,000 of debt issuance costs related to the term loan, net of amortization of $ 73,000 , which has been presented as a direct deduction from long-term debt in the consolidated balance sheet. As of December 31, 2024, there was $ 128,000 of deferred financing costs related to the revolving credit facility, net of amortization of $ 22,000 , which has been presented within prepaid expenses and other current assets in the consolidated balance sheet. The Company incurred $ 1,605,000 of interest expense on the term loans and revolving facility in the year ended December 31, 2024, respectively. The Company incurred non-cash paid-in-kind interest of $ 1,331,000 on the seller notes facility in the year ended December 31, 2024, respectively. Term loan, revolving credit facility and paid-in-kind interest are included in interest expense (income), net on the consolidated statements of operations and comprehensive income (loss). The combined aggregate maturities for the years following December 31, 2024 are as follows: ​ ​ ​ ​ 2025 ​ ​ 1,820,000 2026 ​ 1,821,000 2027 ​ 1,822,000 2028 ​ 1,824,000 2029 ​ 31,517,000 Thereafter ​ 29,000 ​ ​ $ 38,833,000 ​ ​ 10. Stockholders’ Equity. ​ Stock-Based Compensation . The Company’s stock-based compensation plans are administered by the Compensation Committee of the Board of Directors, which, subject to approval by the Board of Directors, selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award. ​ Stock-based compensation expense that was recognized in the continuing operations of the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023 was $ 60,000 and $ 39,000 , respectively. Stock based compensation for discontinued operations for the years ended December 31, 2024 and 2023 was $- 0 - and $ 5,000 , respectively. ​ F-20 Table of Contents The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards with the following weighted-average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Employee Stock Purchase Plan: ​ Expected life (years) N/A 1.0 ​ Expected volatility N/A % 95 % Dividend yield N/A % — % Risk-free interest rate N/A % 4.7 % ​ The Company uses the graded attribution method to recognize expense for unvested stock-based awards. Forfeitures are recognized as incurred. Stock Options, Restricted Stock, Restricted Stock Units, and Other Stock-Based Compensation Awards. The Company maintains stock and incentive plans (the “Plans). Under the terms of the Plans, the Company may grant awards in a variety of instruments including stock options, restricted stock and restricted stock units to employees, consultants and directors generally at an exercise price at or above 100 % of fair market value at the close of business on the date of grant. Stock options expire 10 years after the date of grant and generally vest over three years . The Company issues new shares of common stock upon grant of restricted stock, when stock options are exercised, and when restricted stock units are vested and/or settled. The following table summarizes activity under the Plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan Shares ​ Weighted Average ​ ​ ​ ​ Available ​ Plan Options ​ Exercise Price ​ Aggregate ​ ​ for Grant ​ Outstanding ​ Per Share ​ Intrinsic Value Balance at January 1, 2023 92,862 14,086 ​ $ 14.17 ​ ​ ​ Cancelled or forfeited options 12,623 ( 12,623 ) ​ 14.02 ​ Balance at December 31, 2023 105,485 1,463 ​ 15.54 ​ Restricted stock units and awards granted ( 27,000 ) — ​ 5.64 ​ Cancelled or forfeited options 1,463 ( 1,463 ) ​ 15.54 ​ Balance at December 31, 2024 79,948 — ​ — ​ ​ Options outstanding under the Plans expired in May 2024. There were no options outstanding as of December 31, 2024. Options outstanding at December 31, 2023 had no intrinsic value. During the years ended December 31, 2024 and 2023, the Company did not issue any stock options. In May 2024, the Company issued a restricted stock grant totaling 27,000 shares to an employee. The shares underlying the awards were assigned a value of $ 5.64 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $ 152,000 . The shares vest equally over three years . F-21 Table of Contents Restricted stock and restricted stock unit transactions during the years ended December 31, 2024 and 2023 are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average ​ ​ Number of Shares ​ grant date fair value Unvested shares at January 1, 2023 5,869 ​ $ 9.21 Granted — ​ ​ Vested ( 5,869 ) ​ 7.66 Unvested shares at December 31, 2023 — ​ $ — Granted 27,000 ​ $ 5.64 Vested — ​ — Unvested shares at December 31, 2024 27,000 ​ $ 5.64 ​ As of December 31, 2024, there was $ 92,000 of unrecognized compensation costs related to outstanding restricted stock, which is expected to be recognized over the remaining average vesting period of approximately 2.4 years. ​ Employee Stock Purchase Plan. The Company has an Employee Stock Purchase Plan (the “ESPP”) that enables employees to contribute up to 10 % of their base compensation toward the purchase of the Company’s common stock at 85 % of its market value on the first or last day of the year. During the years ended December 31, 2024 and 2023, respectively, participants purchased zero and 338 shares under the ESPP. At December 31, 2024, 22,945 shares were reserved for future employee purchases of common stock under the ESPP. For the years ended December 31, 2024 and 2023, the Company recognized $-- 0 -- and $ 7,000 , respectively, of stock-based compensation expense related to the ESPP that was recognized in the continuing operations. Dividends. The Company has not historically paid dividends, other than one-time dividends declared in 2011 and 2016. The Company intends to retain earnings from operations for use in advancing our business strategy; however, the Company may consider special dividends in the future. 11. Related Party Note Payable On August 15, 2024, the Company entered into an unsecured Delayed Draw Term Note (the “Note”) with Air T Inc. (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 $ 2,500,000 to fund the Company’s operations. Air T Inc. 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 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 the Maturity Date. The entire principal amount outstanding on the Loans, together with accrued and unpaid interest thereon as set forth below, shall be due and payable in full on the earlier of (i) August 15, 2029, (ii) the Company’s receipt of a written demand by Air T delivered on or after February 15, 2026, and (iii) such earlier date as all principal owing thereunder becomes due and payable by acceleration or otherwise (the “ Maturity Date ”). The Company may prepay any Loan outstanding thereunder, together with accrued and unpaid interest on such Loan, at any time without prepayment or penalty. On September 27, 2024, we entered into an Amended and Restated Delayed Draw Term Note (the “ Amended Note ”) with Air T pursuant to which Air T has agreed to advance up to an additional $ 1,000,000 from time to time until August 15, 2026, but not on a revolving basis. The Amended Note provided for total borrowing of up to $ 3,500,000 to fund the Company’s operations. As of December 31, 2024, the Company had $ 3,500,000 outstanding under the Note and had incurred $ 69,000 of interest that is included in noncash paid in kind interest expense on the consolidated statement of cash flows. On January 15, 2025, the note was amended again to increase the total borrowing to $ 3,750,000 . As previously disclosed, amounts outstanding under the Amended Note bear interest at a fixed rate of 8.0 %, which may be increased by 3.0 % upon certain events of default. The Amended 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. No closing or origination fees will be paid to the Air T. F-22 Table of Contents 12. Leases. The Company is party to leasing contracts in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts include land, buildings, and equipment. Remaining lease terms range from 1 to 15 years with various term extension options available . The Company includes optional extension periods and early termination options in its lease term if it is reasonably likely that the Company will exercise an option to extend or terminate early. Operating lease right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term, at the later of the commencement date or business combination date. Because most of the Company’s leases do not provide an implicit rate of return, the discount rate is based on the collateralized borrowing rate of the Company, on a portfolio basis. As of December 31, 2024 and 2023, the Company leased space from a related party under a non-cancelable operating lease for its corporate headquarters. The lease has monthly payments of $ 375 through September 30, 2025. The lease does not include a renewal option. The weighted average remaining lease term and weighted average discount rate is as follows at: ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Weighted average remaining lease term (years) ​ Finance leases 4.2 ​ Operating leases 13.9 ​ Weighted average discount rate applied ​ Finance leases 5.5 % Operating leases 8.2 % ​ The components of lease expense from continuing operations are as follows within our consolidated statements of operations and comprehensive income (loss): ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 Operating lease expense: ​ Operating lease cost ​ $ 3,608,000 Short-term variable lease cost ​ 374,000 Finance lease expense: ​ Finance lease cost - amortization ​ 8,000 Finance lease cost - interest ​ ​ 2,000 Total lease expense ​ $ 3,992,000 ​ The components of lease expense from continuing operations and discontinued operations are as follows within our consolidated statements of operations and comprehensive income (loss): ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, 2023 Operating lease expense: ​ Related party lease ​ $ 3,000 Other ​ 14,000 Total lease expense ​ $ 17,000 Lease expense from discontinued operations ​ $ 14,000 ​ F-23 Table of Contents Supplemental cash flow information related to leases where the Company is the lessee is as follows: ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 Operating cash flows from operating leases ​ $ 2,330,000 Operating cash flows from finance leases ​ ​ 2,000 Financing cash flows from finance leases ​ 16,000 Leased assets obtained in exchange for operating lease liabilities ​ 34,289,000 Leased assets obtained in exchange for finance lease liabilities ​ 84,000 ​ As of December 31, 2024, the maturities of the operating and finance lease liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ending December 31, Operating Leases Finance Leases 2025 ​ $ 3,754,000 ​ $ 24,000 2026 ​ 3,826,000 ​ 13,000 2027 ​ 3,902,000 ​ 13,000 2028 ​ 3,804,000 ​ 13,000 2029 ​ 3,827,000 ​ 9,000 Thereafter ​ 38,081,000 ​ — Total Lease Payments ​ 57,194,000 ​ 72,000 Less discount to PV ​ ( 23,710,000 ) ​ ( 7,000 ) Lease liability balance ​ $ 33,484,000 ​ $ 65,000 ​ ​ 13. Income Taxes. Income tax (benefit) expense from continuing operations consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 2024 2023 State ​ $ 21,000 ​ $ 20,000 Foreign ​ ​ 730,000 ​ ​ — Total current tax expense ​ ​ 751,000 ​ ​ 20,000 Federal ​ ​ ( 2,731,000 ) ​ ​ — State ​ ​ ( 193,000 ) ​ ​ — Foreign ​ ​ ( 156,000 ) ​ ​ ​ Total deferred tax benefit ​ ​ ( 3,080,000 ) ​ ​ — Total income tax (benefit) expense ​ $ ( 2,329,000 ) ​ $ 20,000 ​ For the year ended December 31, 2024, the income tax benefit attributable to noncontrolling interest was $ 298,000 . Income tax (benefit) expense differs from the expected tax (benefit) expense computed by applying the U.S. federal corporate income tax rate of 21 % to loss from continuing operations before income taxes as a result of the following: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 2024 2023 ​ Federal statutory rate 21.0 % 21.0 % Stock-based awards — ( 0.5 ) ​ State income taxes 1.0 3.1 ​ Foreign income taxes ​ ( 0.6 ) ​ — ​ Permanent differences ​ ( 0.7 ) ​ — ​ Change in valuation allowance 5.4 ( 24.6 ) ​ Other ( 0.9 ) 0.3 ​ Effective income tax rate 25.2 % ( 0.7 ) % ​ F-24 Table of Contents Components of resulting noncurrent deferred tax assets (liabilities) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31 2024 2023 Deferred tax assets ​ ​ ​ ​ ​ ​ Accrued expenses ​ $ 57,000 ​ $ 117,000 Stock-based awards ​ — ​ 9,000 Reserve for bad debts ​ — ​ 2,000 Net operating loss and credit carryforwards ​ 1,968,000 ​ 529,000 Right of use liability ​ ​ 8,458,000 ​ ​ ​ Other ​ 665,000 ​ 2,000 Total deferred tax assets ​ $ 11,148,000 ​ $ 659,000 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities ​ ​ Depreciation ​ $ ( 2,207,000 ) ​ $ ( 5,000 ) Accrued expenses ​ ​ ( 1,530,000 ) ​ ​ — Intangible assets ​ ​ ( 6,581,000 ) ​ ​ — Right of use asset ​ ​ ( 8,321,000 ) ​ ​ — Prepaid expenses ​ — ​ ( 9,000 ) Other ​ ​ ( 7,000 ) ​ ​ — Total deferred tax liabilities ​ ( 18,646,000 ) ​ ( 14,000 ) ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities ​ ​ ( 7,498,000 ) ​ ​ 645,000 Valuation allowance ​ ​ ( 144,000 ) ​ ​ ( 645,000 ) Net deferred tax liabilities after valuation allowance ​ $ ( 7,642,000 ) ​ $ — ​ As of December 31, 2024, the Company had a Federal pre-tax net operating loss (NOL) to carry forward of approximately $ 8,110,000 and state pre-tax NOLs of approximately $ 7,185,000 to carry forward. The Federal NOLs can be carried forward indefinitely. The expiration of state NOLs carried forward varies by taxing jurisdiction. Future utilization of NOLs carried forward may be subject to certain limitations under Section 382 of the Internal Revenue Code. The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the year ended December 31, 2024 was a decrease of $ 501,000 . The decrease in the valuation allowance in 2024 related to the reversal of the valuation allowance on federal deferred tax assets due to the Company being in an overall deferred tax liability position. The Company’s valuation allowance as of December 31, 2024 was related to state NOLs that are not expected to be utilized. The Company has recorded a liability of $ 35,000 and $ 42,000 for uncertain tax positions taken on tax returns in previous years as of December 31, 2024 and 2023, respectively. This liability is reflected as accrued expenses and other current liabilities on the Company’s balance sheet. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $ 35,000 . The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2021 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2021 are no longer open in major state and local tax jurisdictions. The Company has recorded a decrease of approximately $ 8,000 in unrecognized tax benefits related to state exposure in the year ended 2024, which reduced accrued income taxes and increased the current income tax benefit. The Company determined it was no longer more likely than not that the Company would realize the tax expense. F-25 Table of Contents A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows: ​ ​ ​ ​ ​ Balance at December 31, 2022 $ 53,000 Decrease due to state tax expense ​ ( 16,000 ) Increases due to interest and state tax ​ 5,000 Balance at December 31, 2023 ​ $ 42,000 ​ ​ ​ ​ Decrease due to state tax expense ​ ​ ( 8,000 ) Increases due to interest and state tax ​ 1,000 Balance at December 31, 2024 ​ $ 35,000 ​ ​ 14. Commitments and Contingencies. Litigation. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. In the ordinary course of the business, the Company is subject to periodic legal or administrative proceedings. 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. Purchase Obligation. On July 1, 2023 the Company entered into an obligation with a third-party to purchase 25 % of their annual production of tulip bulbs through 2028 for $ 1,650,000 annually, totaling $ 8,000,000 over the duration of the agreement. In addition, the Company entered into a separate agreement with the same party to supply tulips to that party over a three-year period for a total of $ 360,000 . The Company will be paid in three sums of $ 120,000 beginning on March 1, 2026, with the final payment to be received on March 1, 2028. Other than this obligation, the Company has not had any material service or supply agreements that obligate the Company to make payments to vendors for an extended period of time. 15. Employee Benefit Plans. For all Dutch employees, the Company participates in defined contribution pension plans with an independent insurance company. Defined contributions are expensed in the year in which the related employee services are rendered. The Company makes contributions on behalf of all Dutch employees of which $ 77,000 was made and expensed for the year ended December 31, 2024. Eligible employees in the United States are able to participate in a 401K defined contribution plan. The Company incurred $ 36,000 in 401K expense for the year ended December 31, 2024. F-26 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures On November 20, 2023, the Audit Committee (the “Committee”) of the Board of Directors of the Company approved the dismissal of Baker Tilly US, LLP (“Baker Tilly”) as the Company’s independent registered public accounting firm, effective immediately. On November 20, 2023, the Committee approved the appointment of Boulay PLLP as the Company’s independent registered public accounting firm to perform independent audit services, including the audit of the Company’s consolidated financial statements for the fiscal year ending December 31, 2023. Our independent registered public accounting firms’ reports on our consolidated financial statements for each of the past two years did not contain adverse opinions or disclaimers of opinions, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. In connection with the audit of the Company’s financial statements for the fiscal years ended December 31, 2022, and the subsequent interim period through September 30, 2023, (i) there were no disagreements with Baker Tilly on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Baker Tilly’s satisfaction, would have caused Baker Tilly to make reference, in connection with its opinion, to the subject matter of such disagreements and (ii) there was no “reportable event” as defined in Item 304(a)(1)(v) of Regulation S-K.