Company: LDWY
Filing Date: 2025-08-28
Form Type: 10-KT
Source: 0001558370-25-011807
Chunk: 30

Company: LENDWAY, INC.
Filing Date: 2025-08-28
Form: 10-KT
Chunk 30
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 discontinued operations.

23

Gross Profit.Gross profit for calendar year 2024 was $6,509,000, or 17.2% as a percentage of revenue. Cost of goods sold includes rent for the facilities production facility and depreciation related to production. The one-time amortization charge related to inventory written up to fair value upon acquisition was $1,522,000 for calendar year 2024.

Gross margin percentage has historically been higher in the first and second quarters since sales are typically higher and allow better leverage of fixed costs in costs of goods sold.

Gross profit for calendar year 2023, was zero as revenue and costs are included in discontinued operations.

**Operating Expenses**

Sales, general and administrative.Sales, general and administrative expenses for calendar year 2024 were $13,226,000 compared to $3,519,000 for calendar year 2023. The increase was primarily due to the acquisition of Bloomia. Calendar year 2024 includes $1,542,000 of acquisition costs and $1,335,000 of integration related costs.

Interest Expense and Income.Interest expense, net, for calendar year 2024, was $2,969,000 compared to interest income of $518,000 for calendar year 2023. In connection with the Bloomia acquisition, the Company began incurring interest expenses starting February 21, 2024. The Company did not have debt in the prior year. The Company has not hedged the risk of its interest expense. If the Term SOFR reference rate increases, the Company’s interest expense on its term loan and revolving credit facility will increase.

Income Taxes.For calendar year 2024, the Company recorded an income tax benefit of $2,329,000, with a corresponding effective tax rate of 25.2%, on loss from continuing operations. For calendar year 2023, the Company recorded income tax expense of $20,000, with a corresponding effective tax rate of (0.7)%, on loss from continuing operations.

During the first quarter of calendar year 2024, the Company established deferred tax liabilities related to the acquisition in the majority ownership of Bloomia. The Company anticipates that the deferred tax liabilities will result in future taxable income that will allow for the realization of the federal deferred tax assets.

See Note 14 to the consolidated financial statements appearing in Part II, Item 8 of this Transition Report on Form 10-KT.

Income from Discontinued Operations, Net of Tax.For calendar year