TULP — FY2026 (Annual) Financial Report Analysis

Flat revenue, a 21% jump in bulb costs, and a full goodwill write-off: Bloomia's first year as a pure tulip company

Bloomia Holdings (Nasdaq: TULP) closed its fiscal year on June 30, 2026 with revenue essentially unchanged and a net loss of $11.2 million attributable to shareholders. Almost none of that loss came from the tulips themselves failing to sell. It came from three things stacking up in one year: the cost of the bulbs the company plants rose 21%, an unusual crop failure in the spring quarter destroyed stems that would have sold at peak-season prices, and the accountants wrote the acquisition goodwill down to zero.

This was the company's first full fiscal year under the Bloomia name. On January 28, 2026 the company — formerly Lendway, Inc. — renamed itself Bloomia Holdings, and on February 2, 2026 its shares stopped trading as "LDWY" and began trading as "TULP." It is also the first full twelve-month period reported on the new June 30 fiscal year-end, adopted effective June 30, 2025 to line up with Bloomia's growing season. That change created a six-month transition period (January–June 2025) in the audited statements, so the prior-year column below is management's unaudited twelve months ended June 30, 2025, taken from the MD&A. That is the only apples-to-apples comparison the filing provides, and it is worth knowing it has not been audited.

The underlying business: Bloomia buys tulip bulbs, grows them hydroponically, and sells fresh cut stems — over 90 million a year — mostly to large U.S. supermarket chains.

The numbers

Gross margin is the share of each sales dollar left after the direct cost of growing and shipping the product. Operating margin is what is left after that plus overhead — before interest and tax. A negative operating margin means the business lost money on its core operations before financing costs.

EPS for the unaudited twelve-month prior period is genuinely not disclosed in the filing, so it is left blank rather than estimated. For reference, the audited six-month transition period ended June 30, 2025 produced diluted EPS of $0.82.

What actually squeezed the margin

Revenue fell $312,000, or under 1%. The composition of that flat line matters more than the line itself. Management attributes the decline to lower stem sales — particularly in the fourth quarter of fiscal 2026 due to excess waste — partially offset by a 12% price increase over fiscal 2025 prices. So Bloomia sold meaningfully fewer stems and charged 12% more for them, and the two roughly cancelled out. Volume, not pricing, is the problem.

Gross profit fell 22% to $7.89 million, and margin dropped from 20.9% to 16.4%. The filing is unusually specific about why:

• Bulb costs rose 21% year over year. Bulbs are the single largest input. A 21% increase against a 12% price increase to customers means Bloomia recovered only part of the cost through pricing.
• The euro strengthened 6%, which further raised the dollar cost of bulbs — Bloomia buys from the Netherlands. This is a genuine currency effect, not an operational one, and it compounds the bulb-price increase rather than being separate from it.
• Excess waste of more than $2.5 million in the fourth quarter. This is the one-off. The company and, per the filing, "the rest of the industry" hit a problem in the spring 2026 Dutch bulb growing season tied to mite control treatment, which led to premature bulb aging. Management sized the excess by comparing waste rates in the first three fiscal quarters against the fourth, and notes the impact assumes all wasted stems could have been sold — a fair assumption given they were lost in the highest-demand quarter, and one that makes this a revenue loss as well as a cost.
• Working the other way, gross profit was helped by a $600,000 USDA grant that management does not expect to repeat in fiscal 2027. Strip that out and the underlying margin was worse than 16.4%.

Overhead was flat: sales, general and administrative expense of $11.59 million versus $11.46 million, with the small increase attributed to costs of the rights offering and deleveraging.

The impairments: an accounting reset, not a cash event

The $16.9 million operating loss is dominated by two non-cash write-downs taken in the fourth quarter, following the annual impairment test performed as of April 30, 2026:

• $11.12 million of goodwill, a full write-off. Goodwill is the premium paid above the value of identifiable assets when Bloomia was acquired in February 2024 for $53.4 million; it sits on the balance sheet until the business no longer supports that value. A third-party valuation using discounted cash flows found the carrying value of the reporting unit exceeded its fair value. The filing states the reason plainly: "Cash flows from Bloomia have been lower than the original deal model due primarily to higher bulb costs." Goodwill is now $0, down from $11.13 million.
• $2.04 million against the Bloomia trade name, an indefinite-lived intangible, valued by the relief-from-royalty method.

Neither charge consumes cash and neither affects the credit agreement's EBITDA-based covenants, but together they are a formal admission that the 2024 acquisition has not performed to the model. Excluding both, the operating loss would be roughly $3.7 million.

Below the operating line: the balance sheet got materially better

The financing side is where fiscal 2026 was genuinely constructive, and it pulls in the opposite direction from the operating result.

A rights offering — an offer letting existing shareholders buy new shares in proportion to what they already own — ran from February 2026 to April 1, 2026 and raised $12.1 million gross: about $5.0 million in cash and $7.1 million converted from outstanding related-party debt, issuing roughly 3.0 million shares at $4.05. The cash was used primarily for a $4.9 million initial payment toward a discounted prepayment on the Seller Note. In total the company converted $7.1 million of debt to equity and settled over $12 million of debt at a significant discount, producing a $7.0 million gain on settlement of debt — a real economic gain, but a non-operating, non-recurring one that cut the reported net loss roughly in half.

The result on the balance sheet, June 30, 2026 versus a year earlier:

Long-term debt came down $9.5 million. The cost was dilution: shares outstanding rose from 1.77 million to 4.83 million, up 173%. Existing holders own a much smaller slice of a much less indebted company.

Interest expense was nearly flat at $3.65 million versus $3.69 million — the savings from deleveraging arrived only in the fourth quarter and were offset by a higher revolving credit balance during the year.

Two other lines deserve flagging. The income tax benefit was only $579,000 on a $13.96 million pre-tax loss, an effective tax rate of 4.1%, against 42.1% in the prior twelve months. A low benefit rate on a large loss means the company is not booking the full tax value of those losses — the impairments are largely non-deductible or valuation-allowanced. And the $2.20 million of loss absorbed by the noncontrolling interest — the 18.6% of the operating subsidiary Tulp 24.1 that Bloomia Holdings does not own — is why the $13.38 million consolidated loss becomes $11.18 million at the shareholder line.

Cash and the credit agreement — the real constraint

Operations consumed $3.98 million of cash in fiscal 2026. Two items inside that are worth separating: $1.55 million of tariffs that were refunded in July 2026 (a timing item that reverses in fiscal 2027) and $1.88 million of cash interest. Financing provided $5.33 million, mostly the $5.01 million of rights-offering cash and $4.00 million of net revolver draws. Cash ended at just $1.45 million.

That thin cash position matters because of the covenant situation, which the filing discloses directly: the company breached its financial covenants under its Associated Bank credit agreement at December 31, 2025, March 31, 2026, and June 30, 2026 — three consecutive quarters. Each breach was waived. A covenant is a financial test a borrower must pass each quarter; failing one gives the lender the right to declare a default and demand immediate repayment.

A Waiver and Third Amendment signed September 16, 2026 — after year-end, five days before this 10-K was filed — reset the terms:

• Covenants were loosened to levels management believes it can meet: the maximum senior cash flow leverage ratio is set at 6.25x for the September 2026 quarter, 6.75x for December 2026, 6.25x for March 2027, then tightening sharply to 3.50x by June 2027 and 3.00x from September 2027.
• The revolving credit facility was temporarily increased from $6 million to $10 million through May 31, 2027, after which it reverts to $6 million absent a further amendment. Netherlands inventory stays eligible as borrowing-base collateral over the same window.
• The interest rate margin range was widened from 3.00%–4.00% to 3.00%–5.00%, and leverage for pricing purposes is now measured on "Unadjusted EBITDA" rather than EBITDA — both changes make the debt more expensive and harder to price down.
• The lender inserted a refinancing clock: if the debt has not been refinanced in full by January 31, 2027, a $100,000 monthly Refinance Fee begins accruing February 1, 2027. Refinance by May 31, 2027 and the accrued fees are waived; miss that date and $400,000 comes due in cash on June 1, 2027 (halved to $200,000 if the revolver balance is at or under $3 million), with $100,000 per month payable thereafter.

Management states it believes the company will have sufficient liquidity for at least twelve months and will comply with covenants over that period, while acknowledging that if results fall short it may need additional financing, further waivers, or liquidity-preserving measures. The auditor did not issue a going-concern qualification.

On the seasonal working-capital cycle: Bloomia buys bulbs between July and November and sells stems between January and June, with over 70% of annual revenue earned in the January–June half. As of September 2026 the company had committed to roughly $14 million of tulip bulb purchases payable between September 2026 and February 2027 — a large cash outflow landing before the selling season generates cash, and the reason the enlarged revolver matters.

Concentration

Four customers accounted for approximately 59% of fiscal 2026 revenue (20%, 18%, 11% and 10% individually), and three of them represented 26%, 16% and 10% of accounts receivable at year-end. There are no long-term purchase commitments, though management notes most significant customers have relationships exceeding five years. By channel, supermarkets contributed $40.18 million of the $48.13 million total, wholesalers $7.79 million, and other $0.16 million. Wholesale has been the growth channel — $7.79 million in fiscal 2026 against $2.52 million in calendar 2024 — but supermarkets remain 83% of the business.

Separately, Air T, Inc. beneficially owns roughly 34% of the outstanding stock and is part of a group holding about 60%, and was a lender whose debt was among that converted in the rights offering. Related-party financing is a structural feature here, not an incidental one.

Takeaway: The $11.2 million loss reads far worse than the operating reality, but the operating reality is still deteriorating — strip out the $13.2 million of non-cash impairments and the $7.0 million debt-settlement gain and Bloomia still ran a roughly $3.7 million operating loss on flat revenue, because a 21% rise in bulb costs and a euro 6% stronger outran a 12% price increase. The forward question is not whether the write-offs repeat; it is whether the fiscal 2027 bulb contracts, locked near fiscal 2025 rates, restore enough gross margin to clear a leverage covenant that steps down from 6.75x to 3.50x between December 2026 and June 2027 — with a refinancing fee clock starting February 2027 if the debt is not refinanced first.

Forward read

Management gives no revenue or earnings guidance, but makes two specific operational statements about fiscal 2027:

1. Bulb prices for fiscal 2027 have been contracted near fiscal 2025 rates, and management "expects margins to improve." Taken at face value, that reverses the single largest driver of this year's margin decline. If bulb costs return toward fiscal 2025 levels while the 12% price increase holds, gross margin should recover toward the 20%-plus range — the structurally important point, because Bloomia's fixed costs are largely covered at 20% margin and not at 16%.
2. The company has invested in new mite control treatment to reduce the waste that cost it over $2.5 million in the fourth quarter. This is a stated remedy to a problem management describes as industry-wide, which means it is neither certainly solved nor unique to Bloomia.

Offsetting those: the $600,000 USDA grant is not expected to recur, the $1.55 million tariff refund received in July 2026 is a one-time cash inflow rather than earnings, and the interest margin on the credit facility can now run up to 5.00% over SOFR rather than 4.00%.

My read: the fiscal 2027 setup is better than fiscal 2026 on every line that broke this year — input costs contracted lower, a stated fix for the waste problem, $9.5 million less long-term debt, and a revolver temporarily 67% larger. But the margin of safety is thin. Cash was $1.45 million at year-end against a $14 million bulb commitment due before the selling season, three consecutive covenant breaches are on the record, and the covenant schedule tightens hard in mid-2027 precisely when the temporary revolver increase and the Netherlands inventory eligibility both expire on May 31, 2027. The bull and bear cases hinge on the same variable: whether the spring 2027 growing season is clean. One more year like spring 2026 — with materially less balance-sheet room to absorb it — would likely force either the refinancing the lender is already pricing for or the $4 million-plus alternative capital raise the amendment contemplates.