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Item 1. Financial Statements

2024-07-25 compared with 2024-01-09 · 920 added, 694 removed, 153 unchanged (91% of the section changed)

FINANCIAL STATEMENTS (UNAUDITED)

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value per share amounts)

September 30,

HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

thousands, except par value per share amounts)

March 31, 2024

December 31, 2023

Current assets

Cash $ 2,443 $ 6,458

Restricted cash — 5,718

Accounts receivable, net of allowance of $ 4,208 and $ 4,826 at September 30, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowance of $ 2,202 and $ 2,209 at March 31, 2024 and December 31, 2023, respectively

Inventories, net

4 unchanged sentences

Operating lease right-of-use assets

Other assets 5,539 5,578

Total assets $ 48,448 $ 89,685

Current liabilities

2 unchanged sentences

Customer deposits

Current portion of notes payable (Note 6) 6,978 3,185

Current portion of notes payable

Current portion of operating leases

1 unchanged sentence

Total current liabilities

Notes payable, less current portion and debt issuance costs, net (Note 6) — 13,040

Operating leases, less current portion

Finance leases, less current portion — 29

Other liabilities

4 unchanged sentences

Preferred stock, $ 0.0001 par value, 10,000 shares authorized, none issued and outstanding

Class A common stock, $ 0.01 par value per share, 600,000 shares authorized;

3,448 shares issued and outstanding as of September 30, 2023;

1,599 shares issued and outstanding as of December 31, 2022*

Class B common stock, $ 0.0001 par value per share, 30,000 shares authorized;

0 shares issued and outstanding as of September 30, 2023;

0 shares issued and outstanding as of December 31, 2022*

Class A common stock, $ 0.01 par value per share, 600,000 shares authorized, 4,324 shares issued and outstanding as of March 31, 2024;

600,000 shares authorized, 3,726 shares issued and outstanding as of December 31, 2023

Class B common stock, $ 0.0001 par value per share, 30,000 shares authorized, and 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023

Common stock, value

Additional paid-in capital

2 unchanged sentences

Total stockholders’ equity attributable to Greenlane Holdings, Inc.

15,420 38,973

Non-controlling interest

1 unchanged sentence

Total liabilities and stockholders’ equity

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

Net sales $ 11,800 $ 28,680 $ 55,384 $ 115,130

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands, except per share amounts)

Three months ended March 31,

Cost of sales

Gross profit 3,129 4,969 13,222 19,036

Operating expenses:

1 unchanged sentence

General and administrative

Goodwill and indefinite-lived intangibles impairment — 66,760 — 66,760

Definite-lived intangibles impairment charge — 50,694 — 50,694

Property and equipment impairment charge

— 7,336 — 7,336

Depreciation and amortization

4 unchanged sentences

Other income (expense), net

Total other income (expense), net ( 3,211 ) 247 ( 4,810 ) ( 1,036 )

Total other expense, net

Loss before income taxes

Provision for (benefit from) income taxes

Net loss ( 10,098 ) ( 137,245 ) ( 27,869 ) ( 170,475 )

Net loss attributable to non-controlling

19 ( 6,742 ) ( 27 ) ( 12,516 )

Net loss attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

$ ( 10,117 ) $ ( 130,503 ) $ ( 27,842 ) $ ( 157,959 )

Net loss attributable to Class A common stock per share - basic and diluted (Note 9)

$ ( 1.91 ) $ ( 198.51 ) $ ( 9.67 ) $ ( 277.41 )

Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 9)

5,513 657 2,918 569

Other comprehensive income (loss):

Other comprehensive income:

Foreign currency translation adjustments

Unrealized gain (loss) on derivative instrument — — — 358

Comprehensive loss

( 10,122 ) ( 137,483 ) ( 27,688 ) ( 170,329 )

Comprehensive loss attributable to non-controlling interest

— ( 6,742 ) ( 8 ) ( 12,430 )

Comprehensive loss attributable to Greenlane Holdings, Inc.

$ ( 10,122 ) $ ( 130,741 ) $ ( 27,680 ) $ ( 157,899 )

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

Common Stock Class B

Common Stock Additional

Capital* Accumulated

Deficit Accumulated

Comprehensive

Income (Loss) Non-

Interest Total

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Other Comprehensive

Stockholders’

Shares* Amount* Shares* Amount*

Balance December 31, 2022 1,599 $ 15 — $ — $ 264,017 $ ( 225,114 ) $ 55 $ 18 $ 38,991

December 31, 2023

$ ( 257,289 )

Equity-based compensation — — — — 110 — — 110

Issuance of Class A shares - Amended Eyce APA (Note 3) — — — — 95 — — — 95

Other comprehensive income — — — — — — 178 — 178

Balance March 31, 2023 1,599 15 — — 264,222 ( 233,807 ) 233 ( 36 ) 30,627

of Class A shares - (Note 9)

comprehensive income

March 31, 2024

$ ( 261,780 )

Equity-based compensation forfeiture, net ( 1 ) — — — ( 11 ) — — — ( 11 )

Issuance of Class A shares - Amended Eyce APA (Note 3) — — — — 65 — — — 65

Other comprehensive income (loss) — — — — — — 27 — 27

Balance June 30, 2023 1,598 15 — — 264,276 ( 242,839 ) 260 ( 28 ) 21,684

Net (loss) income — — — — — ( 10,117 ) — 19 ( 10,098 )

Equity-based compensation — — — — ( 70 ) — — — ( 70 )

Issuance of Class A shares - Amended Eyce APA (Note 3) — — — — 65 — — — 65

Issuance of Class A shares (Note 9) 1,850 18 — — 3,834 — — — 3,852

Other comprehensive income (loss) — — — — — — ( 22 ) — ( 22 )

Balance Balance September 30, 2023 3,448 $ 33 — $ — $ 268,105 $ ( 252,956 ) $ 238 $ ( 9 ) $ 15,411

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

The accompanying notes are an integral part of these consolidated financial statements.

Common Stock Class B

Common Stock Additional

Capital* Accumulated

Deficit Accumulated

Comprehensive

Income (Loss) Non-

Interest Total

Stockholders’

Shares* Amount* Shares* Amount*

Balance December 31, 2021 426 $ 4 109 $ — $ 229,744 $ ( 55,544 ) $ 324 $ 21,836 $ 196,364

Net loss — — — — — ( 15,332 ) — ( 3,417 ) ( 18,749 )

Equity-based compensation 9 — — — 730 — — 172 902

Issuance of Class A shares, net of costs - ATM Program 56 1 — — 6,800 — — — 6,801

Issuance of Class A shares - contingent consideration 19 — — — 3,486 — — — 3,486

Exchanges of noncontrolling interest for Class A common stock 3 — ( 3 ) — 543 — — ( 543 ) —

Other comprehensive income — — — — — — 361 85 446

Balance March 31, 2022 513 5 106 — 241,303 ( 70,876 ) 685 18,133 189,250

Net loss — — — — — ( 12,124 ) — ( 2,357 ) ( 14,481 )

Equity-based compensation — — — — 371 — — 75 446

Issuance of Class A shares, net of costs - ATM Program 30 — — — 2,224 — — — 2,224

Issuance of Class A shares, net of costs - June 2022 Offering 59 1 — — 5,039 — — — 5,040

Issuance of Class A shares - Amended Eyce APA (Note 3) 7 — — — 310 — — — 310

Reclassification adjustment for gain included in net loss (Note 4) — — — — — — ( 332 ) — ( 332 )

Other comprehensive income (loss) — — — — — — ( 62 ) — ( 62 )

Balance June 30, 2022 609 6 106 — 249,247 ( 83,000 ) 291 15,851 182,395

December 31, 2022

$ ( 225,114 )

Equity-based compensation ( 2 ) — — — 175 — — 10 185

Issuance of Class A shares - Amended Eyce APA (Note 3) — — — — 206 — — — 206

Issuance of Class A shares - Prefunded warrants exercise (Note 9) 49 — — — — — — — —

Exchanges of noncontrolling interest for Class A common stock 91 1 ( 91 ) — 9,747 — — ( 9,748 ) —

VIBES disposition / deconsolidation (Note 3) — — — — — — — ( 1,789 ) ( 1,789 )

Other comprehensive income (loss) — — — — — — ( 238 ) — ( 238 )

'Balance September 30, 2022

$ ( 225,114 )

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(in thousands)

Nine months ended September 30,

Cash flows from operating activities:

Net loss (including amounts attributable to non-controlling interest) $ ( 27,869 ) $ ( 170,475 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 1,492 6,876

Equity-based compensation expense 255 2,020

Goodwill and indefinite-lived intangibles impairment charge — 66,760

Definite-lived intangibles impairment charge — 50,694

Property and equipment impairment charge

Change in fair value of contingent consideration 103 ( 1,197 )

Change in provision for doubtful accounts ( 154 ) 2,637

Gain related to indemnification asset — ( 2,018 )

(Gain) loss on disposal of fixed assets — 820

(Gain) loss on disposal of held-for-sale assets — ( 780 )

Gain related to VIBES disposition / deconsolidation (Note 3) — ( 2,062 )

Unrealized loss on equity investments — 1,214

Realized (gain) loss on interest rate swap contract — ( 408 )

Amortization of deferred financing costs and debt discount 2,711 446

Other ( 17 ) ( 17 )

Changes in operating assets and liabilities, net of the effects of acquisitions:

Decrease (increase) in accounts receivable 4,697 247

Decrease (increase) in inventories 18,005 19,044

Decrease (increase) in vendor deposits 2,945 5,027

Decrease (increase) in other current assets 3,968 1,257

(Decrease) increase in accounts payable ( 3,121 ) ( 5,384 )

(Decrease) Increase in accrued expenses and other liabilities ( 250 ) ( 1,124 )

(Decrease) increase in customer deposits ( 1,573 ) ( 3,401 )

Net cash (used in) provided by operating activities

of Class A shares - Amended Eyce APA (Note 3)

comprehensive income

March 31, 2023

$ ( 233,807 )

Cash flows from investing activities:

Proceeds from VIBES disposition (Note 3) — 4,567

Purchases of property and equipment, net ( 633 ) ( 1,660 )

Proceeds from the sale of equity investments 53 —

Proceeds from sale of assets held for sale — 9,593

Net cash provided by (used in) investing activities ( 580 ) 12,500

Cash flows from financing activities:

Proceeds from issuance of Class A common stock, net of costs 3,852 14,064

Proceeds from (repayment of) Asset-Based Loan

$ ( 233,807 )

Proceeds from Secured Bridge Loan, net of costs

Debt issuance costs ( 751 ) ( 1,472 )

Repayment of loan against future accounts receivable

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

the three months ended March 31,

flows from operating activities:

loss (including amounts attributable to non-controlling interest)

to reconcile net loss to net cash used in operating activities:

and amortization

compensation expense

in provision for doubtful accounts

in operating assets and liabilities, net of the effects of acquisitions:

in accounts receivable

in inventories

(increase) in vendor deposits

in other current assets

in accounts payable

in accrued expenses and other liabilities

in customer deposits

cash (used in) provided by operating activities

flows from investing activities:

of property and equipment, net

from sale of assets held for sale

cash used in investing activities

flows from financing activities:

on Eyce and DaVinci promissory notes

of Asset-Based Loan

costs of Asset-Based Loan

Proceeds from future receivables financing

Payments on Eyce and DaVinci promissory notes ( 2,539 ) ( 2,791 )

Payments on Real Estate Note — ( 7,958 )

Repayment of Bridge Loan — ( 8,000 )

Proceeds from termination of interest rate swap — 145

Purchase consideration paid for Eyce and DaVinci acquisition ( 300 ) ( 875 )

Other ( 29 ) ( 128 )

Net cash provided by financing activities ( 10,528 ) 7,535

Effects of exchange rate changes on cash and restricted cash 183 ( 210 )

Net (decrease) in cash and restricted cash ( 9,733 ) ( 2,663 )

Cash and restricted cash, as of beginning of the period 12,176 12,857

Cash and restricted cash, as of end of the period $ 2,443 $ 10,194

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Reconciliation of cash and restricted cash to condensed consolidated balance sheets

Nine months ended September 30,

Beginning of the period

Cash $ 6,458 $ 12,857

Restricted cash 5,718 —

Total cash and restricted cash, beginning of period $ 12,176 $ 12,857

End of the period

Cash $ 2,443 $ 8,039

Restricted cash — 2,155

Total cash and restricted cash, end of period $ 2,443 $ 10,194

Supplemental disclosures of cash flow information

Cash paid during the period for interest $ ( 4,495 ) $ ( 1,598 )

Cash paid for amounts included in the measurement of lease liabilities $ 1,353 $ 2,120

Non-cash investing and financing activities:

Non-cash purchases of property and equipment $ 133 $ 1,617

Issuance of Class A common stock for business acquisitions $ — $ 3,486

Decrease in non-controlling interest as a result of exchanges for Class A common stock $ — $ ( 10,291 )

Decrease in non-controlling interest as a result of VIBES disposition $ — $ ( 1,789 )

Transfer from contingent consideration to notes payable $ 1,150 $ —

Transfer from accrued expenses to notes payable $ 437 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of loan against future accounts receivable

cash used in financing activities

of exchange rate changes on cash

decrease in cash

and restricted cash, as of beginning of the period

and restricted cash, as of end of the period

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Reconciliation

of cash and restricted cash to consolidated balance sheets

the three months ended March 31,

of the period

cash and restricted cash, beginning of period

of the period

cash and restricted cash, end of period

disclosures of cash flow information

paid for interest

paid for amounts included in the measurement of lease liabilities

investing and financing activities:

purchases of property and equipment

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOLDINGS, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS OPERATIONS AND ORGANIZATION

Greenlane Holdings, Inc.

(“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, "we", "us", and "our") was formed as a Delaware corporation on May 2, 2018.

We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”) of shares of our Class A common stock, $ 0.01 par value per share (“Class A common stock”), in order to carry on the business of Greenlane Holdings, LLC (the “Operating Company”).

The Operating Company was organized under the laws of the state of Delaware on September 1, 2015, and is based in Boca Raton, Florida.

Unless the context otherwise requires, references to the “Company” refer to us, and our consolidated subsidiaries, including the Operating Company.

We merchandise premium cannabis accessories, child-resistant packaging, specialty vaporization solutions and lifestyle products in the United States, Canada, Europe and Latin America, serving a diverse and expansive customer base with thousands of retail locations, licensed cannabis dispensaries, smoke shops, multi-state operators (“MSOs”), specialty retailers, and retail consumers through both our e-commerce platforms and our flagship Higher Standards store in New York City’s famed Chelsea Market.

We have been developing a world-class portfolio of our own proprietary brands (the "Greenlane Brands") that we believe will, over time, deliver higher margins and create long-term value for our customers and shareholders.

Our wholly-owned Greenlane Brands includes Groove – our recently launched more affordable product line, Eyce – our innovative silicone pipes and accessories line, DaVinci – our best-in-class premium vaporizer brand, and Higher Standards – our premium smoke shop and ancillary product brand.

We also have category exclusive licenses for the premium Marley Natural branded products, as well as the K.Haring branded products.

We are the sole manager of the Operating Company and our principal asset is Common Units of the Operating Company (“Common Units”).

As the sole manager of the Operating Company, we operate and control all of the business and affairs of the Operating Company, and we conduct our business through the Operating Company and its subsidiaries.

We have a board of directors and executive officers, but no employees.

Holdings, Inc.

(“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries,

the “Company”, “we”, “us”, and “our”) was formed as a Delaware corporation on May 2,

We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”)

of shares of our Class A common stock, $ 0.01 par value per share (“Class A common stock”), in order to carry on the business

of Greenlane Holdings, LLC (the “Operating Company”).

The Operating Company was organized under the laws of the state of

Delaware on September 1, 2015, and is based in Boca Raton, Florida.

Unless the context otherwise requires, references to the “Company”

refer to us, and our consolidated subsidiaries, including the Operating Company.

We merchandise premium cannabis accessories, child-resistant

packaging, specialty vaporization solutions and lifestyle products in the United States, Canada, Europe and Latin America, serving a diverse

and expansive customer base with thousands of retail locations, licensed cannabis dispensaries, smoke shops, multi-state operators (“MSOs”),

specialty retailers, and retail consumers.

We have been developing a portfolio of our own proprietary

brands (the “Greenlane Brands”) that we believe will, over time, deliver higher margins and create long-term value for our

customers and shareholders.

Our wholly-owned Greenlane Brands includes Groove – our more affordable product line and Higher Standards

– our premium smoke shop and ancillary product brand, and our award winning Vapor.com website and brand.

We also have category exclusive

licenses for the premium Marley Natural branded products, as well as the K.Haring branded products.

are the sole manager of the Operating Company and our principal asset is Common Units of the Operating Company (“Common Units”).

As the sole manager of the Operating Company, we operate and control all of the business and affairs of the Operating Company, and we

conduct our business through the Operating Company and its subsidiaries.

We have a board of directors and executive officers, but no

All of our assets are held and all of the employees are employed by wholly owned subsidiaries of the Operating Company.

We have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of, and receive benefits from, the Operating Company, that could be significant.

We determined that the Operating Company is a variable interest entity (“VIE”) and that we are the primary beneficiary of the Operating Company.

Accordingly, pursuant to the VIE accounting model, beginning in the fiscal quarter ended June 30, 2019, we consolidated the Operating Company in our consolidated financial statements and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common Units held by us) on our consolidated financial statements.

On August 31, 2021, we completed our previously announced merger with KushCo Holdings, Inc.

("KushCo") and have included the results of operations of KushCo in our consolidated statements of operations and comprehensive loss from that date forward.

In connection with the merger with KushCo, the Greenlane Certificate of Incorporation was amended and restated (the “A&R Charter”) in order to (i) increase the number of authorized shares of Greenlane Class B common stock, $ 0.0001 par value per share (the “Class B common stock”), from 10 million shares to 30 million shares in order to effect the conversion of each outstanding share of Class C common stock, $ 0.0001 par value per share (the “Class C common stock”), into one-third of one share of Class B common stock, (ii) increase the number of authorized shares of Class A common stock from 125 million shares to 600 million shares, and (iii) eliminate references to the Class C common stock.

Pursuant to the terms of an Agreement and Plan of Merger, dated as of March 31, 2021 (the "Merger Agreement") with KushCo, immediately prior to the consummation of the business combination, holders of Class C common stock received one-third of one share of Class B common stock for each share of Class C common stock held immediately prior to the closing of the merger.

Our corporate structure is commonly referred to as an “Up-C” structure.

The Up-C structure allows the Operating Company to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity.

One of these benefits is that future taxable income of the Operating Company that is allocated to its members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the Operating Company entity level.

Additionally, because a member may redeem their Common Units for shares of Class A common stock on a one -for-one basis or, at our option, for cash, the Up-C structure also provides the member with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded.

In connection with the IPO, we entered into a Tax Receivable Agreement (the “TRA”) with the Operating Company and the Operating Company’s members and a Registration Rights Agreement (the “Registration Rights Agreement”) with the Operating

Company’s members.

The TRA provides for the payment by us to the Operating Company’s member(s) of 85.0 % of the amount of tax benefits, if any, that we may actually realize (or in some cases, are deemed to realize) as a result of (i) the step-up in tax basis in our share of the Operating Company's assets resulting from the redemption of Common Units under the mechanism described above and (ii) certain other tax benefits attributable to payments made under the TRA.

Pursuant to the Registration Rights Agreement, we have agreed to register the resale of shares of Class A common stock that are issuable to the Operating Company’s members upon redemption or exchange of their Common Units.

The A&R Charter and the Fourth Amended and Restated Operating Agreement of the Operating Company (the “Operating Agreement”) require that (a) we at all times maintain a ratio of one Common Unit owned by us for each share of our Class A common stock issued by us (subject to certain exceptions), and (b) the Operating Company at all times maintains (i) a one -to-one ratio between the number of shares of our Class A common stock issued by us and the number of Common Units owned by us, and (ii) a one -to-one ratio between the number of shares of our Class B common stock owned by the non-founder members of the Operating Company and the number of Common Units owned by the non-founder members of the Operating Company.

As of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common stock, and we owned 100 % of the voting and economic interests in Greenlane through the holders' ownership of Class A common stock.

See "Note 9 - Stockholder's Equity."

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting.

Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

As such, the information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Amendment No.

1 to our Annual Report on Form 10-K/A for the year ended December 31, 2022.

The condensed consolidated results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other future annual or interim period.

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair statement of the Company's financial position and operating results.

Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year.

Principles of Consolidation

Our condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating Company's consolidated subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Splits

On August 4, 2022, we filed a Certificate of Amendment to the A&R Charter with the Secretary of State for the State of Delaware (the "SSSD"), which effected a one-for-twenty reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock") at 5:01 PM Eastern Time on August 9, 2022.

As a result of the 2022 Reverse Stock Split, every 20 shares of Common Stock issued and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the 2022 Reverse Stock Split.

On June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected a one-for-ten reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse Stock Split, the "Reverse Stock Splits") of our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 5, 2023.

As a result of the 2023 Reverse Stock Split, every ten shares of common stock issued and outstanding were converted into one share of common stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the 2023 Reverse Stock Split.

The Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

All outstanding options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our Common Stock have been adjusted as a result of the Reverse Stock Splits, as required by the terms of each security.

The number of shares available to be awarded under our Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted.

See "Note 10 — Compensation Plans" for more information.

All share and per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital.

Liquidity and Going Concern

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.

Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued.

In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.

Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs.

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from equity issuances, such as our June 2022, October 2022 and July 2023 Offerings, and our ATM program, each as described and defined below.

ATM Program and Shelf Registration Statement

While we have an effective shelf registration statement on Form S-3 (the "Shelf Registration Statement") to conduct securities offerings from time to time, for so long as our public float is less than $75 million, our ability to utilize the Shelf Registration Statement to raise capital is limited, as further described below.

The Shelf Registration Statement registers the offer and sale of shares of our Class A common stock, preferred stock, $ 0.0001 par value per share (the "preferred stock"), depository shares representing our preferred stock, warrants to purchase shares of our Class A common stock, preferred stock or depository shares, and rights to purchase shares of our Class A common stock or preferred stock that may be issued by us in a maximum aggregate amount of up to $ 200 million.

In August 2021, we filed a prospectus supplement and established an "at-the-market" equity offering program (the "ATM Program") that provides for the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time.

However, we may be unable to access the capital markets because of current market volatility and the performance of our stock price.

On March 31, 2022, the date on which our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the "2021 Annual Report") was filed with the SEC, the Shelf Registration Statement became subject to the offering limits set forth in Instruction I.B.6 because our public float was less than $75 million.

For so long as our public float is less than $75 million, the aggregate market value of securities sold by us under the Shelf Registration Statement (including our ATM Program) pursuant to Instruction I.B.6 during any 12 consecutive months may not exceed one-third of our public float.

Since the launch of the ATM program in August 2021 and through December 31, 2022, we sold shares of our Class A common stock which generated gross proceeds of approximately $ 12.7 million and we paid fees to the sales agent of approximately $ 0.4 million.

In light of our low cash position, we have been forced to sell stock under our ATM program at prices that may not otherwise be attractive and are dilutive.

We have sold $ 2.2 million in securities pursuant to Instruction I.B.6 in the 12 calendar months preceding the date of filing of this Quarterly Report on Form 10-Q.

Due to the untimely filing of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 we are unable to issue additional shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement for a period of 12 months, which will limit our liquidity options in the capital markets.

Common Stock and Warrant Offerings

On June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and sell an aggregate of 58,500 shares of our Class A common stock, pre-funded warrants to purchase up to 49,500 shares of our Class A common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 108,000 shares of our Class A common stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”), in a registered direct offering (the “June 2022 Offering”).

The June 2022 Offering generated gross proceeds of approximately $ 5.4 million and net proceeds to the Company of approximately $ 5.0 million.

All June 2022 Pre-Funded Warrants were exercised in July 2022, for de minimis net proceeds.

On October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 695,555 shares of our Class A common stock, pre-funded warrants to purchase up to 137,778 shares of our Class A Common Stock (the "October 2022 Pre-Funded Warrants") and warrants to purchase up to 1,666,667 shares of our Class A common stock (the "October 2022 Standard Warrants").

The October 2022 units were offered pursuant to

a Registration Statement on Form S-1 (the "October 2022 Offering").

The October 2022 Offering generated gross proceeds of approximately $ 7.5 million and net proceeds to the Company of approximately $ 6.8 million.

On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A Common Stock (the "July 2023 Pre-Funded Warrants") and warrants to purchase up to 8,095,238 shares of our Class A common stock (the "July 2023 Standard Warrants").

The July 2023 units were offered pursuant to a Registration Statement on Form S-1 (the "July 2023 Offering").

The July 2023 Offering generated gross proceeds of approximately $ 4.3 million and net proceeds to the Company of approximately $ 3.8 million and closed on July 3, 2023.

Asset-Based Loan

On August 9, 2022, we entered into an asset-based loan agreement dated as of August 8, 2022 (the “Loan Agreement”), which made available to the Company a term loan of up to $ 15.0 million.

have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of,

and receive benefits from, the Operating Company, that could be significant.

We determined that the Operating Company is a variable interest

entity (“VIE”) and that we are the primary beneficiary of the Operating Company.

Accordingly, pursuant to the VIE accounting

model, beginning in the fiscal quarter ended June 30, 2019, we consolidated the Operating Company in our consolidated financial statements

and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common

Units held by us) on our consolidated financial statements.

August 31, 2021, we completed our merger with KushCo Holdings, Inc.

(“KushCo”) and have included the

results of operations of KushCo in our consolidated statements of operations and comprehensive loss from that date forward.

In connection

with the merger with KushCo, the Greenlane Certificate of Incorporation was amended and restated (the “A&R Charter”)

in order to (i) increase the number of authorized shares of Greenlane Class B common stock, $ 0.0001 par value per share (the “Class

B Common stock”), from 10 million shares to 30 million shares in order to effect the conversion of each outstanding share of Class

C common stock, $ 0.0001 par value per share (the “Class C common stock”), into one-third of one share of Class B common stock,

(ii) increase the number of authorized shares of Class A common stock from 125 million shares to 600 million shares, and (iii) eliminate

references to the Class C common stock.

Pursuant to the terms of an Agreement and Plan of Merger, dated as of March 31, 2021 (the “Merger

Agreement”) with KushCo, immediately prior to the consummation of the business combination, holders of Class C common stock received

one-third of one share of Class B common stock for each share of Class C common stock held immediately prior to the closing of the merger.

corporate structure is commonly referred to as an “Up-C” structure.

The Up-C structure allows the Operating Company to continue

to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through”

One of these benefits is that future taxable income of the Operating Company that is allocated to its members will be taxed on

a flow-through basis and therefore will not be subject to corporate taxes at the Operating Company entity level.

Additionally, because

a member may redeem their Common Units for shares of Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C

structure also provides the member with potential liquidity that holders of non-publicly traded limited liability companies are not typically

connection with the IPO, we entered into a Tax Receivable Agreement (the “TRA”) with the Operating Company and the Operating

Company’s members and a Registration Rights Agreement (the “Registration Rights Agreement”) with the Operating Company’s

The TRA provides for the payment by us to the Operating Company’s member(s) of 85.0 % of the amount of tax benefits, if

any, that we may actually realize (or in some cases, are deemed to realize) as a result of (i) the step-up in tax basis in our share

of the Operating Company’s assets resulting from the redemption of Common Units under the mechanism described above and (ii) certain

other tax benefits attributable to payments made under the TRA.

Pursuant to the Registration Rights Agreement, we have agreed to register

the resale of shares of Class A common stock that are issuable to the Operating Company’s members upon redemption or exchange of

their Common Units.

A&R Charter and the Fourth Amended and Restated Operating Agreement of the Operating Company (the “Operating Agreement”)

require that (a) we at all times maintain a ratio of one Common Unit owned by us for each share of our Class A common stock issued by

us (subject to certain exceptions), and (b) the Operating Company at all times maintains (i) a one-to-one ratio between the number of

shares of our Class A common stock issued by us and the number of Common Units owned by us, and (ii) a one-to-one ratio between the number

of shares of our Class B common stock owned by the non-founder members of the Operating Company and the number of Common Units owned

by the non-founder members of the Operating Company.

of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common stock,

and we owned 100 % of the voting and economic interests in Greenlane through the holders’ ownership of Class A common stock.

“Note 9 - Stockholder’s Equity.”

August 4, 2022, we filed a Certificate of Amendment (the

“Certificate of Amendment”) to the A&R Charter with the Secretary of State of the

State for Delaware (the “SSSD”), which effected a one-for-twenty reverse stock split (the “2022 Reverse Stock Split”)

of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the “Common Stock”)

at 5:01 PM Eastern Time on August 9, 2022.

As a result of the 2022 Reverse Stock Split, every 20 shares of Common Stock issued and outstanding

were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were

issued in connection with the 2022 Reverse Stock Split.

June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected a one-for-ten reverse stock split

(the “2023 Reverse Stock Split” and together with the 2022 Reverse Stock Split, the “Reverse Stock Splits”) of

our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 5, 2023.

As a result of the 2023 Reverse Stock Split,

every ten shares of common stock issued and outstanding were converted into one share of common stock.

We paid cash in lieu of fractional

shares, and accordingly, no fractional shares were issued in connection with the 2023 Reverse Stock Split.

Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

All outstanding

options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our

Common Stock have been adjusted as a result of the Reverse Stock Splits, as required by the terms of each security.

The number of shares

available to be awarded under our Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted.

10 — Compensation Plans” for more information.

share and per share amounts in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods

presented to give effect to the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of Common

Stock to additional paid-in capital.

and Going Concern

to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether

there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue

as a going concern for one year after the date that these condensed consolidated financial statements are issued.

In accordance with

ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been

fully implemented as of the issuance date if (a) it is probable that management’s plans will be effectively implemented on a timely

basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial

doubt about the Company’s ability to continue as a going concern.

primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds

other equity issuances.

believe that our cash on hand and the cash flow that we generate from our operations will not be sufficient to fund our working capital

and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations,

for the next 12 months.

Based on our cash on hand and working capital at March 31, 2024, we may have insufficient cash to fund planned

operations into the third quarter of 2024.

This is evident from our continued efforts to raise capital and leverage external funding

to fulfil our capital needs.

Program and Shelf Registration Statement

formerly used a shelf registration statement on Form S-3 (the “Shelf Registr ation

Statement”) to conduct securities offerings from time to time in order to meet our liquidity needs.

In August 2021, we filed a

prospectus supplement and established an “at-the-market” equity offering program (the “ATM Program”) that provided

for the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time.

the launch of the ATM program in August 2021 and through December 31, 2022, we sold shares of our Class A common stock which generated

gross proceeds of approximately $ 12.7 million and we paid fees to the sales agent of approximately $ 0.4 million.

Due to the untimely

filing of certain of our Quarterly and Annual Reports 3, we are unable to issue additional shares of Class A common stock pursuant to

the ATM Program or otherwise use the Shelf Registration Statement, which will limit our liquidity options in the capital markets.

Stock and Warrant Offerings.

June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and

sell an aggregate of 585,000 shares of our Class A common stock, pre-funded warrants to purchase up to 495,000 shares of our Class A

common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 1,080,000 shares of our Class A common

stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”),

in a registered direct offering (the “June 2022 Offering”).

The June 2022 Offering generated gross proceeds of approximately

$ 5.4 million and net proceeds to the Company of approximately $ 5.0 million.

All June 2022 Pre-Funded Warrants were exercised in July

2022, for de minimis net proceeds.

October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell

an aggregate of 695,555 shares of our Class A common stock, pre-funded warrants to purchase up to 137,778 shares of our Class A Common

Stock (the “October 2022 Pre-Funded Warrants”) and warrants to purchase up to 1,666,667 shares of our Class A common stock

(the “October 2022 Standard Warrants”).

The October 2022 units were offered pursuant to a Registration Statement on Form

S-1 (the “October 2022 Offering”).

The October 2022 Offering generated gross proceeds of approximately $ 7.5 million and net

proceeds to the Company of approximately $ 6.8 million.

June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an

aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A Common

Stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 8,095,238 shares of our Class A common stock (the

“July 2023 Standard Warrants”).

The July 2023 units were offered pursuant to a Registration Statement on Form S-1 (the “July

2023 Offering”).

The July 2023 Offering generated gross proceeds of approximately $ 4.3 million and net proceeds to the Company

of approximately $ 3.8 million and closed on July 3, 2023.

August 9, 2022, we entered into an asset-based loan agreement dated as of August 8, 2022 (the “Loan Agreement”), which made

available to the Company a term loan of up to $ 15.0 million.

On February 9, 2023, we entered into Amendment No.

2 to the Loan Agreement, in which we agreed to, among other things, voluntarily prepay approximately $ 6.6 million (inclusive of early termination fees and expenses) under the terms provided for under the Loan Agreement and the lenders under the Loan Agreement agreed to release $ 5.7 million in funds held in a blocked account pursuant to the terms of the Loan Agreement.

On August 7, 2023, we repaid the approximately $ 4.3 million in aggregate principal amount (the “Loan Repayment”) which remained outstanding under the terms of the Loan Agreement.

As a result of the Loan Repayment, the Company has been released from its obligations under the Loan Agreement, in accordance with the terms of the Loan Agreement.

2 to the Loan Agreement,

in which we agreed to, among other things, voluntarily prepay approximately $ 6.6 million (inclusive of early termination fees and expenses)

under the terms provided for under the Loan Agreement and the lenders under the Loan Agreement agreed to release $ 5.7 million in funds

held in a blocked account pursuant to the terms of the Loan Agreement.

August 7, 2023, we repaid the approximately $ 4.3 million in aggregate principal amount (the “Loan Repayment”) which remained

outstanding under the terms of the Loan Agreement.

As a result of the Loan Repayment, the Company has been released from its obligations

under the Loan Agreement, in accordance with the terms of the Loan Agreement.

See “Note 6 - Long Term Debt” for more information.

On February 16, 2023, two of our wholly owned subsidiaries, Warehouse Goods LLC and KIM International LLC, entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.85 million in cash, an economic participation interest, at a discount, in our rights to payment from the United States Internal Revenue Service for certain periods with respect to the employee retention credits filed by us under the Employee Retention Credit program.

Future Receivables Financings

On July 31, 2023 and August 3, 2023, the Company received an aggregate of approximately $ 3.0 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders.

The Company will make weekly payments under the Future Receivables Financings and is scheduled to repay the amounts due under the Future Receivables Financings in full in approximately six to eight months .

February 16, 2023, two of our wholly owned subsidiaries, Warehouse Goods LLC and Kim International LLC, entered into an agreement with

a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.9 million in cash, an economic participation

interest, at a discount, in our rights to payment from the United States Internal Revenue Service for certain periods with respect to

the employee retention credits filed by us under the Employee Retention Credit program.

Receivables Financing

July, August, October, and November 2023, the Company received an aggregate of approximately $ 3.9 million in cash pursuant to the terms

of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders.

See “Note 6 - Long Term Debt” for more information.

Management Initiatives

We have completed several initiatives to optimize our working capital requirements.

We launched Groove, a new, innovative Greenlane Brands product line, which is accretive to gross profit, and we also rationalized our third-party brands product offering, which enables us to reduce inventory carrying costs and working capital requirements.

In April 2023, we successfully entered into two strategic partnerships which management believes will help significantly reduce our overall cost structure, enhance our margins and further support our facilities consolidation initiatives while also servicing and providing solutions to our customers.

First, we entered into a strategic partnership (the “MJ Packaging Partnership”) with A&A Global Imports d/b/a MarijuanaPackaging.com (“MJ Pack”), a leading provider of packaging solutions to the cannabis industry.

As part of the MJ Packaging Partnership, we will no longer purchase additional packaging inventory and MJ Pack will become our strategic partner to continue providing and enhancing packaging solutions for our customers.

As a result of the MJ Packaging Partnership, we are no longer seeking a purchaser for our packaging division.

Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”).

As part of the Vape Partnership, we will introduce our Vape Partner to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage and distribution of such vaporizer products.

If our Vape Partner and key customer(s) enter into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s).

In exchange we would earn quarterly and annual commission payments from our strategic partners.

While the strategic partnerships may result in a decrease in top line revenue for these packaging and vape products, these partnerships combined with some of our other restructuring initiatives should allow us to reduce our overall cost-structure and enhance our margins and convert millions of dollars of existing inventory back into cash, thereby improving our balance sheet.

We have successfully renegotiated supplier partnership terms and are continuing to improve working capital arrangements with suppliers.

We have made progress consolidating and streamlining our office, warehouse, and distribution operations footprint.

We have reduced our workforce by approximately 49 % throughout fiscal year 2022 to reduce costs and align with our revenue projections.

The Company has incurred net losses of $ 27.9 million and $ 182.2 million for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively.

For the nine months ended September 30, 2023, cash provided by operating activities was $ 1.2 million, which included $ 4.9 million of cash from the ERC sale discussed above, and cash used in operating activities for the year ended December 31, 2022 was $ 26.4 million.

The recent macroeconomic environment has caused weaker demand than contemplated under the Company's business plan, resulting in a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

As a result of our losses and our projected cash needs, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes, without limitation:

▪ Further reducing operating costs expense by taking additional restructuring actions to align cost with revenue to achieve profitability.

▪ Increasing revenue by introducing new products and acquiring new customers.

▪ Execute on strategic partnerships accretive to margins and operating cash

▪ Seeking additional capital through the issuance of debt or equity securities.

The consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty.

Use of Estimates

Conformity with U.S.

GAAP requires the use of estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes.

These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources.

We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances.

GAAP requires us to make estimates and judgments in several areas.

Secured Bridge Loan

On September 22, 2023, the Company entered into a

secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023

with Synergy Imports, LLC (the “Secured Bridge Loan Lender”).

Pursuant to the September 2023 Loan Agreement, the

Secured Bridge Loan Lender agreed to make available to the Company a six -month bridge loan of $ 2.2 million in new funds.

Additionally,

the Secured Bridge Loan Lender agreed to defer payments totaling $ 2,028,604 already owed by the Company under existing payment obligations

and potentially defer up to an additional $ 2,655,778 which may become due pursuant to existing agreements during the term of the September

2023 Loan Agreement.

Subject to certain exceptions, the Company agreed

to pledge all of its assets, with the exception of deposit accounts and accounts receivable, as collateral.

Additionally, the Company

agreed to transfer one US patent and two related foreign patents and a related trademark in exchange for an exclusive license back of

such assets in the area of smoking products and accessories in connection with the September 2023 Loan Agreement.

have completed several initiatives to optimize our working capital requirements.

In the fourth quarter of 2022, we launched Groove,

a new, innovative Greenlane Brands product line, and we also rationalized and improved our third-party brands product offering,

which enabled us to reduce inventory carrying costs and working capital requirements while increasing our offerings.

April 2023, we entered into two strategic partnership.

First, we entered into a strategic partnership (the “MJ Packaging Partnership”)

with A&A Global Imports d/b/a MarijuanaPackaging.com (“MJ Pack”), a leading provider of packaging solutions to the cannabis

Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”)

to service certain key customers with vaporizer goods and services (the “Vape Partnership”).

As part of the Vape Partnership,

we will introduce our Vape Partner to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services,

and help coordinate the logistics, storage and distribution of such vaporizer products.

If our Vape Partner and key customer(s) enter

into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly

from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s).

In exchange we would

earn quarterly and annual commission payments from our strategic partners.

While the strategic partnerships may result in a decrease

in top line revenue for these packaging and vape products, these partnerships combined with some of our other restructuring initiatives

should allow us to reduce our overall cost-structure and enhance our margins, thereby improving our balance sheet.

We have successfully renegotiated many of our vendor

and supplier partnership terms and are continuing to improve working capital arrangements with our vendors and suppliers.

progress consolidating and streamlining our office, warehouse, and distribution operations footprint.

We have reduced our workforce significantly

to reduce costs and align with our revenue projections.

Company has incurred net losses of $ 4.5 million and $ 8.7 million for the three months ended March 31, 2024 and 2023, respectively.

the three months ended March 31, 2024 and 2023, cash (used in) provided by operating activities were $ (0.1) million and $ 1.9 million, respectively.

The recent macroeconomic environment has caused weaker demand than contemplated under the Company’s business plan, resulting in

a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

a result of our losses and our projected cash needs, combined with our current liquidity level, substantial doubt exists about the Company’s

ability to continue as a going concern.

The Company’s ability to continue as a going concern is contingent upon successful execution

of management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes,

without limitation:

reducing operating costs expense by taking additional restructuring actions to align cost with revenue to achieve profitability.

revenue by introducing new products, acquiring new customers, and enhancing our

on strategic partnerships accretive to margins and operating cash

additional capital through the issuance of debt or equity securities.

unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this going concern

For a more complete description of our initiatives, see the Management Discussion and Analysis.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission

(“SEC”) regarding interim financial reporting.

Certain information and note disclosures normally included in the financial

statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes

included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The condensed consolidated results of operations for

the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December

31, 2024, or any other future annual or interim period.

In the opinion of management, the unaudited condensed consolidated financial

statements reflect all adjustments necessary for a fair statement of the Company’s financial position and operating results.

reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year.

of Consolidation

condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating

Company’s consolidated subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

GAAP requires the use of estimates and judgments that affect the reported amounts in our consolidated financial statements

and accompanying notes.

These estimates form the basis for judgments we make about the carrying values of our assets and liabilities,

which are not readily apparent from other sources.

We base our estimates and judgments on historical information and on various other

assumptions that we believe are reasonable under the circumstances.

GAAP requires us to make estimates and judgments in several

Such areas include, but are not limited to the following:

the collectability of accounts receivable;

the allowance for slow-moving or obsolete inventory;

the allowance for slow-moving

or obsolete inventory;

the realizability of deferred tax assets;

the fair value of contingent consideration arrangements;

the useful lives property and equipment;

lives property and equipment;

the calculation of our VAT taxes receivable and VAT taxes, fines, and penalties payable;

our loss contingencies, including our TRA liability;

our loss contingencies,

including our TRA liability;

and the valuation and assumptions underlying equity-based compensation.

These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future.

The actual results could differ materially from those estimates.

Segment Reporting

We manage our global business operations through our operating and reportable business segments.

As of September 30, 2023, we had two reportable operating business segments:

These estimates are based on management’s

knowledge about current events and expectations about actions we may undertake in the future.

The actual results could differ materially

from those estimates.

manage our global business operations through our operating and reportable business segments.

As of March 31, 2024, we had two reportable

operating business segments:

Industrial Goods and Consumer Goods.

Our reportable segments have been identified based on how our chief operating decision maker ("CODM"), which is a committee comprised of our Chief Executive Officer ("CEO") and our Chief Financial and Legal Officer ("CFO"), manages our business, makes resource allocation and operating decisions, and evaluates operating performance.

Our reportable segments have been identified based on how our chief

operating decision maker (“CODM”), which is a committee comprised of our Chief Executive Officer (“CEO”) and

our Chief Financial and Legal Officer (“CFO”), manages our business, makes resource allocation and operating decisions, and

evaluates operating performance.

See “Note 12—Segment Reporting.”

Revenue Recognition

The Company transitioned to a commission revenue model for the majority of the sales for the Industrial segment.

The company operates as a Sales Agent servicing vape customers and receives a commission for these services.

The company was previously working directly with these customers and recognizing gross revenue versus straight commission revenue.

Our liability for returns, which is included within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheets, was approximately $ 0.1 million and $ 0.3 million as of September 30, 2023 and December 31, 2022, respectively.

For the three and nine months ended September 30, 2023, one customer represented approximately 13 % and 28 % of our net sales.

No single customer represented more than 24 % of our net sales for the three and nine months ended September 30, 2022.

As of September 30, 2023, one customer represented approximately 30 % of accounts receivable.

As of December 31, 2022, the Company had three customers who individually represented approximately 31 %, 17 % and 15 % of accounts receivable, respectively.

Value Added Taxes

During the third quarter of 2020, as part of a global tax strategy review, we determined that our European subsidiaries based in the Netherlands, which we acquired on September 30, 2019, had historically collected and remitted value added tax (“VAT”) payments, which related to direct-to-consumer sales to other European Union (“EU”) member states, directly to the Dutch tax authorities.

In connection with our subsidiaries' payment of VAT to Dutch tax authorities rather than other EU member states, we may become subject to civil or criminal enforcement actions in certain EU jurisdictions, which could result in penalties.

We performed an analysis of the VAT overpayments to the Dutch tax authorities, which we expected to be refunded to us, and VAT payable to other EU member states, including potential fines and penalties.

Based on this analysis, we recorded VAT payable of approximately $ 0.4 million relating to this matter within "Accrued expenses and other current liabilities” in our condensed consolidated balance sheet as of September 30, 2023 and December 31, 2022.

Pursuant to the purchase and sale agreement by which we acquired our European subsidiaries, the sellers are required to indemnify us against certain specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by us in connection with non-compliance with tax laws in relation to activities of the sellers.

The indemnity (or indemnification receivable) is limited to an amount equal to the purchase price under the purchase and sale agreement.

During the three months ended March 31, 2022, we recognized a gain of approximately $ 1.8 million within "general and administrative expenses" in our condensed consolidated statements of operations and comprehensive loss, which represented the partial reversal of a charge previously recognized based on the difference between the VAT payable and the VAT receivable and indemnification asset, as the indemnification asset became probable of recovery based on the reduction in our previously estimated VAT liability for penalties and interest based on our voluntary disclosure to, and ongoing settlement with, the relevant tax authorities in the EU member states.

As noted above, we have voluntarily disclosed VAT owed to several relevant tax authorities in the EU member states and believe in doing so we will reduce our liability for penalties and interest.

Nonetheless, we may incur expenses in future periods related to such matters, including litigation costs and other expenses to defend our position.

The outcome of such matters is inherently unpredictable and subject to significant uncertainties.

Refer to "Note 7—Commitments and Contingencies" for additional discussion regarding our contingencies.

Recently Issued Accounting Guidance

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses .

The standard requires the use of an “expected loss” model on certain types of financial instruments.

The standard also amends the impairment model for available-for-sale securities and requires estimated credit losses to be recorded as allowances rather than as reductions to the amortized cost of the securities.

This standard was effective for fiscal years, and interim periods within those years, beginning after December 15, 2022 for filers that are eligible to be smaller reporting companies under the SEC's definition, with early adoption permitted.

We adopted this standard beginning January 1, 2023.

Adoption of this standard did not have a material impact on our condensed consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts.

Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date.

The ASU was effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application).

We adopted this new standard beginning January 1, 2023.

Adoption of this standard did not impact our condensed consolidated financial statements, as we did not complete any transactions to which this standard was applicable during the current reporting period.

Recently Issued Accounting Guidance Not Yet Adopted

In June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , which clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security’s unit of account.

This standard is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The Company is currently evaluating the impact of adopting the standard.

is recognized when customers obtain control of goods and services promised by us.

Revenue is measured based on the amount of consideration

that we expect to receive in exchange for those goods or services, reduced by promotional discounts and estimates for return allowances

Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

generate revenue primarily from the sale of finished products to customers, whereby each product unit represents a single performance

We recognize revenue from product sales when the customer has obtained control of the products, which is either at point

of sale or delivery to the customer, depending upon the specific terms and conditions of the arrangement, or at the point of sale for

our retail store sales.

We provide no warranty on products sold.

Product warranty is provided by the manufacturers.

For certain product

offerings such as child-resistant packaging, closed-system vaporization solutions and custom-branded retail products, we may receive

a deposit from the customer (generally 25 % - 50 % of the total order cost, but the amount can vary by customer contract) when an order

is placed by a customer.

We typically complete these orders within one to six months from the date of order, depending on the complexity

of the customization and the size of the order, but the completion timeline can vary by product type and terms of sales with each customer.

See “Note 8—Supplemental Financial Statement Information” for a summary of changes to our customer deposits liability

balance during the three months ended March 31, 2024 and the year ended December 31, 2023.

estimate product returns based on historical experience and record them as a refund liability that reduces the net sales for the period.

We analyze actual historical returns, current economic trends and changes in order volume when evaluating the adequacy of our sales returns

allowance in any reporting period.

Our liability for returns, which is included within “Accrued expenses and other current liabilities”

in our consolidated balance sheets, was approximately $ 0.1 million and $ 0.1 million as of March 31, 2024 and December 31, 2023, respectively.

elected to account for shipping and handling expenses that occur after the customer has obtained control of products as a fulfillment

activity in cost of sales.

Shipping and handling fees charged to customers are included in net sales upon completion of our performance

We apply the practical expedient provided for by the applicable revenue recognition guidance by not adjusting the transaction

price for significant financing components for periods less than one year.

We also apply the practical expedient provided by the applicable

revenue recognition guidance based upon which we generally expense sales commissions when incurred because the amortization period is

one year or less.

Sales commissions are recorded within “Salaries, benefits and payroll tax expenses” in the consolidated

statements of operations and comprehensive loss.

Company transitioned to a commission revenue model for the majority of the sales for the Industrial segment.

The company operates as

a sales agent servicing vape customers and receives a commission for these services.

The company was previously working directly with

these customers and recognizing gross revenue versus straight commission revenue.

The Company recognizes this fee on a periodic basis

when the products have been shipped for the end consumer.

In working with their partner, the Company is not responsible for fulfilling

a promise to provide the specified goods, does not establish the pricing with its partners customers, and does not have control over

the goods that will be shipped.

As such, the Company is an agent and recognizes its revenue on a net basis for its service.

company pays Greenlane a negotiated percentage-based fee on a quarterly basis.

customer represented approximately 28 % and 26 % of net sales for the three months ended March 31, 2024 and 2023 ,

respectively .

As of March 31, 2024 and December 31, 2023, the Company has a concentration of credit

risk with its accounts receivable balance as one customer represented approximately 24 % and 11 %, respectively, of accounts receivable.

the third quarter of 2020, as part of a global tax strategy review, we determined that our European subsidiaries based in the Netherlands,

which we acquired on September 30, 2019, had historically collected and remitted value added tax (“VAT”) payments, which

related to direct-to-consumer sales to other European Union (“EU”) member states, directly to the Dutch tax authorities.

In connection with our subsidiaries’ payment of VAT to Dutch tax authorities rather than other EU member states, we may become

subject to civil or criminal enforcement actions in certain EU jurisdictions, which could result in penalties.

performed an analysis of the VAT overpayments to the Dutch tax authorities, which we expected to be refunded to us, and VAT payable to

other EU member states, including potential fines and penalties.

Based on this analysis, we recorded VAT payable of approximately $ 0.4

million relating to this matter within “Accrued expenses and other current liabilities” in our condensed consolidated balance

sheet as of March 31, 2024 and December 31, 2023.

to the purchase and sale agreement by which we acquired our European subsidiaries, the sellers are required to indemnify us against certain

specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by us in connection

with non-compliance with tax laws in relation to activities of the sellers.

The indemnity (or indemnification receivable) is limited

to an amount equal to the purchase price under the purchase and sale agreement.

noted above, we have voluntarily disclosed VAT owed to several relevant tax authorities in the EU member states and believe in doing

so we will reduce our liability for penalties and interest.

Nonetheless, we may incur expenses in future periods related to such matters,

including litigation costs and other expenses to defend our position.

The outcome of such matters is inherently unpredictable and subject

to significant uncertainties.

Refer to “Note 7—Commitments and Contingencies” for additional discussion regarding our

contingencies.

Issued Accounting Guidance Not Yet Adopted

June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ,

which clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity

holding the equity security and is not included in the equity security’s unit of account.

This standard is effective for fiscal

years beginning after December 15, 2023, with early adoption permitted.

The Company is currently evaluating the impact of adopting the

November 2023, the FASB issued ASU No.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which

improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments

in this update require public companies to disclose on an annual and interim basis, significant segment expenses that are regularly provided

to the chief operating decision maker (CODM) and require that a public entity disclose, on an annual and interim basis, an amount for

other segment items by reportable segment and a description of its composition.

In addition, the amendment requires that a public entity

provide all annual disclosures about a reportable segment’s profit or loss and assets currently required in interim periods and

require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s)

of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Early adoption is permitted.

is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

This amendment will

go into effect for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) :

Improvements To Income Tax Disclosures, to enhance

the transparency and decision usefulness of income tax disclosures.

The amendments in this Update address investor requests for more

transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation

and income taxes paid information.

amendments in this Update require that entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2)

provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is

equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax

In addition, public business entities are required to provide certain qualitative disclosure about the rate reconciliation.

amendments in this Update require that all entities disclose on an annual basis the amount of income taxes paid (net of refunds received)

disaggregated (1) by federal (national), state, and foreign taxes and (2) by individual jurisdictions in which income taxes paid (net

of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).

Update also includes certain other amendments to improve the effectiveness of income tax disclosures, such as requiring that all entities

disclose the following information:

Income (or loss) from continuing

operations before income tax expense (or benefit) disaggregated between domestic and foreign.

Income tax expense (or

benefit) from continuing operations disaggregated by federal (national), state, and foreign.

amendments in this ASU require a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components

of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments.

Early adoption

is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

This amendment will go into effect for annual periods beginning after December 15, 2024.

BUSINESS ACQUISITIONS AND DISPOSITIONS

Amended Eyce APA

On April 7, 2022, we entered into an amendment to that certain Asset Purchase Agreement dated March 2, 2021 (the “Amended Eyce APA”), by and between Eyce and Warehouse Goods to accelerate the issuance of shares of Class A common stock issuable to Eyce under the agreement upon the attainment of certain EBITDA and revenue benchmarks (the “Amended 2022 Contingent Payment”), in an amount equal to $ 0.9 million.

We issued 7,172 shares of Class A common stock to Eyce under the Amended 2022 Contingent Payment, which vest ratably in seven quarterly tranches starting on July 1, 2022, such that on January 1, 2024 (the “Vesting Date”), all shares issued to Eyce under the Amended 2022 Contingent Payment will have vested.

The shares of Class A common stock issued under the Amended 2022 Contingent Payment are subject to certain forfeiture restrictions tied to the continued employment of certain Eyce personnel with the Company through the Vesting Date.

The Amended Eyce APA also provided for the payment of $ 0.9 million in cash in four equal installments on April 1, 2023, July 1, 2023, October 1, 2023 and January 1, 2024, contingent on the achievement of certain deliverables outlined in the Amended Eyce APA and the continued employment of certain Eyce personnel.

The transaction was accounted for separately from acquisition accounting for the Eyce business combination.

The April 2, 2023 and July 1, 2023 payments were paid timely, the remaining payments, if not paid timely will roll into the Synergy Imports, LLC Bridge Loan and included in the potential additionally deferred amounts under that Loan..

On July 19, 2022, Warehouse Goods entered into the Sale Agreement with Portofino to sell the Company’s 50 % stake in VIBES Holdings LLC for total consideration of $ 4.6 million in cash.

The transactions contemplated by the Sale Agreement were completed on July 19, 2022, immediately following the signing of the Sale Agreement.

In conjunction with and as a result of the disposition of and deconsolidation of our interest in VIBES Holdings LLC, we recorded a gain of $ 2.0 million for the three months ended September 30, 2022, which is included as an offset in "general and administrative expenses" in our condensed consolidated statements of operations and comprehensive loss, as well as a reduction to non-controlling interest on our condensed consolidated balance sheet as of September 30, 2022 of $ 1.8 million.

In conjunction with the Sale Agreement, we retuned inventory to VIBES with a carrying value of approximately $ 2.4 million.

April 7, 2022, we entered into an amendment to that certain Asset Purchase Agreement dated March 2, 2021 (the “Amended Eyce APA”),

by and between Eyce and Warehouse Goods to accelerate the issuance of shares of Class A common stock issuable to Eyce under the agreement

upon the attainment of certain EBITDA and revenue benchmarks (the “Amended 2022 Contingent Payment”), in an amount equal

to $ 0.9 million.

We issued 7,172 shares of Class A common stock to Eyce under the Amended 2022 Contingent Payment, which vest ratably

in seven quarterly tranches starting on July 1, 2022, such that on January 1, 2024 (the “Vesting Date”), all shares issued

to Eyce under the Amended 2022 Contingent Payment will have vested.

The shares of Class A common stock issued under the Amended 2022

Contingent Payment are subject to certain forfeiture restrictions tied to the continued employment of certain Eyce personnel with the

Company through the Vesting Date.

Amended Eyce APA also provided for the payment of $ 0.9 million in cash in four equal installments on April 1, 2023, July 1, 2023, October

1, 2023 and January 1, 2024, contingent on the achievement of certain deliverables outlined in the Amended Eyce APA and the continued

employment of certain Eyce personnel.

The transaction was accounted for separately from acquisition accounting for the Eyce business

The April 2, 2023 and July 1, 2023 payments were paid timely, the remaining payments, if not paid timely will roll into

the Synergy Imports, LLC Bridge Loan and included in the potential additionally deferred amounts under that Loan.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The carrying amounts for certain of our financial instruments, including cash, accounts receivable, accounts payable and certain accrued expenses and other assets and liabilities, approximate fair value due to the short-term nature of these instruments.

As of September 30, 2023 and December 31, 2022, we had contingent consideration that is required to be measured at fair value on a recurring basis.

Our financial instruments measured at fair value on a recurring basis were as follows at the dates indicated:

and Liabilities that are Measured at Fair Value on a Recurring Basis

carrying amounts for certain of our financial instruments, including cash, accounts receivable, accounts payable and certain accrued

expenses and other assets and liabilities, approximate fair value due to the short-term nature of these instruments.

of March 31, 2024 and December 31, 2023, we had contingent consideration that is required to be measured at fair value on a recurring

OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS

financial instruments measured at fair value on a recurring basis were as follows at the dates indicated:

Condensed Consolidated

Balance Sheet Caption Fair Value at September 30, 2023

(in thousands) Level 1 Level 2 Level 3 Total

Contingent consideration - current Accrued expenses and other current liabilities $ — $ — 1,500 1,500

Balance Sheet Caption

Fair Value at March 31, 2024

(in thousands)

Contingent consideration - current

Accrued expenses and other current liabilities

Total Liabilities

(in thousands)

Condensed Consolidated

Balance Sheet Caption Fair Value at December 31, 2022

(in thousands) Level 1 Level 2 Level 3 Total

Contingent consideration - current Accrued expenses and other current liabilities $ — $ — $ 2,738 $ 2,738

Balance Sheet Caption

Fair Value at December 31, 2023

(in thousands)

Contingent consideration - current

Accrued expenses and other current liabilities

Total Liabilities

There were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2023 and 2022, respectively.

Derivative Instrument and Hedging Activity

On July 11, 2019, we entered into an interest rate swap contract to manage our risk associated with the interest rate fluctuations on the Company’s floating rate Real Estate Note described in “Note 6 - Debt.” The counterparty to this instrument was a reputable financial institution.

Our interest rate swap contract was designated as a cash flow hedge at the inception date and was previously reflected at its fair value in our consolidated balance sheets.

The fair value of our interest rate swap liability was determined based on the present value of expected future cash flows.

Since our interest rate swap value was based on the LIBOR forward curve and credit default swap rates, which were observable at commonly quoted intervals for the full term of the swap, it was considered a Level 2 measurement.

Beginning with the second quarter of 2022, we discontinued hedge accounting for the interest rate swap contract.

During the second quarter of 2022, we also reclassified the related accumulated other comprehensive income balance of $ 0.3 million to "interest expense" in our condensed consolidated statement of income and comprehensive loss.

Refer to “Note 8 — Supplemental Financial Information” for further details on the components of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022, respectively.

The unrealized loss on the derivative instrument prior to the discontinuation of hedge accounting was included within “Other comprehensive income (loss)” in our condensed consolidated statement of operations and comprehensive loss.

There was no measure of hedge ineffectiveness and no reclassifications from other comprehensive loss into interest expense for the three months ended September 30, 2022.

In August 2022, we terminated the interest swap contract.

Contingent Consideration

Each period we revalue our contingent consideration obligations associated with business acquisitions to their fair value.

We estimate the fair value of the Product Launch Contingent Payments using a form of the scenario-based method, which includes significant unobservable inputs such as management’s identification of probability-weighted outcomes and a risk-adjusted discount rate over the earn-out period.

Significant increases or decreases in these inputs could result in a significantly lower or higher fair value measurement of the contingent consideration liability.

Changes in the fair value of contingent consideration are included within “Other income (expense), net” in our condensed consolidated statements of operations and comprehensive loss.

A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows:

(in thousands) Nine Months Ended

September 30, 2023

were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three months

ended March 31, 2024 and 2023, respectively.

Consideration

period we revalue our contingent consideration obligations associated with business acquisitions to their fair value.

We estimate the

fair value of the Product Launch Contingent Payments using a form of the scenario-based method, which includes significant unobservable

inputs such as management’s identification of probability-weighted outcomes and a risk-adjusted discount rate over the earn-out

Significant increases or decreases in these inputs could result in a significantly lower or higher fair value measurement of

the contingent consideration liability.

Changes in the fair value of contingent consideration are included within “Other income

(expense), net” in our condensed consolidated statements of operations and comprehensive loss.

reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs

(Level 3) is as follows:

OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

(in thousands)

Three Months Ended

March 31, 2024

Balance at December 31, 2023

2 unchanged sentences

Loss (gain) from fair value adjustments included in results of operations

Balance September 30, 2023 $ 1,500

(in thousands) Nine Months Ended

September 30, 2022

Balance at December 31, 2021 $ 6,857

Eyce 2021 Contingent Payment settlement in Class A common stock ( 875 )

Eyce 2021 Contingent Payment settlement in cash ( 875 )

DaVinci 2021 Contingent Payment settlement in Class A common stock ( 2,611 )

Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA ( 267 )

Gain from fair value adjustments included in results of operations ( 929 )

Balance at September 30, 2022 $ 1,300

Equity Securities Without a Readily Determinable Fair Value

Our investment in equity securities without readily determinable fair value consist of ownership interests in Airgraft Inc., Sun Grown Packaging, LLC (“Sun Grown”) and Vapor Dosing Technologies, Inc.

We determined that our ownership interests do not provide us with significant influence over the operations of these investments.

Accordingly, we account for our investments in these entities as equity securities.

Airgraft Inc., Sun Grown, and VIVA are private entities and their equity securities do not have a readily determinable fair value.

We elected to measure these securities under the measurement alternative election at cost minus impairment, if any, with adjustments through earnings for observable price changes in orderly transactions for the identical or similar investment of the same issuer.

We acquired our investments in Sun Grown and VIVA as part of our merger with KushCo, which we completed in August 2021.

We did not identify any fair value adjustments related to these equity securities during the three and nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and December 31, 2022, the carrying value of our investment in equity securities without a readily determinable fair value was approximately $ 2.5 million and $ 2.5 million, respectively, included within "Other assets" in our condensed consolidated balance sheets.

The carrying value included a fair value adjustment of $ 1.5 million based on an observable price change recognized during the year ended December 31, 2019.

Greenlane as a Lessee

As of September 30, 2023, we had facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2023 and 2027.

Lease terms are generally three to seven years for warehouses, office space and retail store locations.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2023.

The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

(in thousands) Operating Leases

Balance March 31, 2024

Securities Without a Readily Determinable Fair Value

investment in equity securities without readily determinable fair value consist of ownership interests in Airgraft Inc., Sun Grown Packaging,

LLC (“Sun Grown”) and Vapor Dosing Technologies, Inc.

We determined that our ownership interests do

not provide us with significant influence over the operations of these investments.

Accordingly, we account for our investments in these

entities as equity securities.

Inc., Sun Grown, and VIVA are private entities and their equity securities do not have a readily determinable fair value.

to measure these securities under the measurement alternative election at cost minus impairment, if any, with adjustments through earnings

for observable price changes in orderly transactions for the identical or similar investment of the same issuer.

We acquired our investments

in Sun Grown and VIVA as part of our merger with KushCo, which we completed in August 2021.

We did not identify any fair value adjustments

related to these equity securities during the three months ended March 31, 2024 and 2023, respectively.

of March 31, 2024 and December 31, 2023, the carrying value of our investment in equity securities without a readily determinable fair

value was approximately $ 1.9 million, respectively, included within “Other assets” in our condensed consolidated balance

As of March 31, 2024, we had

facilities financed under operating leases consisting of warehouses and offices with lease term expirations between 2023

Lease terms are generally three to seven years for warehouses and office space.

Our lease agreements

do not contain any material residual value guarantees or material restrictive covenants.

following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated

balance sheet as of March 31, 2024.

The table below does not include commitments that are contingent on events or other factors that

are currently uncertain or unknown.

OF LESSEE OPERATING LEASE LIABILITY MATURITY

(in thousands)

Operating Leases

Remainder of 2024

5 unchanged sentences

Long-term portion

Rent expense under operating leases was approximat ely $ 0.4 million and $ 1.5 million for three and nine months ended September 30, 2023, respectively, and approximately $ 0.6 million and $ 2.1 million for the three and nine months ended September 30, 2022, respectively.

The following expenses related to our operating leases were included in "general and administrative" expenses within our condensed consolidated statements of operations and comprehensive loss:

For the nine months ended

September 30,

expense under operating leases was approximately $ 0.3 million and $ 0.8 million for the three months ended March 31, 2024 and 2023, respectively.

following expenses related to our operating leases were included in “general and administrative” expenses within our condensed

consolidated statements of operations and comprehensive loss:

OF LEASE COST

(in thousands)

For the three months ended

(in thousands)

Operating lease cost

1 unchanged sentence

Total lease cost

The table below presents lease-related terms and discount rates as of September 30, 2023:

table below presents lease-related terms and discount rates as of March 31, 2024:

Operating Leases

Weighted average remaining lease terms 2.2 years

Weighted average remaining lease terms

Weighted average discount rate

Our debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated:

(in thousands) September 30, 2023 December 31, 2022

Asset-Based Loan $ — $ 15,000

DaVinci Promissory Note 653 2,538

Eyce Promissory Note — 647

Future Receivables Financings

debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated:

(in thousands)

Future Receivables Financing

Secured Bridge Loan

Total long term debt

Less unamortized debt issuance costs

1 unchanged sentence

Debt, net, excluding operating and finance leases and liabilities

In December 2021, we entered into a Secured Promissory Note with Aaron LoCascio, our co-founder, former Chief Executive Officer and President, and a current director of the Company, in which Mr.

LoCascio provided us with a bridge loan in the principal amount of $ 8.0 million (the “December 2021 Note”).

The December 2021 Note accrued interest at a rate of 15.0 % is due monthly, and the principal amount was originally due in full on June 30, 2022.

We incurred $ 0.3 million of debt issuance costs related to the December 2021 Note, which were recorded as a direct deduction from the carrying amount of the December 2021 Note, and which were amortized over the term of the December 2021 Note through interest expense.

The December 2021 Note was secured by a continuing security interest in all of our assets and properties whether then or thereafter existing or required, including our inventory and receivables (as defined under the Universal Commercial Code) and included negative covenants restricting our ability to incur further indebtedness and engage in certain asset dispositions until the earlier of the maturity date or the December 2021 Note being fully repaid.

On June 30, 2022, we entered into the First Amendment to the December 2021 Note (the "First Amendment"), which extended the maturity date of the December 2021 Note to July 14, 2022.

On July 14, 2022, we entered into the Second Amendment to the December 2021 Note (the “Second Amendment” and together with the December 2021 Note, the "Bridge Loan"), which provided for the extension of the maturity date of the Bridge Loan from July 14, 2022 to July 19, 2022.

In connection with the entry into the Second Amendment, we repaid $ 4.0 million of the aggregate principal amount due under the Bridge Loan on July 14, 2022, with the remainder due at maturity.

On July 19, 2022, we repaid the remaining balance on the Bridge Loan in full, and, as a result, all obligations under the Bridge Loan have been satisfied.

Real Estate Note

On October 1, 2018, one of the Operating Company’s wholly-owned subsidiaries financed the purchase of a building, which served as our corporate headquarters, through a real estate term note (the “Real Estate Note”) in the principal amount of $ 8.5 million.

Our obligations under the Real Estate Note were secured by a mortgage on the property.

On August 8, 2022, we entered into a note, mortgage and loan modification agreement (the "Real Estate Note Amendment"), which amended the maturity date of the Real Estate Note to reflect a maturity date of December 1, 2022, whereupon all principal and accrued interest were to become due and payable, in full.

In September 2022, 1095 Broken Sound consummated the previously disclosed transactions contemplated by that certain Purchase and Sale Agreement, dated as of August 16, 2022, by and between 1095 Broken Sound and ACS 1095 LLC ("the HQ Purchaser") whereby 1095 Broken Sound agreed to sell a certain parcel of real estate including the our headquarters building to the HQ Purchaser for total proceeds of $ 9.6 million in cash.

On the Closing Date, the Company used a portion of the proceeds from the HQ Transaction to repay the remainder of the Real Estate Note in full.

There was no remaining balance related to the Real Estate Note on our consolidated balance sheet as of September 30, 2023 or December 31, 2022.

Asset-Based Loan

On August 9, 2022, we entered into an asset-based loan pursuant to that certain Loan and Security Agreement, dated as of August 8, 2022 (the “Loan Agreement”), by and among the Company, certain subsidiaries of the Company (the “Guarantors”), the parties thereto from time to time as lenders (the “Lenders”), and WhiteHawk Capital Partners LP, as the agent for the Lenders (the "Asset-Based Loan" or "Line of Credit").

Pursuant to the Loan Agreement, the Lenders agreed to make available to us a term loan of up to $ 15.0 million on the terms and conditions set forth therein and the other Financing Agreements (as defined therein).

As of December 31, 2022, of the total term

loan amount, $ 5.7 million was located in a blocked account, which was classified as “restricted cash” on our condensed consolidated balance sheet, and which released the funds when permitted by the borrowing base certificate.

Subject to certain exceptions described in the Loan Agreement, the Company and the Guarantors agreed to pledge all of their assets as collateral.

The maturity date of the Asset-Based Loan is the third anniversary of the closing date (the “Maturity Date”).

We incurred $ 1.5 million of debt issuance costs related to the Asset-Based Loan, as well as an original issue discount of $ 0.5 million, which were recorded as a direct deduction from the carrying amount of the Asset-Based Loan, and which were amortized through interest expense over the term of the Asset-Based Loan.

The Asset-Based Loan contained customary covenants and restrictions, including, without limitation, covenants that required us to comply with applicable laws, restrictions on our ability to incur additional indebtedness, and various customary remedies for the lender following an event of default, including the acceleration of repayment of outstanding amounts under the Asset-Based Loan and execution upon the collateral securing obligations under the Asset-Based Loan.

The Asset-Based Loan accrued interest at the prime rate plus 8.0 % and interest payments were due monthly.

Based on the original terms, beginning with the fiscal quarter ending September 30, 2023, and for each fiscal quarter thereafter until the Maturity Date, quarterly payments of $ 0.3 million would be due, with a final payment of all remaining outstanding principal and accrued interest due on the Maturity Date.

On February 9, 2023, we entered into Amendment No.

2 to the Loan Agreement, pursuant to which we agreed to, among other things, to voluntarily prepay approximately $ 6.6 million (inclusive of early termination fees and expenses) under the terms provided for under the Loan Agreement and the lenders under the Loan Agreement agreed to release $ 5.7 million in funds held in a blocked account pursuant to the terms of the Loan Agreement.

Amendment No.

2 to the Loan Agreement also provided that we would make additional prepayments upon the occurrence of certain specified asset sales by the Company.

On August 7, 2023, we repaid the approximately $ 4.3 million in aggregate principal amount (the “Loan Repayment”) which remained outstanding under the terms of the Loan Agreement.

As a result of the Loan Repayment, the Company has been released from its obligations under the Loan Agreement, in accordance with the terms of the Loan Agreement.

DaVinci Promissory Note

In November 2021, one of the Operating Company's wholly-owned subsidiaries financed the acquisition of DaVinci through the issuance of an unsecured promissory note (the "DaVinci Promissory Note") in the principal amount of $ 5.0 million.

Principal payments plus accrued interest at a rate of 4.0 % are due quarterly through October 2023.

Eyce Promissory Note

In March 2021, one of the Operating Company's wholly-owned subsidiaries financed a portion of the consideration of the acquisition of Eyce through the issuance of an unsecured promissory note (the "Eyce Promissory Note") in the principal amount of $ 2.5 million.

Principal payments plus accrued interest at a rate of 4.5 % are due quarterly through April 2023.

As of September 30, 2023, the Eyce Promissory Note was repaid in full, and there was no remaining balance on our condensed consolidated balance sheet.

Future Receivables Financings

The total amount to be repaid under the initial Future Receivables Financings was approximately $ 4.5 million.

In connection with the Future Receivables Financings, the Company granted the lenders security interests in Company's accounts receivable equal to the amounts due thereunder, and in connection with any event of default, the lenders may file financing statements evidencing the security interests.

Receivables Financings

On July 31, 2023 and August 3, 2023, the Company received an aggregate

of approximately $ 3.0 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables

Financings”) entered into with two private lenders.

The Company will make weekly payments under the Future Receivables Financings

and is scheduled to repay the amounts due under the Future Receivables Financings in full in approximately six to eight months .

amount to be repaid under the initial Future Receivables Financings was approximately $ 4.5 million.

In connection with the Future Receivables

Financings, the Company granted the lenders security interests in Company’s accounts receivable equal to the amounts due thereunder,

and in connection with any event of default, the lenders may file financing statements evidencing the security interests.

September 22, 2023, the Company entered into a secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan

Agreement”), dated as of September 22, 2023 with Synergy Imports, LLC (the “Secured Bridge Loan Lender”).

to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a six -month bridge loan

of $ 2.2 million in new funds.

Additionally, the Secured Bridge Loan Lender agreed to defer payments totaling $ 2,028,604 already owed

by the Company under existing payment obligations and potentially defer up to an additional $ 2,655,778 which may become due pursuant

to existing agreements during the term of the September 2023 Loan Agreement.

to certain exceptions, the Company agreed to pledge all of its assets, with the exception of deposit accounts and accounts receivable,

as collateral.

Additionally, the Company agreed to transfer one US patent and two related foreign patents and a related trademark in

exchange for an exclusive license back of such assets in the area of smoking products and accessories in connection with the September

2023 Loan Agreement.

Minimum Principal Payments

following table summarizes future scheduled minimum principal payments of debt at March 31, 2024.

Future debt principal payments are

presented based upon the stated maturity dates in the respective debt agreement.

OF MATURITIES OF LONG-TERM DEBT

(in thousands)

Remainder 2024

Ending December 31,

(in thousands)

Future Receivables Financing

Secured Bridge Loan

On September 22, 2023, Greenlane Holdings, Inc.

(the “Company”) entered into a secured loan pursuant to a Loan and Security Agreement, dated as of September 22, 2023 (the “Loan Agreement”) with Synergy Imports, LLC (the "Lender").

Pursuant to the Loan Agreement, the Lender agreed to make available to the Company a six-month bridge loan of $ 2.2 million in new funds.

Additionally, the Lender agreed to defer payments totaling $ 2,028,603.59 already owed by the Company under existing payment obligations and potentially defer up to an additional $ 2,655,777.63 which may become due pursuant to existing agreements during the term of the Loan Agreement.

Subject to certain exceptions, the Company agreed to pledge all of its assets, with the exception of deposit accounts and accounts receivable, as collateral.

Additionally, the Company agreed to transfer one US patent and two related foreign patents

and a related trademark in exchange for an exclusive license back of such assets in the area of smoking products and accessories in connection with the loan.

COMMITMENTS AND CONTINGENCIES

Legal Proceedings

In the ordinary course of business, we are involved in various legal proceedings involving a variety of matters.

We do not believe there are any pending legal proceedings that will have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.

the ordinary course of business, we are involved in various legal proceedings involving a variety of matters.

We do not believe there

are any pending legal proceedings that will have a material adverse effect on our business, consolidated financial position, results

of operations, or cash flows.

However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We have not taken any reserves for litigation for the three and nine months ended September 30, 2023 and 2022, respectively.

Other Contingencies

We are potentially subject to claims related to various non-income taxes (such as sales, value added, consumption, and similar taxes) from various tax authorities, including in jurisdictions in which we already collect and remit such taxes.

If the relevant taxing authorities were successfully to pursue these claims, we could be subject to significant additional tax liabilities.

See “Note 5—Leases” for details of our future minimum lease payments under operating lease liabilities.

See “Note 11—Incomes Taxes” for information regarding income tax contingencies.

We have not taken any reserves for litigation for the three months ended March 31, 2024 and 2023, respectively.

Contingencies

are potentially subject to claims related to various non-income taxes (such as sales, value added, consumption, and similar taxes) from

various tax authorities, including in jurisdictions in which we already collect and remit such taxes.

If the relevant taxing authorities

were successfully to pursue these claims, we could be subject to significant additional tax liabilities.

“Note 5—Leases” for details of our future minimum lease payments under operating lease liabilities.

11—Incomes Taxes” for information regarding income tax contingencies.

SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

As of December 31, 2022, we had recorded an Employee Retention Credit (“ERC”) receivable of $ 4.9 million within "Other current assets" on our consolidated balance sheets, and a corresponding amount was included in "Other income (expense), net" in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2022.

On February 16, 2023, two of Greenlane Holdings, Inc.’s subsidiaries, Warehouse Goods LLC and KIM International LLC (collectively, the “Company”), entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.9 million in cash, an economic participation interest, at a discount, in all of the Company’s rights to payment from the United States Internal Revenue Service with respect to the employee retention credits filed by the Company under the ERC program.

Other Current Assets

The following table summarizes the composition of other current assets as of the dates indicated:

(in thousands) September 30, 2023 December 31, 2022

of December 31, 2022, we had recorded an Employee Retention Credit (“ERC”) receivable of $ 4.9 million within “Other

current assets” on our consolidated balance sheets, and a corresponding amount was included in “Other income (expense), net”

in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2022.

On February 16, 2023, two of

Greenlane Holdings, Inc.’s subsidiaries, Warehouse Goods LLC and KIM International LLC (collectively, the “Company”),

entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.9

million in cash, an economic participation interest, at a discount, in all of the Company’s rights to payment from the United States

Internal Revenue Service with respect to the employee retention credits filed by the Company under the ERC program.

Current Assets

following table summarizes the composition of other current assets as of the dates indicated:

OF OTHER CURRENT ASSETS

(in thousands)

March 31, 2024

December 31, 2023

(in thousands)

March 31, 2024

December 31, 2023

Other current assets:

Employee retention credit (ERC) receivable $ — $ 4,854

VAT refund receivable (Note 2)

2 unchanged sentences

Customs bonds

Other 1,310 2,716

$ 7,152 $ 11,120

Accrued Expenses and Other Current Liabilities

The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated:

(in thousands) September 30, 2023 December 31, 2022

Other current assets

Expenses and Other Current Liabilities

following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated:

OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

(in thousands)

March 31, 2024

December 31,2023

(in thousands)

March 31, 2024

December 31,2023

Accrued expenses and other current liabilities:

2 unchanged sentences

Accrued employee compensation

Amended Eyce APA — 430

Accrued professional fees 320 818

Accrued expenses

Refund liability (including accounts receivable credit balances)

Accrued construction in progress (ERP) — 170

Sales tax payable

Other 805 198

$ 9,396 $ 11,882

Accrued expenses and other current liabilities

certain product offerings we may receive a deposit from the customer (generally 25 % - 50 % of the total order cost, but the amount can

vary by customer contract), when an order is placed by a customer.

We typically complete orders related to customer deposits within one

to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion

timeline can vary by product type and terms of sale with each customer.

Changes in our customer deposits liability balance during the

three months ended March 31, 2024 were as follows:

OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

(in thousands)

Customer Deposits

For certain product offerings we may receive a deposit from the customer (generally 25 % - 50 % of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer.

We typically complete orders related to customer deposits within one to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of sale with each customer.

Changes in our customer deposits liability balance during the nine months ended September 30, 2023 were as follows:

(in thousands) Customer Deposits

Balance as of December 31, 2023

Increases due to deposits received, net of other adjustments

Customer Overpayments

Revenue recognized

Balance as of September 30, 2023 $ 2,410

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) for the periods presented were as follows:

(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total

Balance as of March 31, 2024

Other Comprehensive Income

components of accumulated other comprehensive income for the periods presented were as follows:

OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS

(in thousands)

Foreign Currency Translation

Unrealized Gain or (Loss) on Derivative Instrument

Balance at December 31, 2023

Other comprehensive income (loss) 183 — 183

Other comprehensive (income) loss attributable to non-controlling interest — — —

Balance at September 30, 2023 $ 238 $ — $ 238

(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total

Other comprehensive income

Balance at March 31, 2024

(in thousands)

Foreign Currency Translation

Unrealized Gain or (Loss) on Derivative Instrument

Balance at December 31, 2022

Other comprehensive income (loss) ( 212 ) 358 146

Reclassification adjustment for (gain) loss included in net loss (Note 4) — ( 332 ) ( 332 )

Other comprehensive (income) loss attributable to non-controlling interest ( 17 ) ( 68 ) ( 85 )

Balance at September 30, 2022 $ 53 $ — $ 53

Supplier Concentration

Our four largest vendors accounted for an aggregate of approximately 64.2 % and 74.7 % of our total purchases for the three and nine months ended September 30, 2023, respectively, and an aggregate of approximately 66.9 % and 72.6 % of our total purchases for the three and nine months ended September 30, 2022, respectively.

We expect to maintain our relationships with these vendors.

Related Party Transactions

Nicholas Kovacevich, our former Chief Corporate Development Officer, owns capital stock of Unrivaled Brands Inc.

(“Unrivaled”) and serves on the Unrivaled board of directors.

Net sales to Unrivaled totaled approximately $ 0 for both the three and nine months ended September 30, 2023, respectively, and $ 0 and $ 0.4 million for the three and nine months ended September 30, 2022, respectively.

Total accounts receivable due from Unrivaled were approximately $ 0.4 million as of September 30, 2023 and December 31, 2022, respectively.

On February 8, 2023, we filed a lawsuit against Unrivaled in Superior Court of California, Orange County, seeking to compel the repayment of Unrivaled's open balance due to us.

We can provide no assurances that we will be successful in this lawsuit, or that the amounts due to us, or any portion thereof, will be recovered.

Three individuals who were employees of the Company at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan taken out on September 22, 2023, however, none are executive officers or directors of the Company.

Other comprehensive income

Balance at March 31, 2023

Concentration

four largest vendors accounted for an aggregate of approximately 24.5 % and 79.7 % of our total purchases for the three months ended March

31, 2024 and 2023, respectively.

Party Transactions

Nicholas Kovacevich, our former

Chief Corporate Development Officer owns capital stock of Blum Holdings Inc.

Net sales to Blum totaled

approximately $0.4 million for the ended December 31, 2022.

Total accounts receivable due from Blum were approximately $0.4 million

as of March 31, 2024 and December 31, 2023, respectively.

On February 8, 2023, we filed a lawsuit against Blum in Superior Court of

California, Orange County, seeking to compel the repayment of Blum’s open balance due to us.

As of the date of these financial

statements were available to be issued, there has been a judgement received in favor of the Company.

Three individuals who were employees of the Company

at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan taken out on September 22, 2023, however, none

were executive officers or directors of the Company.

STOCKHOLDERS’ EQUITY

Shares of our Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends, whether cash or stock, and proceeds upon dissolution, winding up or liquidation), while shares of our Class B common stock have voting interests but no economic interests.

Each share of our Class A common stock and Class B common stock entitles the record holder thereof to one vote on all matters on which stockholders generally are entitled to vote, and except as otherwise required in the A&R Charter, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of preferred stock).

Effective August 9, 2022, we completed a one-for-20 reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock"), as further described in "Note 2 - Summary of Significant Accounting Policies." As a result of the 2022 Reverse Stock Split, every 20 shares of Common Stock issued and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the 2022 Reverse Stock Split.

Effective June 5, 2023, we completed a one-for-10 reverse stock split (the "2023 Reverse Stock Split" and together with the 2022 Reverse Stock Split, the "Reverse Stock Splits") of our issued and outstanding shares of Common Stock, as further described in "Note 2 - Summary of Significant Accounting Policies." As a result of the 2023 Reverse Stock Split, every 10 shares of Common Stock issued and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the 2023 Reverse Stock Split.

The Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

Non-Controlling Interest

As discussed in “Note 1—Business Operations and Organization,” we consolidate the financial results of the Operating Company in our consolidated financial statements and report a non-controlling interest related to the Common Units held by non-controlling interest holders.

As of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common stock, and we owned 100.0 % of the economic interests in the Operating Company.

The non-controlling interest in the accompanying consolidated statements of operations and comprehensive loss represents the portion of the net loss attributable to the economic interest in the Operating Company previously held by the non-controlling holders of Common Units calculated based on the weighted average non-controlling interests’ ownership during the periods presented.

At-the-Market Equity Offering

In August 2021, we established an "at-the-market" equity offering program (the "ATM Program") that provides for the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time, through Cowen and Company, LLC ("Cowen"), as the sales agent.

Net proceeds from sales of our shares of Class A common stock under the ATM Program are expected to be used for working capital and general corporate purposes.

Sales of our Class A common stock under the ATM Program may be made by means of transactions that are deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Nasdaq Global Market or sales made to or through a market maker or through an electronic communications network.

We are under no obligation to offer and sell shares of our Class A common stock under the ATM Program.

Shares of our Class A common stock will be issued pursuant to our effective shelf registration statement on Form S-3 (File No.

of our Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends,

whether cash or stock, and proceeds upon dissolution, winding up or liquidation), while shares of our Class B common stock have voting

interests but no economic interests.

Each share of our Class A common stock and Class B common stock entitles the record holder thereof

to one vote on all matters on which stockholders generally are entitled to vote, and except as otherwise required in the A&R Charter,

the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled

to vote together with the holders of Common Stock, as a single class with such holders of preferred stock).

August 9, 2022, we completed a one-for-20 reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding

shares of Class A common stock and Class B common stock (collectively, the “Common Stock”), as further described in “Note

2 - Summary of Significant Accounting Policies.” As a result of the 2022 Reverse Stock Split, every 20 shares of Common Stock issued

and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional

shares were issued in connection with the 2022 Reverse Stock Split.

June 5, 2023, we completed a one-for-10 reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse

Stock Split, the “Reverse Stock Splits”) of our issued and outstanding shares of Common Stock, as further described in “Note

2 - Summary of Significant Accounting Policies.” As a result of the 2023 Reverse Stock Split, every 10 shares of Common Stock issued

and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional

shares were issued in connection with the 2023 Reverse Stock Split.

Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

All share and

per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for

all periods presented to give effect to the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value

of Common Stock to additional paid-in capital.

Non-Controlling

discussed in “Note 1—Business Operations and Organization,” we consolidate the financial results of the Operating Company

in our consolidated financial statements and report a non-controlling interest related to the Common Units held by non-controlling interest

As of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common

stock, and we owned 100.0 % of the economic interests in the Operating Company.

The non-controlling interest in the accompanying consolidated

statements of operations and comprehensive loss represents the portion of the net loss attributable to the economic interest in the Operating

Company previously held by the non-controlling holders of Common Units calculated based on the weighted average non-controlling interests’

ownership during the periods presented.

At-the-Market

Equity Offering

August 2021, we established an “at-the-market” equity offering program (the “ATM Program”) that provides for

the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time, through Cowen

and Company, LLC (“Cowen”), as the sales agent.

Net proceeds from sales of our shares of Class A common stock under the ATM

Program are expected to be used for working capital and general corporate purposes.

of our Class A common stock under the ATM Program may be made by means of transactions that are deemed to be an “at the market

offering” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Nasdaq Capital Market or sales

made to or through a market maker or through an electronic communications network.

We are under no obligation to offer and sell shares

of our Class A common stock under the ATM Program.

of our Class A common stock will be issued pursuant to our effective shelf registration statement on Form S-3 (File No.

and a prospectus supplement relating to the Class A common stock that was filed with the Securities and Exchange Commission on April

Pursuant to Instruction I.B.6, in no event will the Company sell Class A common stock through the ATM Program with a value exceeding more than one-third of the Company’s “public float” (the market value of the Company’s Class A common stock and any other equity securities that it issues in the future that are held by non-affiliates) in any twelve-month period so long as the Company’s public float remains below $75.0 million.

On April 18, 2022, we entered into Amendment No.

Pursuant to Instruction I.B.6, in no event will the Company sell Class A common stock through the ATM Program with a value

exceeding more than one-third of the Company’s “public float” (the market value of the Company’s Class A common

stock and any other equity securities that it issues in the future that are held by non-affiliates) in any twelve-month period so long

as the Company’s public float remains below $ 75.0 million.

April 18, 2022, we entered into Amendment No.

1 (the “ATM Amendment”) to the sales agreement dated August 2, 2022 with Cowen.

The purpose of the Amendment was to add the limitations imposed on the ATM Program by Instruction I.B.6 to the sales agreement.

At the time of our entry into the ATM Amendment, approximately $ 37.3 million in shares remained available for issuance under the ATM Program.

The table below summarizes sales of our Class A common stock under the ATM program:

($ in thousands) August 2021 (Inception) through

September 30, 2023

time of our entry into the ATM Amendment, approximately $ 37.3 million in shares remained available for issuance under the ATM Program.

to the untimely filing of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 we are unable to issue additional

shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement for a period of 12 months,

which will limit our liquidity options in the capital markets.

table below summarizes sales of our Class A common stock under the ATM program:

SUMMARIZES SALES OF OUR CLASS A COMMON STOCK

($ in thousands)

August 2021 (Inception) through

March 31, 2024

Class A shares sold

1 unchanged sentence

Fees paid to sales agent

Net proceeds $ 12,303

*After giving effect to the Reverse Stock Splits.

Common Stock and Warrant Offerings

June 2022 Offering

The shares of Class A common stock and June 2022 Warrants were sold in Units (the “June 2022 Units”), with each unit consisting of one share of Class A common stock or a June 2022 Pre-Funded Warrant and a June 2022 Standard Warrant to purchase one share of our Class A common stock.

The June 2022 Units were offered pursuant to the Shelf Registration Statement.

The June 2022 Standard Warrants are exercisable six months from the date of issuance at an exercise price equal to $ 5.00 per share of Class A common stock for a period of five years .

Each June 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $ 0.001 .

The June 2022 Offering generated gross proceeds of approximately $ 5.4 million and net proceeds to the Company of approximately $ 5.0 million.

All June 2022 Pre-Funded Warrants were exercised in July 2022, based upon which we issued an additional 49,500 shares of our Class A common stock, for de minimis net proceeds.

October 2022 Offering

On October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 695,555 shares of our Class A common stock, pre-funded warrants to purchase up to 137,778 shares of our Class A common stock (the "October 2022 Pre-Funded Warrants") and warrants to purchase up to 1,666,667 shares of our Class A common stock (the "October 2022 Standard Warrants").

The October 2022 units each consisted of one share of Class A common stock or a October 2022 Pre-Funded Warrant and two October 2022 Standard Warrants to purchase one share of our Class A common stock.

The October 2022 units were offered pursuant to the S-1 Registration Statement.

The October 2022 Standard Warrants are exercisable immediately at an exercise price equal to $ 0.90 per share of Class A common stock for a period of seven years .

Each October 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $ 0.0001 .

The October 2022 Offering generated gross proceeds of approximately $ 7.5 million and net proceeds to the Company of approximately $ 6.8 million.

All October 2022 Pre-Funded Warrants were exercised in November 2022, based upon which we issued an additional 137,778 shares of our Class A common stock, for de minimis net proceeds.

July 2023 Offering

On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A common stock (the "July 2023 Pre-Funded Warrants") and warrants to purchase up to 8,095,238 shares of our Class A common stock (the "July 2023 Standard Warrants").

The July 2023 units each consisted of one share of Class A common stock or a July 2023 Pre-Funded Warrant and two July 2023 Standard Warrants to purchase one share of our Class A common stock.

The July 2023 units were offered pursuant to an effective Registration Statement on Form S-1.

The July 2023 Standard Warrants are exercisable immediately at an exercise price equal to $ 1.05 per share of Class A common stock for a period of five years .

Each July 2023 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $ 0.0001 .

The July 2023 Offering generated gross proceeds of approximately $ 4.3 million and net proceeds to the Company of approximately $ 3.8 million.

As of the date of this Quarterly Report on Form 10-Q, 1,576,143 July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an additional 1,576,143 shares of our Class A common stock, for de minimis net proceeds.

In connection with the July 2023 Offering, the Company entered into privately negotiated agreements with holders participating in the offering to amend existing outstanding warrants to purchase up to 1,344,367 shares of Class A common stock that were previously issued in connection with the June 2022 and October 2022 Offerings at exercise prices per share of $ 50.00 and $ 9.00 , respectively, and expire on December 29, 2027 and November 1, 2029, respectively (collectively, the “Prior Warrants”), effective upon the closing of the July 2023 Offering to reduce the exercise price of the Prior Warrants to $ 1.05 , the exercise price of the warrants to purchase shares of Class A common stock offered in the July 2023 Offering.

Stock and Warrant Offerings

2023 Offering

June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an

aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A common

stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 8,095,238 shares of our Class A common stock (the

“July 2023 Standard Warrants”).

The July 2023 units each consisted of one share of Class A common stock or a July 2023 Pre-Funded

Warrant and two July 2023 Standard Warrants to purchase one share of our Class A common stock.

The July 2023 units were offered pursuant

to an effective Registration Statement on Form S-1.

The July 2023 Standard Warrants are exercisable immediately at an exercise price

equal to $ 1.05 per share of Class A common stock for a period of five years .

Each July 2023 Pre-Funded Warrant is exercisable immediately

with no expiration date for one share of Class A common stock at an exercise price of $ 0.0001 .

The July 2023 Offering generated gross

proceeds of approximately $ 4.3 million and net proceeds to the Company of approximately $ 3.8 million.

of the date of this Quarterly Report on Form 10-Q, all July 2023 Pre-Funded Warrants have been exercised, based upon which we issued

additional shares of our Class A common stock, for de minimis net proceeds.

connection with the July 2023 Offering, the Company entered into privately negotiated agreements with holders participating in the offering

to amend existing outstanding warrants to purchase up to 1,344,367 shares of Class A common stock that were previously issued in connection

with the June 2022 and October 2022 Offerings at exercise prices per share of $ 50.00 and $ 9.00 , respectively, and expire on December

29, 2027 and November 1, 2029 , respectively (collectively, the “Prior Warrants”), effective upon the closing of the July

2023 Offering to reduce the exercise price of the Prior Warrants to $ 1.05 , the exercise price of the warrants to purchase shares of Class

A common stock offered in the July 2023 Offering.

All other terms of the Prior Warrants remained unchanged.

Net Loss Per Share

Basic net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding during the period.

Diluted net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive instruments.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common stock is as follows (in thousands, except per share amounts):

Three months ended September 30, Nine months ended September 30,

Loss Per Share

net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number

of shares of Class A common stock outstanding during the period.

Diluted net loss per share of Class A common stock is computed by dividing

net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect

to potentially dilutive instruments.

reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common

stock is as follows (in thousands, except per share amounts):

OF EARNINGS PER SHARE BASIC AND DILUTED

(in thousands, except per share data)

Net loss $ ( 10,098 ) $ ( 137,245 ) $ ( 27,869 ) $ ( 170,475 )

Three months ended March 31,

(in thousands, except per share data)

Net loss attributable to non-controlling interests

Deemed Dividend on "October 2022 Standard Warrants"

$ ( 388 ) $ — $ ( 388 ) $ —

Net loss attributable to Class A common stockholders

1 unchanged sentence

Net loss per share of Class A common stock - basic and diluted

*After giving effect to the Reverse Stock Splits.

The June 2022 Pre-Funded Warrants, October 2022 Pre-Funded Warrants, July 2023 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class A common stock for the three and nine months ended September 30, 2023, respectively, beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive and their exercise was virtually assured.

On June 29, 2023 in connection with the July 2023 Offering, the Company entered into agreements with holders participating in the offering to amend existing outstanding warrants to purchase up to 1,344,367 shares of Class A common stock that were previously issued in November 2022 at an exercise price per share of $ 9.00 .

The warrants expire on November 1, 2029.

In connection with the amendment, the exercise price of the warrants was reduced to $ 1.05 .

The impact of the amendment resulted in a deemed dividend in the amount of $ 0.4 million.

The deemed dividend was calculated by the change in fair value.

For the three and nine months ended September 30, 2023 and 2022, respectively, shares of Class B common stock and stock op tions and warrants to purchase Class A common stock were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock because the effect would have been anti-dilutive.

Shares of our Class B common stock do not share in our earnings or losses and are therefore not participating securities.

As such, separate calculations of basic and diluted net loss per share for each of our Class B common stock under the two-class method have not been presented for the three and nine months ended September 30, 2022, respectively.

June 2022 Pre-Funded Warrants, October 2022 Pre-Funded Warrants, July 2023 Pre-Funded Warrants were included in the weighted-average

in the computation of basic net loss per share of Class A common stock for the three months ended March 31, 2024 and 2023, respectively,

beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive and their exercise was virtually assured.

the three months ended March 31, 2024 and 2023, respectively, shares of Class B common stock and stock options and warrants to purchase

Class A common stock were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock

because the effect would have been anti-dilutive.

of our Class B common stock do not share in our earnings or losses and are therefore not participating securities.

As such, separate

calculations of basic and diluted net loss per share for each of our Class B common stock under the two-class method have not been presented

for the three months ended March 31, 2024 and 2023, respectively.

As of December 31, 2022, all Common Units of the Operating Company

and Class B common stock had been exchanged for Class A common stock, and we owned 100.0 % of the economic interests in the Operating

COMPENSATION PLANS

Amended and Restated 2019 Equity Incentive Plan

In April 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”).

In August 2021, we adopted, and our shareholders approved, the Amended and Restated 2019 Equity Incentive Plan (the "Amended 2019 Plan"), which amends and restates the 2019 Plan in its entirety.

At our 2022 Annual Meeting of Stockholders on August 4, 2022, stockholders approved the Second Amended and Restated 2019 Equity Incentive Plan (the "Second Amended 2019 Plan") which, among other things, increased the number of shares of Class A common stock authorized for issuance under the Amended 2019 Plan.

Following the effect of the Reverse Stock Splits, the total number of shares of Class A common stock authorized for issuance is 110,000 shares.

The Second Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards.

The Second Amended 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders.

On June 2, 2023, the Company's stockholders approved a third amendment and restatement of the 2019 Plan (the "Third Amended Plan").

The Third Amended Plan, among other things, increases the number of shares of Class A common stock authorized for issuance under the Second Amended 2019 Plan by 209,862 shares to an aggregate of 319,862 shares.

As of the date of this Quarterly Report on Form 10-Q, we have not filed a Registration Statement on Form S-8 with the Securities and Exchange Commission to register the additional shares authorized under the Third Amended Plan.

Equity-Based Compensation Expense

Equity-based compensation expense is included within "salaries, benefits and payroll taxes" in our condensed consolidated statements of operations and comprehensive loss.

and Restated 2019 Equity Incentive Plan

April 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”).

In August 2021, we adopted, and our shareholders

approved, the Amended and Restated 2019 Equity Incentive Plan (the “Amended 2019 Plan”), which amends and restates the 2019

Plan in its entirety.

At our 2022 Annual Meeting of Stockholders on August 4, 2022, stockholders approved the Second Amended and Restated

2019 Equity Incentive Plan (the “Second Amended 2019 Plan”) which, among other things, increased the number of shares of

Class A common stock authorized for issuance under the Amended 2019 Plan.

Following the effect of the Reverse Stock Splits, the total

number of shares of Class A common stock authorized for issuance is 110,000 shares.

Second Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards.

The Second Amended 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive

officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders.

June 2, 2023, the Company’s stockholders approved a third amendment and restatement of the 2019 Plan (the “Third Amended

The Third Amended Plan, among other things, increases the number of shares of Class A common stock authorized for issuance

under the Second Amended 2019 Plan by 209,862 shares to an aggregate of 319,862 shares.

As of the date of this Quarterly Report on Form

10-Q, we have not filed a Registration Statement on Form S-8 with the Securities and Exchange Commission to register the additional shares

authorized under the Third Amended Plan.

Compensation Expense

compensation expense is included within “salaries, benefits and payroll taxes” in our condensed consolidated statements of

operations and comprehensive loss.

We recognized equity-based compensation expense as follows:

OF EQUITY BASED COMPENSATION EXPENSE

(in thousands)

For the three months ended

September 30, For the nine months ended

September 30,

(in thousands)

1 unchanged sentence

Restricted shares - Class A common stock

Restricted stock units (RSUs) - Class A common stock — — — 11

Total equity-based compensation expense

Total remaining unrecognized compensation expense as of September 30, 2023 was as follows:

Remaining Unrecognized Compensation Expense

September 30, 2023 Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized

(in thousands) (in years)

Stock options - Class A common stock $ 45 1.1

Restricted shares - Class A common stock 26 1.1

Total remaining unrecognized compensation expense $ 71

As a result of the IPO and the related transactions completed in April 2019, we owned a portion of the Common Units of the Operating Company, which is treated as a partnership for U.S.

As of March 31, 2024, there was no remaining unrecognized compensation expense.

a result of the IPO and the related transactions completed in April 2019, we owned a portion of the Common Units of the Operating Company,

which is treated as a partnership for U.S.

federal and most applicable state and local income tax purposes.

As a partnership, the Operating Company was generally not subject to U.S.

As a partnership, the Operating

Company was generally not subject to U.S.

federal and certain state and local income taxes.

Any taxable income or loss generated by the Operating Company was passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating Agreement.

Any taxable income or loss generated by the

Operating Company was passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata

basis, in accordance with the terms of the Operating Agreement.

The Operating Company was also subject to taxes in foreign jurisdictions.

We are a corporation subject to U.S.

federal income taxes, in addition to state and local income taxes, based on our share of the Operating Company’s pass-through taxable income.

Effective on December 31, 2022, the Operating Company became wholly owned by us.

As a result, the Operating Company’s tax status was converted from a partnership to a disregarded entity.

federal income taxes, in addition to state and local income taxes, based on our share of the Operating

Company’s pass-through taxable income.

on December 31, 2022, the Operating Company became wholly owned by us.

As a result, the Operating Company’s tax status was converted

from a partnership to a disregarded entity.

Starting in 2023, 100% of the Operating Company’s U.S.

income and expenses will be included in our US and state tax returns.

During the three and nine months ended September 30, 2023 and 2022, respectively, management performed an assessment of the realizability of our deferred tax assets based upon which management determined that it is not more likely than not that the results of operations will generate sufficient taxable income to realize portions of the net operating loss benefits.

Consequently, we established a full valuation allowance against our deferred tax assets and reflected a carrying balance of $ 0 as of September 30, 2023 and December 31, 2022, respectively.

In the event that management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance will be made, which would reduce December the provision for income taxes.

Uncertain Tax Positions

For the three and nine months ended September 30, 2023 and 2022, respectively, we did no t have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period.

income and expenses is included

in our US and state tax returns.

the three months ended March 31, 2024 and 2023, respectively, management performed an assessment of the realizability of our deferred

tax assets based upon which management determined that it is not more likely than not that the results of operations will generate sufficient

taxable income to realize portions of the net operating loss benefits.

Consequently, we established a full valuation allowance against

our deferred tax assets and reflected a carrying balance of $ 0 as of March 31, 2024 and December 31, 2023, respectively.

that management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount,

an adjustment to the valuation allowance will be made, which would reduce December the provision for income taxes.

Tax Positions

the three months ended March 31, 2024 and 2023, respectively, we did no t have any unrecognized tax benefits as a result of tax positions

taken during a prior period or during the current period.

No interest or penalties have been recorded as a result of tax uncertainties.

The Company is subject to audit examination for federal and state purposes for the years 2019 – 2023.

Tax Receivable Agreement (TRA)

We entered into the TRA with the Operating Company and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment by the Operating Company to the members of 85 % of the amount of tax benefits, if any, that we may actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions of Common Units as described in “Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under the TRA.

The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits.

As of the date these financial statements were issued, there were not any ongoing income tax audits.

Receivable Agreement (TRA)

entered into the TRA with the Operating Company and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment

by the Operating Company to the members of 85 % of the amount of tax benefits, if any, that we may actually realize (or in some circumstances

are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions of Common Units as described in

“Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under

annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such

The Operating Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize.

The TRA payments are not conditioned upon any continued ownership interest in the Operating Company.

The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company.

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate.

As noted above, we evaluated the realizability of the deferred tax assets resulting from the IPO and the related transactions completed in April 2019 and established a full valuation allowance against those benefits.

As a result, we determined that the amount or timing of payments to noncontrolling interest holders under the TRA are no longer probable or reasonably estimable.

Based on this assessment, our TRA liability was $ 0 as of September 30, 2023 and December 31, 2022.

If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, we will record a liability related to the TRA, which would be recognized as expense within our condensed consolidated statements of operations and comprehensive (loss) income.

During the three and nine months ended September 30, 2023 and 2022, respectively, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA.

The TRA payments

are not conditioned upon any continued ownership interest in the Operating Company.

The rights of each noncontrolling interest holder

under the TRA are assignable to transferees of its interest in the Operating Company.

The timing and amount of aggregate payments due

under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates

each year and the applicable tax rate.

noted above, we evaluated the realizability of the deferred tax assets resulting from the IPO and the related transactions completed

in April 2019 and established a full valuation allowance against those benefits.

As a result, we determined that the amount or timing

of payments to noncontrolling interest holders under the TRA are no longer probable or reasonably estimable.

Based on this assessment,

our TRA liability was $ 0 as of March 31, 2024 and December 31, 2023.

utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, we will record a liability related

to the TRA, which would be recognized as expense within our condensed consolidated statements of operations and comprehensive (loss)

the three months ended March 31, 2024 and 2023, respectively, we did not make any payments, inclusive of interest, to members of the

Operating Company pursuant to the TRA.

SEGMENT REPORTING

We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources.

Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes.

define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources.

Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making

Our CODM is a committee comprised of our CEO and our CFO.

We determined we had two operating segments as of September 30, 2023, which are the same as our reportable segments:

(1) Consumer Goods and (2) Industrial Goods.

determined we had two operating segments as of March 31, 2024, which are the same as our reportable segments:

(1) Consumer Goods and

(2) Industrial Goods.

These operating segments align with how we manage our business as of the third quarter of 2023.

The accounting policies of the reportable segments are the same as those described in "Note 2 - Summary of Significant Accounting Policies."

The Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary Greenlane Brands, including Eyce, DaVinci, Groove, Marley Natural, Keith Haring and Higher Standards, as well as lifestyle products and accessories from leading brands, such as Storz and Bickel, PAX, and many more.

The Consumer Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin Greenlane Brands.

The Industrial Goods segment focuses on serving the premier brands, operators, and retailers through our wholesale operations by providing ancillary products essential to their growth, such as customizable packaging and supply products, which includes our vaporization solutions offering including CCELL branded products.

Our CODM allocates resources to, and assesses the performance of, our two operating segments based on the operating segments' net sales and gross profit.

The following table sets forth information by reportable segment for the three and nine months ended September 30, 2023 and 2022, respectively.

There were no material intersegment sales during the three and nine months ended September 30, 2023 and 2022, respectively.

The accounting

policies of the reportable segments are the same as those described in “Note 2 - Summary of Significant Accounting Policies.”

Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary

Greenlane Brands, including Groove, Marley Natural, Keith Haring and Higher Standards, as well as lifestyle products and

accessories from leading brands, such as Storz and Bickel, PAX, and many more.

The Consumer Goods segment forms a central part of our

growth strategy, especially as it relates to scaling our own portfolio of higher-margin Greenlane Brands.

Industrial Goods segment focuses on serving the premier brands, operators, and retailers through our wholesale operations by providing

ancillary products essential to their growth, such as customizable packaging and supply products, which includes our vaporization solutions

offering including CCELL branded products.

CODM allocates resources to, and assesses the performance of, our two operating segments based on the operating segments’ net sales

and gross profit.

The following table sets forth information by reportable segment for the three months ended March 31, 2024 and 2023,

respectively.

There were no material intersegment sales during the three months ended March 31, 2024 and 2023, respectively.

following table sets forth our net sales by major product category:

OF NET SALES BY MAJOR PRODUCT CATEGORY

(in thousands)

For the three months ended

September 30, 2023 For the three months ended

September 30, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

Net sales $ 5,988 $ 5,812 $ 11,800 $ 8,565 $ 20,115 $ 28,680

Cost of sales 4,197 4,474 8,671 7,937 15,774 23,711

Gross profit $ 1,791 $ 1,338 $ 3,129 $ 628 $ 4,341 $ 4,969

For the nine months ended

September 30, 2023 For the nine months ended

September 30, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

Net sales $ 19,823 $ 35,561 $ 55,384 $ 41,617 $ 73,513 $ 115,130

March 31, 2024

For the three months ended

March 31, 2023

(in thousands)

Cost of sales

Gross profit $ 5,881 $ 7,341 $ 13,222 $ 6,513 $ 12,523 $ 19,036

The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:

As of September 30, 2023 As of December 31, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

Accounts receivable, net $ 1,129 $ 796 $ 1,925 $ 967 $ 5,501 $ 6,468

Inventories, net $ 15,032 $ 7,606 $ 22,638 $ 19,259 $ 21,384 $ 40,643

Vendor deposits $ 2,205 $ 1,146 $ 3,351 $ 3,269 $ 3,027 $ 6,296

following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

of March 31, 2024

of December 31, 2023

receivable, net

SUBSEQUENT EVENTS

May 6, 2024, the Company, Warehouse Goods and Synergy Imports LLC (“Synergy”) entered into an asset purchase agreement, dated

May 1, 2024 (the “Asset Purchase Agreement”) pursuant to which Synergy purchased all of the intellectual property, a specified

amount of inventory, and other assets related to the Eyce and DaVinci brands.

In consideration for the acquisition, all parties entered

into a loan modification agreement, effective May 1, 2024 (the “Loan Modification Agreement”) and an amended and restated

secured promissory note, effective May 1, 2024 (the Amended and Restated Secured Promissory Note”), an amendment to the original

Eyce and Davinci Asset Purchase Agreements, a distribution agreement, the termination of a license granted by Eyce, and the termination

of certain consulting and employment agreements.

The updated date of maturity will be through July 2024.

April 1, 2024 through July 24, 2024, the Company issued 1,497,000 shares of Class A common shares in connection with the exercise of

the remaining penny warrants as discussed in Note 9 of these consolidated financial statements.

June 18, 2024, the Board unanimously approved and declared advisable, and recommended that our stockholders approve at a Special Meeting

to take place on July 29, 2024, the adoption of the 2024 Amendment to effect a reverse stock split of our Common Stock at any whole

number between, and inclusive of, one-for-two to one-for-twenty.

Approval of the Proposed 2024 Reverse Stock Split at the 2024 Annual

Meeting will grant the Board the authority, but not the obligation, to file the 2024 Amendment to effect the Proposed 2024 Reverse Stock

Split no later than August 5, 2024, with the exact ratio and timing of the Proposed 2024 Reverse Stock Split to be determined at the

discretion of the Board.

The exact split ratio selected by the Board will be publicly announced prior to the effectiveness of the Proposed

2024 Reserve Stock Split.

For additional information about the July 29, 2024 Special Meeting and the Proposed 2024 Reverse Stock Split,

please see the Company’s Definitive Proxy Statement filed with the SEC on June 28, 2024.

May 2024, the Company entered into an agreement with a group of individuals to sell 100 % equity interests of one of the Company’s

wholly-owned subsidiaries, Shavita B.V.

and substantially all of the assets of ARI Logistics B.V.

As of the date that these financial

statements were available to be issued, the transaction was not officially closed as there was pending consideration to be transferred

to the Company.

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

What changed 10-Q

Item 1. Financial Statements