What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-21 compared with 2024-07-19 · 301 added, 296 removed, 232 unchanged (72% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

in 2005, Greenlane is the premier global platform for the development and distribution of premium cannabis accessories, vape

devices, and lifestyle products.

In 2021, we completed several acquisitions along with a transformative merger with KushCo Holdings,

adding a significant industrial line of business to the Greenlane platform.

These acquisitions strengthened our leading position as

a consumer ancillary products business and significantly expanded our customer network, bringing strategic relationships with

leading cannabis multi-state-operators (“MSOs”), cannabis single-state operators (“SSOs”), and Canadian

licensed-producers (“LPs”).

Greenlane is a leading ancillary cannabis company, providing a wide array of consumer

ancillary products and industrial ancillary products to thousands of cannabis producers, processors, brands, and retailers

(“Cannabis Operators”), in addition to specialty retailers, smoke shops and head shops, convenience stores, and

consumers directly through our own proprietary web stores and large online marketplaces such as Amazon.

have been developing a world-class portfolio of our own proprietary brands (the “Greenlane Brands”) and carefully

curated third-party products 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 our recently launched more affordable product line – Groove,

innovative silicone pipes and accessories and premium ancillary product brand – Higher Standards.

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

K.Haring Glass Collection.

Since the end of 2021, the Company has invested significantly in technology,

including its e-commerce platforms, internal ERP systems, and B2B capabilities.

Our world-class product portfolio is offered to customers

through our proprietary, owned and operated e-commerce platforms which include Vapor.com, PuffItUp.com, HigherStandards.com, MarleyNaturalShop.com

and Wholesale.Greenlane.com.

These platforms allow us to reach customers directly with helpful resources and a seamless purchasing experience.

in 2005, Greenlane is the premier global platform for the development and distribution of premium cannabis accessories, vape devices,

and lifestyle products.

In 2021, we completed several acquisitions along with a transformative merger with KushCo Holdings, adding a

significant industrial line of business to the Greenlane platform.

These acquisitions strengthened our leading position as a consumer

ancillary products business and significantly expanded our customer network, bringing strategic relationships with leading cannabis multi-state-operators

(“MSOs”), cannabis single-state operators (“SSOs”), and Canadian licensed-producers (“LPs”).

is a leading ancillary cannabis company, providing a wide array of consumer ancillary products and industrial ancillary products to thousands

of cannabis producers, processors, brands, and retailers (“Cannabis Operators”), in addition to specialty retailers, smoke

shops and head shops, convenience stores, and consumers directly through our own proprietary web stores and large online marketplaces

such as Amazon.

have been developing a world-class portfolio of our own proprietary brands (the “Greenlane Brands”) and carefully curated

third-party products 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 our recently launched more affordable product line – Groove, innovative silicone pipes

and accessories and premium ancillary product brand – Higher Standards.

We also have category exclusive licenses for the premium

Marley Natural branded products, as well as the K Haring Glass Collection.

In 2024, we expanded our assortment to include health and safety products and entered into strategic partnerships

with Safety Strips and Swabtek, offering fentanyl and Drink Spike testing products.

the end of 2021, the Company has invested significantly in technology, including its e-commerce platforms, internal ERP systems, and

B2B capabilities.

Our world-class product portfolio is offered to customers through our proprietary, owned and operated e-commerce platforms

which include Vapor.com, PuffItUp.com, HigherStandards.com, MarleyNaturalShop.com and Wholesale.Greenlane.com.

These platforms allow

us to reach customers directly with helpful resources and a seamless purchasing experience.

merchandise vaporizers, packaging, and other ancillary products in the United States, Canada, Europe and Latin America.

We distribute

products to retailers through wholesale operations and distribute products to consumers through our e-commerce platforms We operate

our own distribution centers in the United States, while also utilizing third-party logistics (“3PL”) locations in Canada.

We have made tremendous progress consolidating and streamlining our warehouse and distribution operations over the last two years.

manage our business in two different, but complementary, business segments.

The first is the Consumer Goods segment, which focuses on

serving consumers across wholesale, retail, and e-commerce operations—offering both our Greenlane Brands as well as ancillary products

and accessories from select leading third-party brands, such as Storz and Bickel, Grenco Science, PAX, Arizer and more.

Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin proprietary

owned brands.

In addition to our Consumer Goods segment, we have our Industrial Goods segment, which focuses on serving Cannabis Operators

by providing ancillary products essential to their daily operations and growth, such as packaging and vaporization solutions, including

our Greenlane Brand Pollen Gear.

Refer to “Note 12— Segment Reporting” within Item 8 to this Annual Report on Form

10-K for additional information on our reportable segments.

products to retailers through wholesale operations and distribute products to consumers through our e-commerce platforms We operate our

own distribution centers in the United States, while also utilizing third-party logistics (“3PL”) locations in Canada.

have made tremendous progress consolidating and streamlining our warehouse and distribution operations over the last two years.

to Accelerate Path to Profitability and Capitalize the Business

today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving

working capital are paramount.

At Greenlane, we are intensely focused on making our

business profitable and well-capitalized for long-term sustainability.

today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving working capital are

At Greenlane, we are intensely focused on making our business profitable and well-capitalized for long-term sustainability.

Our key initiatives include:

Enhancements:

We remain fully committed to improving our technology, particularly our B2B and e-commerce

platforms, to provide a seamless shopping experience for our wholesale and retail customers.

Footprint Rationalization:

In 2023, we optimized our facilities footprint by reducing warehouse and office space while increasing operational

efficiency and improving fulfillment practices.

The full benefit of those efforts are expected to be realized in 2024.

We have significantly reduced our headcount and associated salary expenses, focusing on maintaining

a core group of key employees as we collectively right-size the business.

Structure Optimization:

We remain fully committed to improving our technology, particularly our B2B and e-commerce platforms, to provide a

seamless shopping experience for our wholesale and retail customers.

Facility Footprint Rationalization:

In 2023 and 2024, we optimized our facilities footprint by reducing warehouse and office space while increasing operational efficiency

and improving fulfillment practices.

Headcount Reduction:

have significantly reduced our headcount and associated salary expenses, focusing on maintaining a core group of key employees as

we collectively right-size the business.

Cost Structure Optimization:

We continue to reduce our overall cost structure while improving margins.

In April 2023, we formed two strategic

partnerships (described below in greater detail) to increase margins and significantly reduce working capital requirements in our Industrial

Goods segment.

Similarly, our Consumer Goods segment restructured arrangements with several third-party brands in 2022 and 2023

to reduce our working capital needs.

In 2023, we implemented a new inventory management and lifecycle strategy

that is focused on a quarterly turn and a regular review of inventory to avoid future write-offs.

In April 2023, we formed two strategic partnerships (described

below in greater detail) to increase margins and significantly reduce working capital requirements.

Inventory Management:

2024, we continued to refine and improve our inventory management and lifecycle strategy that is focused on a quarterly turn and

a regular review of inventory to avoid future write-offs.

Sales Force Upgrade:

We have upgraded and will continue to upgrade our

sales force from a solely account management centric team to a skilled and driven sales team to acquire new customers while maintaining

excellent service with our existing customers

have upgraded and will continue to upgrade our sales force from a solely account management centric team to a skilled and driven

sales team to acquire new customers while maintaining excellent service with our existing customers.

Product Innovation:

In 2023, we launched Groove, an innovative new product

line with a value-based price point and in 2024 we have begun to expand our product offering to further enhance our assortment available

to our customers.

We continue to seek opportunities for securing investment capital to leverage our platform, increase availability and

reduce stockouts of our high demand third-party brands, invest in marketing and sales, and improve our product

believes that these initiatives will significantly reduce costs, help accelerate the Company’s path to profitability, support business

growth, and allow the Company to reinvest capital into its highest demand and highest potential product lines.

2024, we expanded our product offering to further enhance our assortment available to our customers to include the most up to date

technology available and launched our health and safety product line promoting safe and responsible consumption.

Capital Investment:

continue to seek opportunities for securing investment capital to leverage our platform, increase availability and reduce stockouts

of our high demand third-party brands, invest in marketing and sales, and improve our product offerings.

believes that these initiatives in conjunction with the capital received in the February 2025 Private Placement will significantly

reduce costs, help accelerate the Company’s path to profitability, support business growth, and allow the Company to reinvest

capital into its highest demand and highest potential product lines.

2023 and 2024, the Company received capital from various sources permitting it to right-size the business and position the company for

growth and in 2025 the Company received capital from a Private Placement in February.

Such sources are described in greater detail in the Liquidity and Capital Resources Section of this report.

During 2022, the

Company also monetized several non-core assets to provide necessary working capital including the sale and lease-back of its headquarters

building and the sale of its interest in the Vibes brand.

During 2023 and 2024, the Company also entered into certain arrangements to reduce working capital requirements and

improve its balance sheet.

2023 and 2024, the Company also entered into certain arrangements to reduce working capital requirements and improve its balance sheet.

April 2023, we successfully entered into two strategic partnerships which management believes will help significantly reduce our overall

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d/b/a MarijuanaPackaging.com (“MJ Pack”), a leading provider of packaging solutions to the cannabis industry.

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.

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.

On 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.

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.

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 Loan Modification Agreement was restructured on

October 29, 2024 as part of the First Amendment to Amended and Restated Secured Promissory Note.

PACT Act Exemption

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of the controls, processes and systems required by the USPS in connection with the shipment of ENDS products.

We expect the ability to

fulfill ENDS orders with the USPS to allow us to reduce shipping costs, decrease fulfillment times and enhance the overall customer experience

for approved wholesale customers.

We currently possess the

ability to fulfill ENDS orders with the USPS which allows us to reduce shipping costs, decrease fulfillment times and enhance the overall

customer experience for approved wholesale customers.

June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected a one-for-10 reverse stock split

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

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

June 18, 2024, the Board unanimously approved and declared advisable, and recommended that our stockholders approve at a Special Meeting

that took 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 Special

Meeting granted 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.

On July 23, 2024, the Board approved the reverse split at a ratio of one-for-11 and the Amendment has been filed

with the Secretary of State of the State of Delaware, that became effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening

of trading on the Nasdaq.

For additional information about the July 29, 2024 Special Meeting and the 2024 Reverse Stock Split, see the

Company’s Definitive Proxy Statement filed with the SEC on June 28, 2024 and Form 8-K filed with the SEC on July 31, 2024.

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

All outstanding

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of December 31, 2022, we held all the outstanding Common Units in the Operating Company and are the sole member.

As a result, in

2023, 100% of the Operating Company’s US and state income and expenses are now included in our US and state tax

As a result, beginning

2023, 100% of the Operating Company’s US and state income and expenses are included in our US and state tax returns.

deferred income tax assets and liabilities are computed for differences between the tax basis and financial statement amounts that will

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General and administrative

Goodwill and indefinite-lived intangibles impairment charge

Definite-lived intangibles impairment charge

PP&E impairment charge

Impairment of property and equipment

Depreciation and amortization

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Interest expense

Employee retention credits

Change in fair value of contingent consideration

Loss on extinguishment of debt

Other expense, net

Total other (expense) income, net

Total other expense, net

Loss before income taxes

(Benefit from) provision for income taxes

Net (loss) income attributable to non-control interest

Net loss attributable to non-control interest

Net loss attributable to Greenlane Holdings, Inc.

Results of Operations

the year ended December 31, 2023, total net sales were approximately $65.4 million, compared to approximately $137.1 million for the

year ended December 31, 2022, representing a decrease of $71.7 million, or 52.3%.

The year-over-year decrease was a result of the Industrial

segment transitioning to a commission revenue model versus gross revenue previously recorded for the largest vaporizer product customers

and discontinuing the packaging products business.

The Consumer segment sales decreased due to declining business globally, reduction

in sales staff and marketing spend and the company was out of stock for high demand inventory items due to capital restrictions to invest

in inventory purchases.

the year ended December 31, 2024, total net sales were approximately $13.3 million, compared to approximately $65.4 million for the year

ended December 31, 2023, representing a decrease of $52.1 million, or 79.7%.

The year-over-year decrease in net sales was due to a major

restructuring in April of 2023, involving our packaging and industrial vaping product lines;

transitioning much of this business from

a gross sales to a commission structure to preserve working capital.

Revenues decreased in the Consumer Brands Group due, in part, to

restructuring efforts and shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing third-party

brand offerings, which generated top line revenue with lower margins.

The consumer products were affected by the inability to access

capital markets on equitable terms, resulting in stock-outs and shortages of higher velocity inventory.

The Company is continuing to

focus on profitable revenue and as a result top line revenue has significantly been reduced.

Concurrently, the Company has continued

its focus on right-sizing the business during the fiscal year ended December 31, 2024 and through present, in an effort to reduce sales

and marketing costs and reduce or eliminate certain administrative functions.

of Sales and Gross Margin

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margin increased by 20.0% to 47.3% for the year ended December 31, 2024, compared to gross margin of 27.3% for the same period in 2023.

The increase in gross margins is related to transitioning to a commission revenue model for the majority of the vaporizer sales with

100% margin versus gross revenue with lower margins.

Also contributing to the increase in margin is the Company’s continued focus

on consumer in-house brands with higher margins and moving away from third-party brands with lower margins.

The increase in gross margins is in part related to transitioning to a commission revenue model for the majority of the vaporizer sales

with 100% margin versus gross revenue with lower margins.

Benefits and Payroll Taxes

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2024, compared to $17.5 million for the same period in 2023.

The decrease is related to a major restructuring effort by the company

to reduce headcount and cost to align with revenue.

decrease is related to the reduction in workforce to right-size the business and focus on profitability.

and Administrative Expenses

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31, 2024 , compared to the same period in 2023 .

decrease is related to a major reduction in expenses across to align with revenue

and Indefinite-Lived Intangibles Impairment Charge

incurred a goodwill and indefinite-lived intangibles impairment charge of approximately $71.4 million and a definite-lived

intangibles impairment charge of approximately $50.7 million during the twelve months ended December 31, 2022, compared to no such

impairment charge for the comparable period in 2023.

We incurred a impairment charge of approximately $7.3 million to fixed assets

related to the ERP system during the year ended December 31, 2022, compared to no such impairment charge fore the comparable year in

This impairment charges were due to declining business and declining enterprise value.

decrease is related to major restructuring effort by the Company to reduce cost and right-size the business.

The Company focused on reduction

across the board in general and administrative expenses and drove large decreases in professional and outside services, facility expenses,

outbound freight, other general and administrative, marketing, taxes and licenses, and general insurance.

and Amortization Expense

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compared to the same period in 2023 .

The decrease is primarily related to the intangible

and fixed asset impairments recorded as of December 31, 2023, reducing amortization expense.

The decrease is related to a major restructuring

effort to reduce cost and right-size the business resulting in the sale and disposal of assets related to reducing our warehousing and

office footprint.

Impairment of property and equipment

Impairment of property and equipment increased $0.2 million, for the year ended December 31, 2024, compared to the same period in 2023.

The increase is related to the write-off of certain fixed assets during the year ended December 31, 2024.

Income (Expense), Net

expense increased approximately $0.5 million during the fiscal year 2024 versus fiscal year 2023.

The increase is primarily related to

the exiting ABL facility which accelerated deferred interest expense as well as the promissory notes for the Eyce and DaVinci acquisition.

The increase is primarily related to overall debt financing and refinancing debt on more favorable terms.

in fair value of contingent consideration .

was a change in fair value of contingent consideration of approximately $1.0 million for the year ended December 31, 2024 compared to

the same period in 2023.

The change is primarily related to reductions in earnouts related to Davinci and Eyce products.

on debt extinguishment

was an increase in loss on debt extinguishment of approximately $0.9 million for the year ended December 31, 2024, compared to the

same period in 2023.

The change is primarily related to the October 29, 2024 debt restructuring during the year ended December 31,

For further information, see Note 6, “Debt” of the Notes to Consolidated Financial Statements in Part II, Item 8

of this Form 10-K.

expense, net.

expense, net, increased by approximately $0.3 million for the year ended December 31, 2023 , for slight changes to non-recurring costs during the year ended December 31, 2023.

Operating Performance

the completion of the KushCo merger in late August 2021, we reassessed our operating segments based on our new organizational structure.

Based on this assessment, we determined we had two operating segments as of December 31, 2021, which are the same as our reportable segments:

(1) Consumer Goods, which largely comprises Greenlane’s legacy operations across the United States, Canada, and Europe, and (2)

Industrial Goods, which largely comprises KushCo’s legacy operations.

These changes in operating segments align with how we manage

our business as of the fourth quarter of 2023.

Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary

brands, including Eyce, DaVinci, Marley Natural, Keith Haring, and Higher Standards, as well as lifestyle products and accessories from

leading brands, like Storz and Bickel, Grenco Science, 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 proprietary owned brands.

Industrial Goods segment focuses on serving the premier cannabis 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 Greenlane

Brand Pollen Gear and vaporization solutions offering which includes CCELL branded products.

“Chief Operations Decision Marker (“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 years ended December 31, 2023 and 2022:

% of Total Net sales

Consumer Goods

Industrial Goods

Total net sales

% of Segment Net sales

Cost of sales:

Consumer Goods

Industrial Goods

Total cost of sales

Gross profit:

Consumer Goods

Industrial Goods

Total gross profit

the year ended December 31, 2023, our Consumer Goods operating segment reported net sales of approximately $28.7 million compared to

approximately $48.1 million for the same period in 2022 ,

representing a decrease of $19.4 million or 40.3%.

The 2023 decline in the Consumer Goods segment is due to a major

restructuring effort by the Company during fiscal year 2023 to reduce sales and marketing cost to align with revenue, sale of the

Company’s minority interest in Vibes brand and a shift in strategy to focus on in-house brands that have a higher margin

profile and rationalized third-party brand offering generating top line revenue with lower margins.

the year ended December 31, 2023, cost of sales decreased by $19.8 million, or 51.3%, as compared to the same period in 2022 .

The decrease in cost of sales was primarily due to the 40.3% decrease in Consumer Goods net sales.

margin increased to approximately 34.7% for the year ended December 31, 2023, compared to gross margin of approximately

20.0% for the same period in 2022, as the Company has

shifted focus on margins versus overall topline revenues in an effort to move to a net positive operating cash flow.

the year ended December 31, 2023, our Industrial Goods operating segment reported net sales of approximately $36.6 million compared to

approximately $89.0 million for the same period in 2022 ,

representing an decrease of $52.3 million or (58.8%).

The year-over-year decrease was a result of the Industrial segment transitioning

to a commission revenue model versus gross revenue previously recorded for the largest vaporizer product customers and discontinuing

the packaging products business.

the year ended December 31, 2023, cost of sales decreased by $44.8 million, or 60.9%, as compared to the same period in 2022 .

The decrease is consistent with our overall decrease in revenues.

margin was approximately 21.4% for the year ended December 31, 2023, compared to gross margin of approximately 17.3% for the same period

in 2022 , representing

4.1% year over year increase.

expense, net, decreased by approximately $0.8 million for the year ended December 31, 2024 compared to the same period in 2023.

is primarily due to non-recurring costs during the year ended December 31, 2023.

Sales by Geographic Regions

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representing a decrease of $47.6 million, or 81.4%.

The year-over-year decrease was primarily due to an overall business decline in the

Industrial and Consumer Goods segments as described above.

The year-over-year decrease was primarily due to the Company restructuring as described

the year ended December 31, 2024, our Canadian net sales were approximately $0.2 million, compared to approximately $1.3 million for

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representing a decrease of $1.1 million, or 87.9%.

The year-over-year decrease was primarily due to an overall business decline in the

Industrial and Consumer Goods segments as described above.

The year-over-year decrease was primarily due to the Company restructuring as described

the year ended December 31, 2024, our European net sales were approximately $2.2 million, compared to approximately $5.5 million for

the same period in 2023 ,

representing an increase of $0.11 million, or 2.6%.

representing a decrease of $3.3 million, or 60.0%.

The year-over-year decrease was primarily due to the Company restructuring as described

Capital Resources and Going Concern

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 other equity issuances.

As of December 31, 2023, we had approximately $0.5 million of cash, of which none

was restricted and $0.1 million was held in foreign bank accounts, and approximately $3.7 million of working capital, which is

calculated as total current assets minus total current liabilities, as compared to approximately $6.5 million of cash, of which $0.8

million was held in foreign bank accounts, and approximately $41.0 million of working capital as of December 31, 2022.

repatriation of cash balances from our foreign subsidiaries could have adverse tax impacts or be subject to capital controls;

however, these balances are generally available to fund the ordinary business operations of our foreign subsidiaries without legal

or other restrictions.

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

December 31, 2023, 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 fulfill our capital needs as highlighted below.

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

from equity issuances, such as our June 2022, October 2022 and July 2023 Offerings, each as described and defined

from equity issuances.

As of December 31, 2024, we had approximately $0.9 million of cash, of which none was restricted and $0.1 million

was held in foreign bank accounts, and approximately $1.5 million of working capital, which is calculated as total current assets minus

total current liabilities, as compared to approximately $0.5 million of cash, of which none was restricted and $0.1 million was held

in foreign bank accounts, and approximately $3.7 million of working capital as of December 31, 2023.

The repatriation of cash balances

from our foreign subsidiaries could have adverse tax impacts or be subject to capital controls;

however, these balances are generally

available to fund the ordinary business operations of our foreign subsidiaries without legal or other restrictions.

believe that our cash on hand and the cash flow that we generate from our operations and financing activities from recent equity

fundraisings will 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 December 31, 2024, we expect to have sufficient cash to fund planned operations into the second quarter of 2026.

largely due to the Company’s Private Placement that occurred on February 19, 2025.

See Note 13 for more

primary requirements for liquidity and capital are working capital, equity fundraising, 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

equity and debt transactions , as well as proceeds from equity issuances, such as our July 2023, August 2024, and February 2025 Offerings, each as

described and defined below.

Program and Shelf Registration Statement

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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, we are unable to issue additional shares of Class A common stock pursuant to the ATM Program

or otherwise use the Shelf Registration Statement.

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.

the untimely filing of certain of our Quarterly and Annual Reports that was remediated in 2024, we are unable to issue additional

shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement and once eligible will

be required to file a new S-3 for utilization of our Shelf Registration Statement.

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 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.

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

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

August 12, 2024, the Company entered into a securities purchase agreement with three different funds of a single institutional

investor for aggregate gross cash proceeds of $6.5 million.

In connection with the private placement, the Company will issue an

aggregate of 2,363,637 units and pre-funded units.

The pre-funded units will be sold at the same purchase price as the units, less

the pre-funded warrant exercise price of $0.001.

Each unit and pre-funded unit will consist of one share of common stock (or one

pre-funded warrant) and two common warrants, each exercisable for one share of common stock at an exercise price of $2.50 per share.

The common warrant will be exercisable on the initial exercise date described in the common warrant and will expire 5.0 years from

October 29, 2024, the Company entered into an Exchange Agreement with its Senior Subordinated Lender, whereby the Company agreed to exchange

an aggregate of $4,617,307 of debt originally owed to Agile Capital Funding LLC and Cedar Advance LLC in a 3(a)(9) exchange for new Senior

Subordinated Notes in the principal amount of $4,000,000 due one year from issuance (the “Exchange Note”), reducing outstanding

indebtedness by approximately $617,000.

The Exchange Note was convertible at the option of the holder at $3.17 per share.

In connection

with the Exchange, the Company issued an aggregate of 1,261,830 five year warrants with an exercise price of $3.04 per share (the “Exchange

The Exchange Note was repaid out of the proceeds of the February 2025 Offering.

addition, pursuant to the terms of the Exchange Agreement, the Company agreed to issue warrants to the Holders, with an initial exercise

price of $3.04, exercisable 180 days after issuance (the “Exchange Inducement Warrants”).

The Exchange Inducement Warrants

were issued to incentivize the holders to exercise some or all of their existing warrants originally issued on August 13, 2024 (the “Existing

Warrants”) for cash, which existing warrants have an exercise price of $2.50 per share.

The Exchange Inducement Warrants are initially

exercisable for zero shares, but to the extent that the Holders exercise any of such Existing Warrants during the one-hundred sixty day

inducement period, the Exchange Inducement Warrants will become exercisable on April 30, 2025 for 200% of the number of Existing Warrants

exercised for cash during such inducement period.

As part of the February 2025 Offering, the exercise price of these warrants was adjusted

to $1.19 per share.

pursuant to the Exchange Agreement, the Senior Subordinated Lender agreed that it will exercise its Existing Warrants for cash prior

to exercising any of its outstanding pre-funded warrants, contingent on the market price of the common stock being above $2.50 per share

and certain other conditions.

The above agreement will terminate upon the Company receiving certain cash proceeds and prepaying at least

$2,250,000 of Cobra Alternative Capital Strategies LLC (“Cobra”) Notes.

The Cobra Note was repaid out of the February 2025

February 18, 2025, the Company entered into definitive agreements with institutional investors for the purchase and sale of approximately

$25.0 million of shares of the Company’s Class A common stock (“Common Stock” and investor warrants at a price of $1.19

per Common Unit.

The entire transaction was priced at the market under Nasdaq rules.

offering consisted of the sale of Common Units (or Pre-Funded Units), each consisting of (i) one (1) share of Common Stock or one (1)

Pre-Funded Warrant, (ii) one (1) Series A PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price

of $1.4875 (“Series A Warrant”) and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of Common Stock

per warrant at an exercise price of $2.975 (“Series B Warrant” and together with the Series A Warrant, the “Warrants”).

The initial exercise price of each Series A Warrant is $1.4875 per share of Common Stock.

The Series A Warrants are exercisable following

stockholder approval and expire five (5) years thereafter.

The number of securities issuable under the Series A Warrant is subject to

adjustment as described in more detail in the Series A Warrant.

The initial exercise price of each Series B Warrant is $2.975 per share

of Common Stock or pursuant to an alternative cashless exercise option.

The Series B Warrants are exercisable following stockholder approval

and expire two and one-half (2.5) years thereafter.

The number of securities issuable under the Series B Warrant is subject to adjustment

as described in the Series B Warrant.

on February 18, 2025, the Company entered into an Exchange Agreement with certain holders (the “Holders”) of three tranches

of warrants to purchase Common Stock previously issued by the Company in August 2024 and October 2024.

Under such Exchange Agreement,

such Holders agreed to exchange with the Company such existing warrants for approximately 6.1 million new warrants to purchase common

stock, substantially in the form of the Series B Warrants.

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

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Receivables Financings

In 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.

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.

As of December 31, 2024, there were no outstanding balances under this agreement.

See “Note 6 - Long Term Debt” for more

June 7, 2024, the Company entered into a subscription agreement with Cobra Alternative Capital Strategies, LLC.

As of December 31, 2024,

the Company has been loaned $3.1 million with net cash proceeds of $2.6 million.

October 29, 2024, the Company entered into the First Amendment to Amended and Restated Secured Promissory Note (the “Note

Amendment”) with Cobra Alternative Capital Strategies LLC (“Cobra”).

Pursuant to the Note Amendment, Cobra agreed to extend the Maturity Date of its senior promissory

note dated May 1, 2024, which is currently due.

The new Maturity Date will be October 29, 2025.

In consideration for the extension,

the Company (i) agreed to make such Notes convertible at the option of Cobra with a conversion price of $3.17 per share, (ii) agreed

to prepay Cobra’s debt with 50% of any money raised by the Company from warrant exercise proceeds and from capital raise

transactions, and (iii) issued Cobra an aggregate of 500,000 five year warrants with an exercise price of $3.04 per share which are

identical to the Exchange Warrants.

The Note Amendment was repaid out of the February 2025 Private Placement.

have completed several initiatives to optimize our working capital requirements.

We launched Groove, a new, innovative Greenlane Brands

product line, and we also rationalized our third-party brands product offering, which enables us

to reduce inventory carrying costs and working capital requirements.

product line, and we also rationalized our third-party brands product offering, which enables us to reduce inventory carrying costs and

working capital requirements.

April 2023, we entered into two strategic.

First, we entered into a strategic partnership (the “MJ Packaging Partnership”) with A&A Global Imports

d/b/a MarijuanaPackaging.com (“MJ Pack”), a provider of packaging solutions to the cannabis industry.

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.

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.

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

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

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.

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

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workforce by approximately 43% throughout fiscal year 2024 to reduce costs and align with our revenue projections.

We have incurred

net losses of $32.3 million and $182.2 million for the years ended December 31, 2023 and 2022, respectively.

For the year ended December

31, 2023, cash used in operating activities was $ 1.8

have incurred net losses of $17.7 million and $32.3 million for the years ended December 31, 2024 and 2023, respectively.

ended December 31, 2024, cash used in operating activities was $ 6.8

million and cash used in operating activities for the year ended December 31, 2023 was $1.8 million.

The recent macroeconomic

environment has caused weaker demand than contemplated under our 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:

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

profitability.

environment has caused weaker demand than contemplated under our business plan, resulting in a reduction in projected revenue for the twelve-month period included in the going concern evaluation.

We believe that our cash on hand that includes cash raised in the February 2025 Private Placement and the cash flow that we generate from

our operations will 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.

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.

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(in thousands)

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) financing activities

Cash Used in Operating Activities

During 2024, net cash used in operating activities of approximately $6.8

million was a result of a net loss of $17.7 million offset by non-cash adjustments to net loss of $6.4 million and a $4.4 million increase

in working capital driven by decreases in inventories of $6.3 million and decreases in other current assets of $3.5 million reduced by

an increase in accounts receivable of $2.8 million, decrease in accrued expenses of $0.8 million and a decrease in accounts payable of

$2.3 million.

2023, net cash used in operating activities of approximately $1.8 million was a result of a net loss of $32.3 million offset by non-cash

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in our accrued expenses and accounts payable, and decreases in inventories offset by higher other current assets.

2022, net cash used in operating activities of approximately $26.4 million was a result of a net loss of $182.2 million offset by non-cash

adjustments to net loss of $140.6 million, including an impairment charge related to goodwill and indefinite-lived intangibles of $71.4

million, and a $15.2 million increase in cash provided by working capital primarily driven by decreases in our accrued expenses and accounts

payable, and decreases in inventories offset by higher other current assets..

Cash Provided by Investing Activities

2023, net cash provided by investing activities of (i) approximately $0.1 million from $1.1 million of cash proceeds from the sale of

certain equity securities investments, offset by approximately $1.0 million of cash used for capital expenditures, including development

costs for our new enterprise resource planning system.

2022, net cash provided by investing activities of (i) approximately $12.0 million of cash proceeds from the sale of our assets held

for sale, (ii) approximately $4.6 million of cash proceeds from the disposition of our interests in VIBES, and (iii) approximately $0.6

million of cash proceeds from the sale of certain equity securities investments, offset by approximately $2.8 million of cash used for

capital expenditures, including development costs for our new enterprise resource planning system.

Cash (Used in) Provided by Financing Activities

2023, net cash used in financing activities primarily consisted of (i) approximately $3.9 million of cash proceeds from the issuance

of Class A common stock related to our July 2023 Offering, (ii) approximately $3.9 million of cash proceeds from our future receivables

financing, (iii) $2.1 million of cash proceeds from a secured bridge loan, offset by (iv) approximately $0.3 million of cash used for

contingent consideration payments, (v) and approximately $2.1 million of cash used for repayments related to the Eyce and DaVinci promissory

notes, and (vi) the $15.0 million payoff of asset based lending loans.

2022, net cash provided by financing activities primarily consisted of (i) approximately $21.1 million of cash proceeds from the issuance

of Class A common stock related to our ATM Program, the June 2022 Offering and the October 2022 Offering, (2) approximately $14.6 million

of cash proceeds from our Asset-Based Loan, offset by debt issuance costs of $1.5 million, and (iii) approximately $0.9 million of cash

used for contingent consideration payments, (iv) and approximately $19.4 million of cash used for repayments related to the Eyce and

DaVinci promissory notes, the payoff of the Real Estate Note, and repayment of our bridge loan.

Cash (Used In) Provided by Investing Activities

2024, net cash provided by investing activities of approximately $0.2 million consisted primarily of capital expenditures.

2023, net cash provided by investing activities of approximately $0.1 million from $1.1 million of cash proceeds from the sale of certain

equity securities investments, offset by approximately $1.0 million of cash used for capital expenditures, including development costs

for our new enterprise resource planning system.

Cash Provided by (Used in) Financing Activities

During 2024, net cash provided by financing activities of $7.4 million

primarily consisted of cash proceeds of approximately $3.0 million from the issuance of debt, $5.6 million from the issuance of Class

A common stock, and $1.8 million from the exercise of stock options and warrants, partially offset by approximately $3.2 million in payments

on notes payable, finance lease obligations and other long-term liabilities.

2023, net cash used in financing activities primarily consisted of approximately $3.9 million of cash proceeds from the issuance of Class

A common stock related to our July 2023 Offering, approximately $3.9 million of cash proceeds from our future receivables financing,

$2.1 million of cash proceeds from a secured bridge loan, offset by approximately $0.3 million of cash used for contingent consideration

payments, and approximately $2.1 million of cash used for repayments related to the Eyce and DaVinci promissory notes, and the $15.0

million payoff of asset based lending loans.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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-K

Item 7. Management’s Discussion and Analysis