What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-21 compared with 2024-07-19 · 867 added, 929 removed, 946 unchanged (65% of the section changed)

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to Consolidated Financial Statements

of Independent Registered Public Accounting Firm Marcum LLP PCAOB ID:

Balance Sheets

Statements of Operations and Comprehensive Loss

Statements of Stockholders’ Equity

Statements of Cash Flows

to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm PKF O’Connor Davies PCAOB ID:

Report of Independent Registered Public Accounting Firm Marcum LLP PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Stockholders and Board of Directors

Holdings, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheet of Greenlane Holdings, Inc.

(the “Company”) as of December 31, 2024,

and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year

ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as

of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting

principles generally accepted in the United States of America.

discussed in Note 2 to the financial statements, the Company changed the composition of its segment information in 2024.

audited the adjustments necessary to retrospectively apply the change in the 2023 segment information as provided in Note 12.

opinion, such adjustments are appropriate and have been properly applied.

We were not engaged to audit, review, or apply any procedures

to the Company’s 2023 financial statements other than with respect to the reclassifications and, accordingly, we do not express

an opinion or any other form of assurance on the 2023 financial statements as whole.

as discussed in Notes 2 and 12 to the financial statements, the Company adopted the provisions of Accounting Standard Update 2023-07

Segment Information in 2024 on a retrospective basis.

We have also audited the adjustments necessary to retrospectively

apply the change in the 2023 segment information as provided in Note 12.

In our opinion, such adjustments are appropriate and have been

properly applied.

We were not engaged to audit, review, or apply any procedures to the Company’s 2023 financial statements other

than with respect to the adjustment and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial

statements as whole.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements

that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are

material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole,

and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the

accounts or disclosures to which they relate.

described in Note 9 to the consolidated financial statements, during 2024, the Company issued shares of its Class A common stock and

related pre-funded and common stock warrants (“Warrants”).

As disclosed in Note 2 to the consolidated financial statements,

the Company classifies its Warrants as equity based on evaluation of terms in the Warrant agreements including, but not limited to, cash

settlement provisions and settlement in shares in accordance with Accounting Standards Codification (“ASC”) 815.

with the assistance of an independent valuation expert, estimates the fair value of the Warrants issued using Black Scholes models, which

take into consideration the volatilities of comparable public companies.

the determination of the warrants as equity classified financial instruments and the fair value of Warrants require management to make

significant estimates and assumptions regarding the relevant valuation calculations, performing audit procedures to evaluate the reasonableness

of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to

involve professionals in our firm having the expertise in the valuation of financial instruments.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

These procedures included:

(1) management’s assessment and the Company’s accounting analysis as to the classification

of equity instruments, (2) the identification of any derivatives included in the agreements.

the Company’s valuation calculation to gain an understanding of management’s

key assumptions in determining the fair value of the warrants and assessing the source information

underlying the valuation assumptions.

the assistance of our valuation specialists, evaluated the methodologies and assumptions

used to assess the Company’s fair value of warrants, including the selection of the

valuation methodology and other significant assumptions used by the Company.

independent shadow calculations to test the reasonableness of the fair values for warrants

concluded on by the Company’s specialist.

Such calculations assessed the mathematical

accuracy of the valuation model and assessed the source information underlying the valuation

assumptions used in the model to determine the fair value for the warrants at inception.

the appropriateness of the disclosures in the consolidated financial statements.

Concern Assessment

described in Note 1 to the consolidated financial statements, the Company has incurred net losses from operations for each

of the two years in the period ended December 31, 2024, and net cash used in operating activities was approximately $6.8 million

for the year ended December 31, 2024.

The Company determined these, and other factors which include the Company closing on

a definitive agreement to sell $25.0 million of shares of the Company’s Class A common stock and investor warrants in February

2025, did not raise substantial doubt as to the Company’s ability to continue as a going concern one year from the

issuance date of the consolidated financial statements.

In making this determination, management prepared a cash flow

projection through March 2026.

Management used significant assumptions in preparing the cash flow projection, which included

expected revenue and cash receipts, operating costs and other obligations.

principal considerations for our determination that the evaluation of management’s going concern assessment was a critical

audit matter are the significant judgment and subjectivity inherent in the Company’s future cash flow estimate and a high

degree of auditor judgment in evaluating management’s forecasts for at least the next twelve months.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

These procedures included:

the overall reasonableness of the Company's future cash flow projections, including

performing sensitivity analysis on the significant assumptions utilized by the Company and

comparison to historical trends and other information obtained during the audit

actual operating results to forecasted amounts to determine the overall reasonableness

of future operating cash flow projections.

the adequacy of the Company’s financial statement disclosures

PKF O’Connor Davies, LLP

York, New York

have served as the Company’s auditor since November 20, 2024.

of Independent Registered Public Accounting Firm

the Stockholders and Board of Directors of

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on the Financial Statements

have audited the accompanying consolidated balance sheets of Greenlane Holdings, Inc.

(the “Company”) as of December 31,

2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for

each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America .

have audited, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments

and the adoption of ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”)

discussed in Notes 2 and 12 to the accompanying consolidated balance sheet of Greenlane Holdings, Inc.

(the “Company”) as

of December 31, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows

for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”) (the

2023 financial statements before the effects of the adjustments discussed in Notes 2 and 12 to the financial statements are not presented

In our opinion, the financial statements, before the effects of the retrospective adjustments to the disclosures for a change

in the composition of reportable segments and adoption of ASU 2023-07 discussed in Notes 2 and 12 to the financial statements, present

fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and

its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States

were not engaged to audit, review, or apply any procedures to the retrospective adjustments to the disclosures for a change in the composition

of reportable segments and the adoption of ASU 2023-07 discussed in Notes 2 and 12 to the financial statements, and accordingly, we do

not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly

Those retrospective adjustments were audited by PKF O’Connor Davies.

Paragraph – Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

fully described in Note 1, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and

sustain its operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise

additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The consolidated

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

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securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

As part of our audit

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

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Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2021.

We believe that our audit provide

a reasonable basis for our opinion.

have served as the Company’s auditor since 2021 through November 20, 2024.

HOLDINGS, INC.

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Current assets

Restricted cash

Accounts receivable, net of allowance of $ 2,616 and $ 2,209 at December 31, 2024 and 2023, respectively

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Customer deposits

Current portion of notes payable

Notes payable

Current portion of operating leases

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Total current liabilities

Notes payable, less current portion and debt issuance costs, net

Operating leases, less current portion

Finance leases, less current portion

Other liabilities

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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, 3,726 shares issued and outstanding as of December

600,000 shares authorized, and 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, and 0 shares issued and outstanding as of December

30,000 shares authorized, and 0 shares issued and outstanding as of December 31, 2022 *

Class A common stock, $ 0.01

par value per share, 600,000

shares authorized, 2,267

shares issued and outstanding as of December 31, 2024;

shares authorized, and 339

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 December 31, 2024;

shares authorized, and 0

shares issued and outstanding as of December 31, 2023 *

Common stock, value

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Total liabilities and stockholders’ equity

* After giving effect

to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

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

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thousands, except per share amounts)

For the for the year ended

For the year ended

Cost of sales

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General and administrative

Goodwill and indefinite-lived intangibles impairment charge

Definite-lived intangibles impairment charge

Property and equipment impairment charge

Impairment of property, plant 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

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Net loss attributable to Greenlane Holdings, Inc.

$ ( 169,509 )

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

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Foreign currency translation adjustments

Unrealized gain (loss) on derivative instrument

Comprehensive loss

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Comprehensive loss attributable to Greenlane Holdings, Inc.

$ ( 169,778 )

* After giving effect

to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

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

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STATEMENTS OF STOCKHOLDERS’ EQUITY

Income (Loss)

Comprehensive

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Balance December 31, 2022

$ ( 225,114 )

Equity-based compensation

Issuance of Class A shares, net of costs - ATM Program

Issuance of Class A shares - contingent consideration

Issuance of Class A shares, net of costs - June 2022 Offering

Issuance of Class A shares, net of costs - October 2022 Offering

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

Issuance of Class A common stock and pre-funded warrants, net of costs

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

VIBES disposition / deconsolidation (Note 3)

Exchanges of noncontrolling interest for Class A common stock

Issuance of Class A shares (Note 9)

Other comprehensive income

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Equity-based compensation

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

Issuance of Class A shares (Note 9)

Issuance of Class A shares, net of costs

Issuance of Class A shares

Issuance of Class A warrants

Other comprehensive income

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$ ( 274,929 )

* After giving effect

to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity.

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

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Cash flows from operating activities:

Net loss (including amounts attributable to non-controlling interest)

$ ( 182,226 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

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Equity-based compensation expense

Goodwill and indefinite lived intangibles impairment charge

Definite-lived intangibles impairment charge

Property and equipment impairment charge

Change in fair value of contingent consideration

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

Change in provision for credit losses

Gain related to indemnification asset

Loss on disposal of fixed assets

Gain on disposal of held-for-sale assets

Gain related to VIBES disposition / deconsolidation (Note 3)

(Gain) loss on disposal of fixed assets

Loss on extinguishment of debt

Impairment of property and equipment

Unrealized loss on equity investments

Realized gain on interest rate swap contract

Amortization of deferred financing costs and debt discount

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

Decrease in accounts receivable

(Increase) decrease in accounts receivable

Decrease in inventories

Decrease in vendor deposits

Decrease (increase) in other current assets

Decrease in other assets

Decrease in accounts payable

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Decrease in customer deposits

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from VIBES disposition (Note 3)

Purchase of property and equipment, net

Proceeds from sale of assets held for sale

Proceeds from sale of equity investments

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of Class A common stock, net of issuance costs

Proceeds from (repayment of) Asset-Based Loan

Proceeds from exercise of stock options and warrants, net of costs

Repayment of Asset-Based Loan

Proceeds from Secured Bridge Loan, net of costs

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Payments on Eyce and DaVinci promissory notes

Payments on Real Estate Note

Repayment of Bridge Loan

Proceeds from termination of interest rate swap

Repayments of notes payable

Proceeds from notes payable

Purchase consideration paid for Eyce and DaVinci acquisition

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Non-cash investing activities and financing activities:

Issuance of Class A common stock, warrants, and stock options for business acquisitions

Non-cash purchases of property and equipment

Decrease in non-controlling interest as a result of exchanges for Class A common stock

Decrease in non-controlling interest as a result of VIBES disposition

Transfer from contingent consideration to notes payable

Transfer from accrued expenses to notes payable

Fair value of common stock warrants issued as a debt discount

Extinguishment of debt in connection with Synergy Asset purchase agreement

Issuance of Class A Warrants

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

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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 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 and Higher

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

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

cannabis dispensaries, smoke shops, multi-state operators (“MSOs”), specialty retailers, and retail consumers.

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”).

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Units held by us) on our consolidated financial statements.

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.

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.

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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.

June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the Secretary of State for the State of Delaware (“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,

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.

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, which became effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening of trading on the Nasdaq.

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

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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 other equity issuances.

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.

Based on our cash on

hand and working capital at December 31, 2024, we expect to have sufficient cash to fund planned operations through the second

quarter of 2026.

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

See Note 13 for

more information.

Program and Shelf Registration Statement

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.

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.

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

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

Due to 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 Form S-3.

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

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

See “Note 9 – Stockholders’ Equity” for further information.

On August 7, 2024, the Company issued a note

(the “Note”) in the principal amount of $ 3,237,269 to Cobra.

The Note is due the earlier of (i)February 5, 2025;

Company’s receipt of at least $ 3,500,000 of gross proceeds from an offering of their securities (a “Qualified Offering”)

and contain a 20 % original issue discount.

The Notes are convertible into common stock after maturity if not paid prior.

In connection

with the issuance of the Note, the Company issued the Investor warrants to purchase up to 1,618,635 shares at the Qualified Offering Price.

August 12, 2024, the Company entered into a securities purchase agreement with a single institutional investor for aggregate gross cash

proceeds of $ 6.5 million.

In connection with the private placement, the Company issued an aggregate of 2,363,637 units and pre-funded

The pre-funded units were 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 consisted 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 such date.

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 is 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

See Note 4 for more information.

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.

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.

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

Future Receivables

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.

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.

At December 31, 2024, no such financing remained outstanding.

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

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.

May 2024, the Company modified its debt agreement with Synergy to reduce the principal balance due by $ 2.7 million from $ 5.1 million

as part of the Loan Modification Agreement concurrent with the Asset Purchase Agreement.

Synergy acquired certain assets from the Company

in exchange for the reduction in overall principal owed.

During 2024 Cobra acquired the Secured Bridge Loan from the Secured Bridge Loan

Lender which was restructured as part of the Note Amendment on October 29, 2024.

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

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

As of December 31, 2024, the Company has been loaned $ 3.1 million with net cash proceeds of $ 2.6 million pursuant

to the Subscription Agreement.

The note was issued with a 20 % original issue discount and is due in full on December 7, 2024 .

6 - Long Term Debt” for more information.

We have completed several initiatives to optimize our working capital

requirements.

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.

In 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 industry.

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

During the year ended December 31, 2024, the Company repaid the amount in full.

On August 7, 2024, the Company issued a note (the “Note”) in the principal amount of $ 3,237,269 to Cobra.

The Note is due

the earlier of (i)February 5, 2025;

or (ii) the Company’s receipt of at least $ 3,500,000 of gross proceeds from an offering of their

securities (a “Qualified Offering”) and contain a 20 % original issue discount.

The Notes are convertible into common stock

after maturity if not paid prior.

In connection with the issuance of the Note, the Company issued the Investor warrants to purchase up

to 1,618,635 shares at the Qualified Offering Price.

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

Pursuant to the Note Amendment, Cobra agreed to extend the Maturity Date of its Secured Bridge Loan and the Subscription

Agreement (together the “Notes”).

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

This loan was repaid in full as part 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.

April 2023, we entered into two strategic partnerships.

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

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

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.

We have made 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 $ 32.3

million and $ 182.2

million for the years ended December 31, 2023 and 2022, respectively.

For the years ended December 31, 2023 and 2022, cash used in

operating activities were $ 1.8

million and $ 26.4

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

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

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 partner.

While the strategic partnership may result in a decrease in

top line revenue for these packaging and vape products, this partnership 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 many of our vendor and supplier partnership terms and are continuing to improve working capital arrangements

with our vendors and suppliers.

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

We have reduced our workforce significantly to reduce costs and align with our revenue projections.

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

years ended December 31, 2024 and 2023, cash used in operating activities were $ 6.7 million and $ 1.8 million, respectively.

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.

We believe that our cash on hand 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.

Moving forward, 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.

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

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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

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.

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

the collectability of accounts receivable;

the allowance f or

slow-moving or obsolete inventory;

allowance for slow-moving or obsolete inventory;

the realizability of deferred tax assets;

the fair value of contingent consideration arrangements;

the fair value of contingent

consideration arrangements;

the useful lives property and equipment;

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

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.

results could differ materially from those estimates.

the calculation of our VAT taxes receivable and VAT taxes,

fines, and penalties payable;

our loss contingencies, including our TRA liability;

and the valuation and assumptions underlying

equity-based compensation and warrants.

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 December 31, 2023, we had two reportable

operating business segments:

Industrial Goods and Consumer Goods.

Our reportable segments have been identified based on how our chief

As of December 31, 2024, we determined

that we have one reportable operating business segment.

Our reportable segment has 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 evaluates operating decisions,

and evaluate operating performance.

See “Note 12—Segment Reporting.”

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

evaluates operating performance.

business combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations

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to the difference between the stated interest rate and market rate of interest at each balance sheet date.

On a recurring basis, we measure and record contingent consideration

using fair value measurements in the accompanying consolidated financial statements.

See “Note 4—Fair Value of Financial

Instruments.”

On a recurring basis, we measure

and record contingent consideration using fair value measurements in the accompanying consolidated financial statements.

4—Fair Value of Financial Instruments.”

also own equity securities of private entities, which do not have readily determinable fair values.

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we had no cash equivalents.

cash represents principally cash reserves that are maintained pursuant to the governing agreement of the Asset-Based Loan discussed in

“Note 6 - Debt.”

Receivable, net

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finance leases, see “Note 5—Leases.” We pledge property and equipment as collateral for our long-term debt, see “Note

6—Long Term Debt.”

of Long-Lived Assets

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assets, such as customer relationships, and may give rise to impairment losses in future periods.

Modifications and Extinguishments

the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (TDR)

under ASC Topic 470-60, which requires debt modifications to be evaluated if (1) the borrower is experiencing financial difficulty, and

(2) the lender grants the borrower a concession.

If a TDR is determined not to have occurred, the Company evaluates the modification

in accordance with ASC Topic 470-50-40, which requires modification to debt instruments to be evaluated to assess whether the modifications

are considered “substantial modifications”.

A substantial modification of terms is accounted for as an extinguishment.

there is a conversion feature within the debt instrument, the Company evaluates whether the conversion feature should be bifurcated under

ASC 815 as a derivative.

If the Company believes the embedded conversion feature has no fair value on the date of issuance (measurement

date) and the embedded conversion feature has no beneficial conversion feature, the embedded conversion feature does not meet the criteria

in ASC 470-50-40-10 or 470-20-25 and the issuance of the convertible debt is considered a modification, and not an extinguishment that

would require the recognition of a gain or loss.

If the Company determines the change in fair value of the derivative meets the criteria

for substantial modification under ASC 470 it will treat the modification as extinguishment and recognize a loss from debt extinguishment.

in Equity Securities

investments 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.

Investments in equity securities are included within “Other assets” in our consolidated balance sheets.

See “Note 4—Fair Value of Financial Instruments.”

Incentives and Rebates

incentives we receive in the form of payments from vendors solely to reimburse us for acting as the vendors’ agent in redeeming

a sales incentive that is between our vendor and our customers and end consumers are included in net sales in the consolidated statements

of operations and comprehensive loss.

also have agreements with certain vendors to receive volume rebates which are dependent upon reaching minimum purchase thresholds.

volume rebates can be reasonably estimated and it is probable that minimum purchase thresholds will be met, we record a portion of the

rebate when or as we make progress towards the purchase threshold.

Amounts received from vendors relating to volume rebates are considered

a reduction of the carrying value of our inventory and, therefore, such amounts are ultimately recorded as a reduction of cost of goods

sold in the consolidated statements of operations and comprehensive loss.

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

determined that our ownership interest does not provide us with significant influence over the operations of this investments.

Accordingly, we account for our investment in this entity as equity securities.

Airgraft Inc.

is a private entity and their equity

securities do not have a readily determinable fair value.

We elected to measure these equity 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.

Investments in equity securities are included within

“Other assets” in our consolidated balance sheets.

See “Note 4—Fair Value of Financial

Instruments.”

Currency Translation

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of December 31, 2024 and 2023, we hold all the outstanding Common Units in the Operating Company and are the sole member.

result, starting in 2023, 100% of the Operating Company’s US and state income and expenses will be 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

result in taxable or deductible amounts in the future.

We compute deferred balances based on enacted tax laws and applicable rates for

the periods in which the differences are expected to affect taxable income.

A valuation allowance is recognized for deferred tax assets

if it is more likely than not that some portion or all of the net deferred tax assets will not be realized.

In making such a determination,

we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected

future taxable income, tax-planning strategies, and results of recent

If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would

starting in 2023, 100% of the Operating Company’s US and state income and expenses will be 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 result in taxable or deductible amounts in the future.

We compute deferred balances based on enacted tax laws and applicable

rates for the periods in which the differences are expected to affect taxable income.

A valuation allowance is recognized for

deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized.

making such a determination, we consider all available positive and negative evidence, including future reversals of existing

taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would

adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes.

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See “Note 11—Income Taxes.”

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 obligation.

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.

from the sale of our merchandise are recognized at a point in time when control of merchandise is transferred to the customer.

is measured based on the amount of consideration expected to be received in exchange for those goods or services, reduced by promotional

discounts and estimates for return allowances and refunds.

Taxes collected from customers for remittance to governmental authorities

are excluded from net sales.

is generated primarily from the sale of finished products to customers, whereby each product unit represents a single performance obligation.

Revenue is recognized 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

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 %

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.

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

during the years ended December 31, 2023 and 2022.

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 $ 0.3 million as of December 31, 2023 and 2022, respectively.

Product warranty is provided by the manufacturers.

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 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 years ended December 31, 2024 and 2023.

returns are estimated based on historical experience and recorded as a refund liability that reduces the net sales for the period.

historical returns, current economic trends and changes in order volume are analyzed when evaluating the adequacy of sales returns allowances

in any reporting period.

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

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

were no liabilities related to refunds as of December 31, 2024.

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

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statements of operations and comprehensive loss.

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.

The Company recognizes this

fee on a periodic basis when the products have been shipped for the end consumer.

Company transitioned to a commission revenue model for the majority of the sales of industrial vaporizers and packaging products.

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

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

customer represented approximately 21 %

of our net sales for the years

ended December 31, 2023 and 2022, respectively .

As of December 31, 2023 the Company has a concentration of credit risk with its accounts receivable balance as one customer represented

approximately 11 %

of accounts receivable .

As of December 31, 2022, the Company had three customers who individually represented approximately 31 % ,

customers represented approximately 32 %

our net sales for the year ended December 31, 2024.

One customer represented approximately 21 % of our net sales for the year ended

December 31, 2023 .

As of December 31, 2024 the Company had no customers make up more than 5 %

of its accounts receivable balance.

As of December 31, 2023 the Company has a concentration of credit risk with its accounts

receivable balance as one customer represented approximately 11 %

of accounts receivable.

respectively.

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

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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.

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

million and $ 0.4 million relating to this matter within “Accrued expenses and other current liabilities” in our consolidated

balance sheet as of December 31, 2023 and 2022, respectively.

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

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

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 year ended December 31, 2022, we recognized

a gain of approximately $ 2.0 million, respectively, within “general and administrative expenses” in our 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.

specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by the Company 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

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See “Note 9—Stockholders’ Equity - Net Loss Per Share.”

Issued Accounting Guidance

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 consolidated financial statements.

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

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 consolidated financial statements, as we did not complete any transactions

to which this standard was applicable during the current reporting period.

Issued Accounting Guidance Not Yet Adopted

Adopted Accounting Guidance

June 2022, the FASB issued ASU No.

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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) :

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:

(or loss) from continuing operations before income tax expense (or benefit) disaggregated

between domestic and foreign.

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.

Adoption of this standard did not have a material impact on our

consolidated financial statements.

November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting – Improvements to Reportable Segment

Disclosures (“ASU 2023-07”).

We adopted Accounting Standards Update No.

2023-07, which enhances disclosures required for operating segments.

2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly

provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description

of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

All disclosure

requirements of ASU 2023-07 are required for entities with a single reportable segment.

Refer to Note 12 in the Notes to the Consolidated

Financial Statements.

Issued Accounting Guidance Not Yet Adopted

December 2023, the FASB issued Accounting Standards Update 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”

(“ASU 2023-09”) , amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income

taxes paid and the effective tax rate reconciliation.

ASU 2023-09 is effective for annual reporting periods beginning after December

15, 2024, with early adoption permitted and can be applied on either a prospective or retrospective basis.

We are currently evaluating

the effect of adopting ASU 2023-09 on our income tax disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,

(Subtopic 220-40) (“ASU 2024-03”).

ASU 2024-03 improves disclosures regarding the types of expenses included in commonly

presented expense captions, including disaggregating the amounts of employee compensation, depreciation and amortization included within

each income statement expense caption.

This standard is effective for fiscal years beginning after December 15, 2026, and interim periods

within fiscal years beginning after December 15, 2027.

The Company is currently evaluating the impact of the standard on its consolidated

financial statements and disclosures.

BUSINESS ACQUISITIONS AND DISPOSITIONS

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 71,721 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.

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

Specifically, we recorded a gain

of approximately $ 0.3 million, respectively, within “other income (expense), net” in our consolidated statement of operations

and comprehensive income for the year ended December 31, 2022 to write-off the balance of the Eyce 2022 Contingent Payment.

recorded approximately $ 1.3 million in compensation expense related to the Amended 2022 Contingent Payment within “salaries, benefits

and payroll taxes” in our consolidated statement of operations and comprehensive income for the year ended December 31, 2022.

April 2, 2023 and July 1, 2023 payments were paid timely, the remaining payments which were not paid timely have rolled into the Synergy

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

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 year ended December 31, 2022, which is included as

an offset in “general and administrative expenses” in our consolidated statements of operations and comprehensive loss, as

well as a reduction to non-controlling interest on our consolidated balance sheet as of December 31, 2022 of $ 1.8 million.

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

Subsidiary Purchase Agreement

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 December 31, 2024, the close of the transaction is in dispute as there was pending consideration

obligations due to be transferred to the Company not met, as well as other monetary obligations of the purchasers that remain

As a result the Company did not record a sale of the business under ASC 805.

Business Combinations .

intends to vigorously pursue its claims against Shavita and the purchaser group.

As of December 31, 2024, the Company continues to run the operations.

ARI Logistics, B.V.

and Shavita B.V.

represented 16.7 % of the Company’s

total net sales in 2024.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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

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:

Balance Sheet

Fair Value at December 31, 2023

(in thousands)

Contingent consideration - current

Accrued expenses and other current liabilities

Total Liabilities

Balance Sheet

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December 31, 2024 and 2023.

Instrument and Hedging Activity

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

” 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.

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

During the year ended December

31, 2022, we recorded a gain of approximately $ 0.1 million based on the change in fair value of the interest rate swap contract within

expense ” in our consolidated statement of income and comprehensive loss.

second quarter of 2022, we also reclassified the related accumulated other comprehensive income balance of $ 0.3 million to “interest

expense” in our 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 year ended December 31, 2022, respectively.

unrealized loss on the derivative instrument prior to the discontinuation of hedge accounting was included within “ Other

comprehensive income (loss) ” in our consolidated statement of operations and comprehensive

There was no measure of hedge ineffectiveness and no reclassifications from other comprehensive loss into interest expense for

the year ended December 31, 2022, respectively.

In August 2022, we terminated the interest swap contract.

Consideration

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The estimate of

the fair value of contingent consideration is determined by applying a risk-neutral framework using a Monte Carlo Simulation, which includes

inputs not observable in the market, such as the risk-free rate, risk-adjusted discount rate, the volatility of the underlying financial

metrics and projected financial forecast of the acquired business over the earn-out period, and therefore represents a Level 3 measurement.

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 consolidated statements of operations and comprehensive loss.

the fair value of 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 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

4 unchanged sentences

Balance, December 31, 2022

Eyce 2021 Contingent Payment settlement in Class A common stock

Eyce 2021 Contingent Payment settlement in cash

DaVinci 2021 Contingent Payment settlement in Class A common stock

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

Loss from fair value adjustments included in results of operations

Balance, December 31, 2022

Cash payments for earn contingent consideration

2 unchanged sentences

Balance, December 31, 2023

Gain from fair value adjustments included in results of operations

Balance, December 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 VIVA.

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 security 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 years ended December 31, 2023 and 2022.

investment in equity securities without readily determinable fair value consists of ownership interest in Airgraft Inc.

We determined

that our ownership interests do not provide the Company with significant influence over the operations of this investment.

we account for our investment in this entity as equity securities.

is a private entity and their equity securities do not have a readily determinable fair value.

We elected to measure these

equity 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 did not identify any

fair value adjustments related to these equity securities during the years ended December 31, 2024 and 2023.

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

approximately $ 1.9 million, included within “Other assets” in our 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.

of December 31, 2023, we had facilities financed under operating leases consisting of warehouses, offices, and a retail store, with lease

term expirations between 2023 and 2027.

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

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

the year ended December 31, 2022, we took steps to reduce our operational footprint and we continue to optimize our distribution network,

transitioning to a more streamlined network with fewer, centrally-located, highly automated facilities.

We successfully transferred,

subleased or terminated our office leases for our Cypress, CA, Hermosa Beach, CA, France and China locations.

We also successfully transferred,

subleased or terminated our retail leases for our Amsterdam, Netherlands, Barcelona, Spain, and Malibu, California locations.

November 3, 2022, we entered into that certain Lease Termination Agreement, dated as of October 31, 2022 solely for reference purposes

(the “Lease Termination Agreement”), by and between us and Warland Investments Company (the “Landlord”), which

provided for the termination of our lease at 6261 Katella Avenue in Cypress, California (collectively, the “Lease Termination”).

Pursuant to the terms of the Lease Termination Agreement, we agreed to pay a fee of approximately $ 0.5 million as an early termination

fee in consideration for the Landlord agreeing to terminate all of our remaining obligations under the Cypress lease.

of December 31, 2024, we had facilities financed under operating leases consisting of a warehouses and offices, with lease term expirations

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 consolidated

28 unchanged sentences

(in thousands)

Asset-Based Loan

DaVinci Promissory Note

Eyce Promissory Note

Future Receivables Financing

Secured Bridge Loan

Long-term debt, gross

Secured Bridge Loan 2

Secured Bridge Loan 3

Total long term debt

2 unchanged sentences

Debt, net, excluding operating and finance leases and liabilities

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.

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

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.

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.

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.

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 December

31, 2023 or 2022.

August 9, 2022, we entered into an asset-based loan pursuant to that certain Loan and Security Agreement (the “Asset-Based Loan

Agreement”), dated as of August 8, 2022, 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”).

to the Asset-Based 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 consolidated balance sheet, and

which released the funds when permitted by the borrowing base certificate.

Subject to certain exceptions described in the Asset-Based

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”).

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.

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.

February 9, 2023, we entered into Amendment No.

2 to the Asset-Based 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 Asset-Based Loan Agreement and the lenders under the Asset-Based Loan Agreement agreed to release $ 5.7 million in funds held in a

blocked account pursuant to the terms of the Asset-Based Loan Agreement.

Amendment No.2 to the Asset-Based Loan Agreement also provided

that we would make additional prepayments upon the occurrence of certain specified asset sales by the Company.

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 Asset-Based Loan Agreement.

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

its obligations under the Asset-Based Loan Agreement, in accordance with the terms of the Asset-Based Loan Agreement.

Promissory Note

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 % were due quarterly through October 2023.

Promissory Note

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

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

As of December 31, 2023, the

Eyce Promissory Note was repaid in full, and there was no remaining balance on our condensed consolidated balance sheet.

Receivables Financings

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.

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 .

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.

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

the “Future Receivables Financings”).

During the year ended December 31, 2024, the Company’s financings were in a series

of transactions refinanced as they were not able to make the proscribed monthly payments for the repayment of cash advances.

the refinancings and the payment schedule was restructured and the total balance increased to $ 4.6 million which included deferred financing

fees of approximately $ 2.8 million.

the year ended December 31, 2024, the Future Receivables Financings were purchased by the Senior Subordinated Lender and paid down to

$ 0 during the October 29, 2024 restructuring.

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 is 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

Company evaluated the Exchange Agreement under ASC 470-50, Debt – Modifications and Extinguishment.

As a result, the Company determined

that the Exchange Agreement should be accounted for as an extinguishment and the Company recorded the Exchange Agreement debt instrument

at fair value which included the consideration in common stock warrants transferred.

The resulting loss on extinguishment of $ 2.0 million

is included in loss on extinguishment of debt in the accompanying consolidated statement of operations for the year ended December 31,

noted above, the Company issued 1,261,830 common stock warrants which were deemed to classified as equity as the warrants were exercisable

for a fixed price of $ 3.04 and for a fixed number of shares with no potential for cash redemption.

The Company determines the value of

the warrants using an appropriate valuation method, including a Black-Scholes.

As part of the debt extinguishment the 1,261,830 Exchange

Warrants were valued at $ 2.6 million using the Black-Scholes model.

June 7, 2024, the Company entered into a subscription agreement for a note payable with Cobra Alternative Capital Strategies, LLC (“Cobra”).

On August 7, 2024, the

Company issued a note (the “Note”) in the principal amount of $ 3,237,269 to Cobra.

The Note is due the earlier of (i)February

or (ii) the Company’s receipt of at least $ 3,500,000 of gross proceeds from an offering of their securities (a “Qualified

Offering”) and contain a 20 % original issue discount.

The Notes are convertible into common stock after maturity if not paid prior.

In connection with the issuance of the Note, the Company issued the Investor warrants to purchase up to 1,618,635 shares at the Qualified

Offering Price .

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

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 .

consideration for the extinguishment of the Secured Bridge Loan, Cobra paid off the $ 2.7 million balance owed to Synergy as part of

the Secured Bridge Loan.

In exchange for paying off the Secured Bridge Loan, the Company (i) agreed to make the Cobra 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 Exchange common stock warrants which were deemed to classified as equity as the warrants were exercisable for a fixed price of $ 3.04

and for a fixed number of shares with no potential for cash redemption.

The Company determines the value of the warrants using an appropriate

valuation method, including a Black-Scholes.

As part of the debt extinguishment the 500,000 Exchange Warrants were valued at $ 1.0 million

using the Black-Scholes model.

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”).

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

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

8 unchanged sentences

2023 Loan Agreement.

May 6, 2024, the Company, Warehouse Goods and 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 Company evaluated the extinguishment of the Secured Bridge Loan

under ASC 470-50, Debt – Modifications and Extinguishment.

As a result, the Company determined that the Secured Bridge Loan

should be accounted for as an extinguishment and the Company recorded the resulting gain on extinguishment of $ 2.1 million in the

accompanying consolidated statement of operations for the year ended December 31, 2024 As part of the overall modification, the

principal balance with Synergy decreased to $ 2.7 million

from $ 5.1 million.

Synergy acquired certain assets from the Company in exchange for the reduction in overall principal owed and as part of the

transaction, the Company recognized a gain on the debt modification of $ 2.2 million.

This amount is included in the accompanying financial statements within the statement of operations for year ended December 31, 2024

within other income (expense).

The Secured Bridge Loan balance of $ 2.7 million was paid in full by Cobra as part of the October 29, 2024 First Amendment

to Amended and Restated Secured Promissory Note.

The First Amendment to Amended and Restated Secured Promissory Note was repaid in full

in February 2025 with proceeds from the Private Placement.

Company evaluated the extinguishment of the Secured Bridge Loan under ASC 470-50, Debt – Modifications and Extinguishment.

result, the Company determined that the Secured Bridge Loan should be accounted for as an extinguishment and the Company recorded the

Cobra debt instrument at fair value which included the consideration in common stock warrants transferred.

The resulting loss on extinguishment

recorded of $ 1.0 million is included in loss on extinguishment of debt in the accompanying consolidated statement of operations for the

year ended December 31, 2024.

noted above, the company issued 500,000 common stock warrants which were deemed to classified as equity as the warrants were exercisable

for a fixed price of $ 3.04 and for a fixed number of shares with no potential for cash redemption.

The Company determines the value of

the warrants using an appropriate valuation method, including a Black-Scholes.

As part of the debt extinguishment the 500,000 Exchange

Warrants were valued at $ 1.0 million using the Black-Scholes model.

Minimum Principal Payments

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(in thousands)

Year Ending December 31,

(in thousands)

Asset-Based Loan

DaVinci Promissory Note

Eyce Promissory Note

Future Receivables Financing

Secured Bridge Loan

Bridge Loan 2

Bridge Loan 3

COMMITMENTS AND CONTINGENCIES

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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 year ended December 31, 2023.

November 13, 2024, Pryor Cashman made a demand for arbitration for unpaid legal invoices in the amount of $ 320,511.48 .

The Company intends

to dispute these claims in arbitration as it contends the services were not authorized or rendered and expects the case to be resolved

at a significant discount (Arbitration, S.D.

February 11, 2025, Earth’s Healing, Inc.

25-Cv-1428 (N.D.

Cal.)) brought a purchaser class action antitrust action against

Distributors of Ccell products, including Greenlane Holdings.

The Company believes the case is baseless and without merit,

and the Company is jointly defending the case with the other named defendants.

December 17, 2024, Crossmark, Inc.

brought a breach of contract suit against our subsidiary, Warehouse Goods, LLC, in the amount of $ 297,181.90 .

The Company intends to defend this breach of contract suit vigorously (Case No.

502024CA011856XXXAM B AI).

February 25, 2025, the Company received a Civil Investigation Demand regarding an investigation to determine whether there is or has

been a violation of 31 U.S.C.

372 the False Claims Act concerning allegations of false claims submitted to federal programs for approval,

payment, and subsequent forgiveness of a Kim International LLC (a subsidiary of Kushco which the Company acquired in 2021) 2020 Federal

Payment Protection Program (“PPP) loan of approximately $ 1.9 million dollars.

At this stage, it is only a request for information

which the Company has provided.

The False Claims Act allows for the DOJ to recoup any PPP loans as well as potential treble damages for

any violation.

At this time, the Company can not assess the likely outcome of the investigation.

December 16, 2024, S.K et al brought a consumer class action antitrust action against four U.S.

distributions of Ccell products, including

Greenlane Holdings, Inc., alleging antitrust violations.

The Company believes the case is baseless and without merit and is currently

jointly defending these claims with the other named defendants in the case.

November 15, 2024, Vaporous Technologies, Inc.

brought a suit for liquidated damages in the amount of $ 664,289.43 under the September

2020 Manufacturing Agreement by Vaporous against Warehouse Goods.

The Company believes they have strong defenses against this suit.

Contingencies

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SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

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.

and Equipment, net

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OF PROPERTY PLANT AND EQUIPMENT LESS DEPRECIATION AND AMORTIZATION

(in thousands)

Estimated useful life

As of December 31,

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expense for property and equipment for the years ended December 31, 2024 and 2023 was approximately $ 0.8 million and $ 2.2 million, respectively.

intangible assets consisted of the following at the dates indicated below:

OF IDENTIFIED INTANGIBLE ASSETS

As of December 31, 2022

Gross carrying amount

Accumulated amortization

Impairment Charge

Carrying value

Estimated useful life

(in thousands)

Design libraries

Trademarks and tradenames

Customer relationships

Other intangibles

Total finite-lived intangibles

Total indefinite-lived intangibles

evaluated goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year and at interim

dates if indicators of impairment exist.

Due to declines in the Company’s stock price as well as changes to our estimates and assumptions

of the expected future cash flows, management concluded that a triggering event occurred in the third quarter of 2022, based upon which

we recorded an impairment charge related to our indefinite-lived intangible assets of $ 24.9 million.

During the fourth quarter of 2022,

we further concluded that the remaining $ 4.6 million balance of indefinite-lived intangibles was impaired.

Based upon these assessments,

we recorded a total impairment charge related to indefinite-lived intangibles of $ 29.5 million for the year ended December 31, 2022.

We also recorded an impairment charge related to our goodwill balance, as described further below.

did not acquire any additional intangible assets during the years ended December 31, 2023 and 2022.

expense for intangible assets was approximately $ 0 million and $ 4.4 million for the years ended December 31, 2023 and 2022, respectively.

of December 31, 2024 and 2023, all indefinite-lived intangibles were written off.

We did not acquire any additional intangible assets

during the years ended December 31, 2024 and 2023.

There was no amortization expense for intangible assets for the years ended December

31, 2024 and 2023, respectively.

evaluated goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year and at interim

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Goodwill was assessed for impairment at the reporting unit level.

Due to declines in the Company’s

stock price as well as changes to our estimates and assumptions of the expected future cash flows of our Consumer Goods and Industrial

Goods reporting units, management concluded that a triggering event occurred in the third quarter of 2022, requiring a quantitative impairment

test of our goodwill for both of our reporting units.

Based on this assessment, we concluded that the fair value of each of our two reporting

units was below their respective carrying value, and goodwill was fully impaired for both reporting units during the year ended December

There were no goodwill impairments

during the years ended December 31, 2024 and 2023.

Current Assets

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Other current assets:

Employee retention credit (ERC) receivable

VAT refund receivable (Note 2)

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Accrued employee compensation

Amended Eyce APA

Accrued expenses

Refund liability (including accounts receivable credit balances)

Accrued construction in progress (ERP)

Sales tax payable

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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

year ended December 31, 2023 and 2022, respectively, were as follows:

certain customized product offerings, we may receive a deposit from the customer (generally 25 %

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

Changes in our customer deposits liability balance during the year ended December 31, 2024 and 2023, respectively, were as

OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

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Increases due to deposits received, net of other adjustments

Customer Overpayments

Revenue recognized

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(in thousands)

Foreign Currency Translation

Unrealized Gain or (Loss) on Derivative Instrument

Unrealized Gain

Balance at December 31, 2022

Other comprehensive income (loss)

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

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

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Party Transactions

Persofsky, a Greenlane Director, is also a Principal Owner of Green Gruff USA Inc, (“Green Gruff”).

As of December 31, 2024,

there have been no transactions between the Company and Green Gruff.

Kovacevich, our former Chief Corporate Development Officer owns capital stock of Blum Holdings Inc.

(“Blum”) and serves

on the Blum board of directors.

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 December 31, 2023 and 2022, 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.

(“Blum”) and serves on

the Blum board of directors.

Total accounts receivable due from Blum were approximately $ 0.4 million as of December 31, 2024 and 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.

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.

Schoenfeld, co-founder and a former director of the Company, has a significant ownership interest in one of our customers, Universal

Net sales to Universal Growing were approximately less than $ 0.1 million for the year ended December 31, 2022.

Total gross accounts

receivable due from Universal Growing as of December 31, 2023 and 2022 were de minimis.

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, with respect to the $ 8.0 million Bridge Loan.

On June 30, 2022, we entered into the First Amendment

to the Secured Promissory Note, which provided for the extension of the maturity date of the Secured Promissory Note from June 30, 2022

to July 14, 2022.

On July 19, 2022, we fully repaid the Bridge Loan and as a result, all obligations under the Bridge Loan have been

July 19, 2022, Warehouse Goods entered into a Membership Interest Purchase Agreement and supporting documents (collectively, the “Sale

Agreement”) with Portofino Partners LLC (“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.

Portofino is an entity partially controlled by Adam Schoenfeld.

The Sale Agreement was approved

by the affirmative vote of a majority of the disinterested members of the Board and the audit committee of the Board in accordance with

the Company’s related party transactions policy.

In addition, $ 2.4 million was transferred to Portofino.

Persofsky, a director of the Company, is a member of the board of directors of Tilray Brands, Inc.

to Tilray totaled approximately $ 2.2 million, for the year ended December 31, 2022, respectively.

STOCKHOLDERS’ EQUITY

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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-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”), 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

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

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.

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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

In August 2021, we 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, through Cowen and Company, LLC (“Cowen”), as the sales agent.

Sales of our Class A common stock under the ATM Program

were 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.

Shares of our Class A common stock were issued pursuant

to our shelf registration statement on Form S-3 (File No.

333-257654), and a prospectus supplement relating to the Class A common stock

that was filed with the Securities and Exchange Commission on April 18, 2022.

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

(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.

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, 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

December 31, 2023

Class A shares sold *

Gross proceeds

Fees paid to sales agent

* After giving effect to the

Reverse Stock Splits.

Stock and Warrant Offerings

2023 Offering

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 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 was exercisable

immediately with no expiration date for one share of Class A common stock at an exercise price of $ 0.002 .

The June 2022 Offering generated

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

June 2022 Pre-Funded Warrants were exercised in July 2022, based upon which we issued an additional 495,000 shares of our Class A common

stock, for de minimis net proceeds.

2022 Offering

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.

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.

2023 Offering

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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proceeds of approximately $ 4.3 million and net proceeds to the Company of approximately $ 3.9 million.

of the date of this Annual Report on Form 10-K, all

July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an additional 1,911,000

shares of our Class A common stock subsequent to year end, for de minimis net proceeds.

of the date of this Annual Report on Form 10-K, all July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an

additional 1,911,000 shares of our Class A common stock subsequent to year end, for de minimis net proceeds.

connection with the July 2023 Offering, the Company entered into privately negotiated agreements with holders participating in the offering

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All other terms of the Prior Warrants remained unchanged.

2024 Private Placement

August 12, 2024, the Company entered into a securities purchase agreement with a single institutional investor pursuant to which we agreed

to issue and sell an aggregate of 58,000 shares of our Class A common stock, pre-funded warrants to purchase up to 2,305,637 shares of

our Class A common stock (the “August 2024 Pre-Funded Warrants”) and warrants to purchase up to 4,727,274 shares of our Class

A common stock (the “August 2024 Standard Warrants”).

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 such date.

2024 Private Placement

October 29, 2024, the Company entered into an Exchange Agreement with its Senior Subordinated Lender and with Cobra.

In connection

with the Exchange, the Company issued an aggregate of 1,761,830 five

year warrants with an exercise price of $ 3.04 per

share (the “Exchange Warrants”).

The Exchange Warrants which were deemed to

classified as equity as the warrants were exercisable for a fixed price of $ 3.04 and for a fixed number of shares with no potential for

cash redemption.

The Company determines the value of the warrants using an appropriate valuation method, including a Black-Scholes.

part of the debt extinguishments the 1,761,830 Exchange Warrants were valued at $ 3.7 million using the Black-Scholes model.

activity for the years ending December 31, 2024 and 2023 is as follows:

Weighted Average

Exercise Price

Balance, December 31, 2022

Balance, December 31, 2023

Expired or rescinded

( 1,424,384 )

Balance, December 31, 2024

of December 31, 2024, outstanding warrants have a weighted average remaining life of 3.32 years.

Value of Warrants issued:

following ranges of assumptions were used in calculations of the Black-Scholes option pricing models for warrants issued in the years

ended December 31, 2024 and December 31, 2023:

Schedule of Black-Scholes Option Pricing Models for Warrants Issued

Risk-free interest rate

Expected term (in years)

Expected share price volatility

Expected dividend yield

Loss Per Share

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stock is as follows (in thousands, except per share amounts):

OF EARNINGS PER SHARE BASIC AND DILUTED

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

thousands, except per share data)

For the year ended December 31,

(in thousands, except per share data)

$ ( 182,226 )

Net loss attributable to non-controlling interests

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Net loss attributable to Class A common stockholders

$ ( 169,509 )

Weighted average shares of Class A common stock outstanding *

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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 year ended December 31, 2023, beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive

stock for the years ended December 31, 2024 and 2023, beginning with their issuance date, as their stated exercise price of $ 0.001

was non-substantive and their exercise was virtually assured.

2024 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class A commons stock

for the year ended December 31, 2024, beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive

and their exercise was virtually assured.

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for the years ended December 31, 2024 and 2023, 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 as of December 31, 2023 and 2022.

for Class A common stock, and we owned.

The following table sets forth the outstanding potentially dilutive securities

that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive (in common stock

equivalent shares):

of Outstanding Potentially Dilutive Securities

December 31, 2023

Stock options to purchase common stock

Warrants to purchase common stock

Antidilutive Securities, value

COMPENSATION PLANS

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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 as of December 31, 2023.

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 10,000 shares.

Second Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards.

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under the Second Amended 2019 Plan by 19,078 shares to an aggregate of 29,078 shares.

As of the date of this Annual Report on Form

10-K, we have not filed a Registration Statement on Form S-8 with the Securities and Exchange Commission to register the additional shares

As of the date of this Annual Report on Form 10-K,

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.

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We recognized equity-based compensation expense as follows:

OF EQUITY BASED COMPENSATION EXPENSE

SCHEDULE OF EQUITY BASED COMPENSATION EXPENSE

(in thousands)

For the year ended December 31,

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Restricted shares - Class A common stock

Restricted stock units (RSUs) - Class A common stock

Total equity-based compensation expense

the year ended December 31, 2022, we granted an aggregate of 129,106 options to our directors and certain employees.

The stock options

were granted with exercise prices ranging from $ 2.52 per share to $ 20.00 per share, and vesting periods ranging from three months to

There were no options granted during the year ended December 31, 2023.

remaining unrecognized compensation expense as of December 31, 2023 was as follows:

OF EQUITY BASED UNRECOGNIZED COMPENSATION EXPENSE

Remaining Unrecognized Compensation Expense December 31, 2023

Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized

(in thousands)

Stock options - Class A common stock

Restricted shares - Class A common stock

Total remaining unrecognized compensation expense

fair value of the stock option awards granted during the year ended December 31, 2022 was determined on the grant date using the Black-Scholes

valuation model based on the following ranges of weighted-average assumptions:

OF STOCK OPTION AWARD GRANT DATE VALUATION MODEL

Expected volatility (1)

100 % - 100 %

Expected dividend yield (2)

Expected term (3)

5.88 - 6.05 years

Risk-free interest rate (4)

1.62 % - 3.31 %

(1) Expected volatility

is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

(2) We assumed a dividend

yield of zero as management has no plans to declare dividends in the foreseeable future.

(3) Expected term represents

the estimated period of time until an award is exercised and was determined using the simplified method.

(4) The risk-free rate

is an interpolation of yields on U.S.

Treasury securities with maturities equivalent to the expected term.

summary of stock option activity for the years ended December 31, 2023 and 2022 is as follows:

OF STOCK OPTION ACTIVITY

Stock Options

Number of Options

Weighted-Average

Exercise Price

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

Outstanding as of December 31, 2023

weighted-average grant date fair value of options granted for the year ended December 31, 2022 was $ 9.34 .

The total fair value of stock

options vested during the years ended December 31, 2023 and 2022 was approximately $ 0.1 million and $ 2.1 million, respectively.

401(k) Plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code.

Under the 401(k) Plan, participating

employees may defer a portion of their pre-tax earnings, up to the U.S.

Internal Revenue Service annual contribution limit ($23,000

for calendar year 2023).

Participants are eligible to receive a matching contribution from us of 100% of the first 3% and 50% of the

next 2% of contributions.

Matching contributions, other than safe-harbor contributions, vest 33% per year and are 100% vested after three

years of service.

Safe-harbor matching contributions are 100% vested as of the date of the contribution .

were no options granted during the years ended December 31, 2024 and 2023.

of December 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,

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United States

$ ( 172,997 )

$ ( 182,239 )

income tax (benefit) expense for the years ended December 31, 2024 and 2023 consisted of the following:

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Change in valuation allowance

Tax conversion of Operating Company

Up-C consolidation

KushCo merger

Change in tax rates

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Right of use assets

Basis difference in investment in the Operating Company

Total deferred tax liabilities

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had approximately $ 268.5

million of Federal net operating loss carryforwards, of which approximately $ 9.8

million expire in 2038, and the remainder are not subject to expiration.

Their utilization is limited to 80% of our future taxable

million of Federal net operating loss carryforwards,

of which approximately $ 9.8

million expire in 2038, and the remainder are

not subject to expiration.

Their utilization is limited to 80% of our future taxable income.

We also had approximately $ 263.5

of State net operating loss carryforwards that begin expiring in 2038, $ 14.9

million of Dutch net operating loss carryforwards that begin expiring in 2029, and $ 0.2

million Canadian net operating loss carryforwards that begin expiring in 2026.

Their utilization is limited to our future taxable

We have not completed our evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the

“Code”) Section 382, change in ownership rules.

Due to the fact that there is a full valuation allowance and losses

being generated in the current year, any limitation based on the code would not have a material impact on the net deferred tax asset

In addition, the deduction for business interest is limited to 30 percent of taxable income (the “Section 163(j)

limitation”).

The interest that is not deductible due this limitation is carried forward to subsequent years and subject to

the next years Section 163(j) limitation.

of State net operating loss carryforwards that

begin expiring in 2038, $ 14.9

million of Dutch that begin expiring in 2029,

million Canadian net operating loss carryforwards

that begin expiring in 2026.

Their utilization is limited to our future taxable income.

We have not completed our evaluation of NOL utilization

limitations under Internal Revenue Code, as amended (the “Code”) Section 382, change in ownership rules.

Due to the fact

that there is a full valuation allowance and losses being generated in the current year, any limitation based on the code would not have

a material impact on the net deferred tax asset balance.

In addition, the deduction for business interest is limited to 30 percent of

taxable income (the “Section 163(j) limitation”).

The interest that is not deductible due this limitation is carried forward

to subsequent years and subject to the next years Section 163(j) limitation.

At December 31, 2024 we had 26.3

million of business interest carryforwards, which includes $ 17.6

million of business interest carryforwards, which

includes $ 17.6

million from the KushCo merger.

The utilization of the business interest carryforward from the KushCo merger may be further limited

by the application of the Section 382 rules.

The utilization

of the business interest carryforward from the KushCo merger may be further limited by the application of the Section 382 rules.

the years ended December 31, 2024 and 2023, respectively, management performed an assessment of the realizability of our deferred tax

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is subject to audit examination for federal and state purposes for the years 2019 – 2023.

As of the date these financial statements were issued, there were not any ongoing income tax audits.

As of the date these financial statements

were issued, there were not any ongoing income tax audits.

Receivable Agreement (TRA)

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Our CODM is a committee comprised of our CEO and our CFO.

determined we had two operating segments as of December 31, 2023, 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 fourth quarter of 2023.

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 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.

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 years ended December 31, 2023 and 2022.

were no material intersegment sales during the years ended December 31, 2023 and 2022.

determined we had one operating segment as of December 31, 2024.

This operating segment aligns with how we manage our business as of

the fourth quarter of 2024.

The accounting policies of the reportable segments are the same as those described in “Note 2 - Summary

of Significant Accounting Policies.”

CODM assesses the performance of our one operating segment 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, 2024 and 2023

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

(in thousands)

Consumer Goods

Industrial Goods

Consumer Goods

Industrial Goods

For the year ended December 31,

For the Year Ended December 31, 2022

(in thousands)

Consumer Goods

Industrial Goods

Consumer Goods

Industrial Goods

Cost of sales

following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:

(in thousands)

Consumer Goods

Industrial Goods

Consumer Goods

Industrial Goods

As of December 31, 2023

As of December 31, 2022

For the year ended December 31,

(in thousands)

Consumer Goods

Industrial Goods

Consumer Goods

Industrial Goods

Accounts receivable, net

Inventories, net

Vendor deposits

following table sets forth our net sales by major product category:

OF NET SALES BY MAJOR PRODUCT CATEGORY

(in thousands)

For the year ended December 31,

(in thousands)

Industrial Vape Products

Other Industrial Products

Consumer Products - Greenlane Brands

Consumer Products - 3rd Party Brands

Total net sales

following table sets forth net sales disaggregated by geography:

OF NET SALES DISAGGREGATED BY GEOGRAPHY

(in thousands)

For the year ended December 31,

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SCHEDULE OF LONG-LIVED ASSETS BY GEOGRAPHIC AREA

(in thousands)

As of December 31,

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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.

January 1, 2024 through July 18, 2024, the Company issued 1,911,000 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.

January 16, 2024, the Company issued 184,000 shares of Class A common shares in connection with a consulting agreement which had a market

value of approximately $ 88,000 on the date of issuance.

In 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.

February 19, 2025, Greenlane Holdings, Inc.

(the “Company”) consummated a private placement (the “Private Placement”)

pursuant to a securities purchase agreement (“Purchase Agreement”) with institutional investors (the “Purchasers”)

for the purchase and sale of approximately $ 25.0 million of shares of the Company’s Class A common stock (the “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.

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

(the “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 (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”).

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.

connection with the Private Placement, the Company entered into a registration rights agreement with the Purchasers on February 18, 2025

(the “Registration Rights Agreement”), pursuant to which the Company is required to file a registration statement covering

the resale of the Securities within 30 calendar days of the closing of the offering.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data