Greenlane Holdings, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) GREENLANE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) September 30, 2025 December 31, 2024 (unaudited) ASSETS Current assets Cash $ 1,810 $ 899 Accounts receivable, net of allowance of $ 3,383 and $ 2,616 at September 30, 2025 and December 31, 2024, respectively 4,138 4,262 Inventories, net 6,250 14,215 Vendor deposits 64 3,091 Other current assets 2,080 1,305 Total current assets 14,342 23,772 Property and equipment, net 1,101 1,420 Operating lease right-of-use assets 300 1,043 Other assets 1,895 2,396 Total assets $ 17,638 $ 28,631 LIABILITIES Current liabilities Accounts payable $ 4,066 $ 9,787 Accrued expenses and other current liabilities 1,555 1,218 Customer deposits 684 2,661 Current portion of notes payable — 7,674 Current portion of operating leases 319 926 Total current liabilities 6,624 22,266 Operating leases, less current portion 1 83 Total liabilities 6,625 22,349 Commitments and contingencies (Note 7) - STOCKHOLDERS’ EQUITY Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, none issued and outstanding — — Class A common stock, $ 0.01 par value per share, 600,000,000 shares authorized, 1,386,551 and 3,023 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively * — — Class B common stock, $ 0.0001 par value per share, 30,000,000 shares authorized, and 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024 * — — Common stock, value — — Additional paid-in capital * 301,841 281,095 Accumulated deficit ( 290,944 ) ( 274,929 ) Accumulated other comprehensive income 265 265 Total stockholders’ equity attributable to Greenlane Holdings, Inc. 11,162 6,431 Non-controlling interest ( 149 ) ( 149 ) Total stockholders’ equity 11,013 6,282 Total liabilities and stockholders’ equity $ 17,638 $ 28,631 * After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 GREENLANE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (in thousands, except share and per share amounts) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net sales $ 737 $ 4,038 $ 2,994 $ 11,616 Cost of sales 5,840 1,011 7,374 6,066 Gross profit (loss) ( 5,103 ) 3,027 ( 4,380 ) 5,550 Operating expenses: Salaries, benefits and payroll taxes 1,462 1,609 3,848 6,066 General and administrative 1,956 1,771 6,550 6,864 Restructuring expenses 492 — 492 — Depreciation and amortization 87 185 394 635 Total operating expenses 3,997 3,565 11,284 13,565 Loss from operations ( 9,100 ) ( 538 ) ( 15,664 ) ( 8,015 ) Other income (expense), net: Interest expense ( 2 ) ( 3,219 ) ( 393 ) ( 4,030 ) Change in fair value of contingent consideration — — — 1,000 Gain on extinguishment of debt — — — 2,166 Other income (expense), net 169 — 42 ( 3 ) Total other income (expense), net 167 ( 3,219 ) ( 351 ) ( 867 ) Loss before income taxes ( 8,933 ) ( 3,757 ) ( 16,015 ) ( 8,882 ) Provision for (benefit from) income taxes — — — — Net loss ( 8,933 ) ( 3,757 ) ( 16,015 ) ( 8,882 ) Less: Net income (loss) attributable to non-controlling interest — — — ( 17 ) Net loss attributable to Greenlane Holdings, Inc. $ ( 8,933 ) $ ( 3,757 ) $ ( 16,015 ) $ ( 8,865 ) Net loss attributable to Class A common stock per share - basic and diluted (Note 9)* $ ( 6.44 ) $ ( 5,484.67 ) $ ( 19.88 ) $ ( 12,044.84 ) Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 9)* 1,386,551 685 805,484 736 Other comprehensive income (loss): Foreign currency translation adjustments — 4 — 3 Comprehensive loss ( 8,933 ) ( 3,753 ) ( 16,015 ) ( 8,879 ) Less: Comprehensive loss attributable to non-controlling interest — — — ( 17 ) Comprehensive loss attributable to Greenlane Holdings, Inc. $ ( 8,933 ) $ ( 3,753 ) $ ( 16,015 ) $ ( 8,862 ) * After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 GREENLANE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands, except share amounts) Shares* Amount * Capital * Deficit Income (Loss) Interest Equity Class A Common Stock Additional Paid-In Accumulated Accumulated Other Comprehensive Non- Controlling Total Stockholders’ Shares* Amount* Capital* Deficit Income (Loss) Interest Equity Balance December 31, 2024 3,023 $ — $ 281,095 $ ( 274,929 ) $ 265 $ ( 149 ) $ 6,282 Net loss — — — ( 3,867 ) — — ( 3,867 ) Exercise of Class A warrants 1,581 — 13 — — — 13 Issuance of Class A shares and warrants 6,512 — 20,730 — — — 20,730 Balance March 31, 2025 11,116 $ — $ 301,838 $ ( 278,796 ) $ 265 $ ( 149 ) $ 23,158 Net loss — — — ( 3,215 ) — — ( 3,215 ) Exercise of pre-funded warrants 1,375,435 — — — — — — Issuance of Class A shares — — 3 — — — 3 Balance June 30, 2025 1,386,551 $ — $ 301,841 $ ( 282,011 ) $ 265 $ ( 149 ) $ 19,946 Net loss — — — ( 8,933 ) — — ( 8,933 ) Balance September 30, 2025 1,386,551 $ — $ 301,841 $ ( 290,944 ) $ 265 $ ( 149 ) $ 11,013 * After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity. Class A Common Stock Additional Paid-In Accumulated Accumulated Other Comprehensive Non- Controlling Total Stockholders’ Shares* Amount* Capital* Deficit Income (Loss) Interest Equity Balance December 31, 2023 452 $ — $ 268,168 $ ( 257,289 ) $ 245 $ ( 132 ) $ 10,992 Net loss — — — ( 4,491 ) — — ( 4,491 ) Equity-based compensation 20 — 86 — — — 86 Issuance of Class A shares - (Note 9) 50 — — — — — — Other comprehensive income — — — — 2 — 2 Balance March 31, 2024 524 $ — $ 268,254 $ ( 261,780 ) $ 247 $ ( 132 ) $ 6,589 Net loss — — — ( 615 ) — ( 17 ) ( 632 ) Issuance of Class A shares - (Note 9) 181 — — — — — — Other comprehensive income — — — — ( 3 ) — ( 3 ) Balance June 30, 2024 706 $ — $ 268,254 $ ( 262,395 ) $ 244 $ ( 149 ) $ 5,954 Balance 706 $ — $ 268,254 $ ( 262,395 ) $ 244 $ ( 149 ) $ 5,954 Net loss — — — ( 3,757 ) — — ( 3,757 ) Issuance of Class A shares – (Note 9) 59 — 7,119 — — — 7,119 Issuance of Class A shares 59 — 7,119 — — — 7,119 Other comprehensive income — — — — 4 — 4 Balance September 30, 2024 765 $ — $ 275,373 $ ( 266,152 ) $ 248 $ ( 149 ) $ 9,320 Balance 765 $ — $ 275,373 $ ( 266,152 ) $ 248 $ ( 149 ) $ 9,320 * After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders’ Equity. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 GREENLANE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 2025 2024 Cash Flows from Operating Activities: Net loss $ ( 16,015 ) $ ( 8,882 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 394 635 Equity-based compensation expense — 86 Change in fair value of contingent consideration — ( 1,000 ) Accretion of debt discount 284 3,373 Gain on extinguishment of debt — ( 2,166 ) Change in provision for credit losses 767 41 Changes in operating assets and liabilities: Accounts receivable ( 643 ) ( 660 ) Inventories 7,965 4,516 Vendor deposits 3,027 40 Other current assets ( 219 ) 1,058 Accounts payable ( 5,721 ) ( 1,221 ) Accrued expenses and other liabilities 336 468 Customer deposits ( 1,977 ) ( 1,520 ) Net used in operating activities ( 11,802 ) ( 5,232 ) Cash flows from Investing Activities: Purchases of property and equipment, net ( 75 ) ( 173 ) Net cash used in investing activities ( 75 ) ( 173 ) Cash flows from Financing Activities: Proceeds from issuance of Class A common stock and warrants 20,746 5,640 Proceeds from exercise of stock options, net of costs 1,477 Proceeds from notes payable — 2,950 Payments on notes payable ( 7,958 ) ( 2,100 ) Proceeds from future receivables financing — 225 Repayments of loan against future accounts receivable — ( 939 ) Other — ( 5 ) Net cash provided by financing activities 12,788 7,248 Effects of exchange rate changes on cash — 3 Net increase in cash 911 1,846 Cash as of beginning of the period 899 463 Cash as of end of the period $ 1,810 $ 2,309 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 GREENLANE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Unaudited) (in thousands) Supplemental disclosures of cash flow information Cash paid for interest $ 107 $ 778 Non-cash financing activities: Extinguishment of debt in connection with Synergy asset purchase agreement $ — $ 2,658 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 GREENLANE HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) NOTE 1. BUSINESS OPERATIONS AND ORGANIZATION Organization Greenlane Holdings, Inc. (“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, “we”, “us”, and “our”) was formed as a Delaware corporation on May 2, 2018. We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”) of shares of our Class A common stock, $ 0.01 par value per share (“Class A common stock”), in order to carry on the business of Greenlane Holdings, LLC (the “Operating Company”). The Operating Company was organized under the laws of the state of Delaware on September 1, 2015, and is based in Boca Raton, Florida. Unless the context otherwise requires, references to the “Company” refer to us, and our consolidated subsidiaries, including the Operating Company. We merchandise premium cannabis accessories, child-resistant packaging, specialty vaporization solutions and lifestyle products in the United States, Canada, Europe and Latin America, serving a diverse and expansive customer base with thousands of retail locations, licensed cannabis dispensaries, smoke shops, multi-state operators (“MSOs”), specialty retailers, and retail consumers. 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 (the “Greenlane Brands”) . We also have category-exclusive licenses for the premium Marley Natural branded products. We are the sole manager of the Operating Company and our principal asset is Common Units of the Operating Company (“Common Units”). As the sole manager of the Operating Company, we operate and control all of the business and affairs of the Operating Company, and we conduct our business through the Operating Company and its subsidiaries. We have a board of directors and executive officers, but no employees. All of our assets are held and all of the employees are employed by wholly owned subsidiaries of the Operating Company. We have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of, and receive benefits from the Operating Company that could be significant. We determined that the Operating Company is a variable interest entity (“VIE”) and that we are the primary beneficiary of the Operating Company. Accordingly, pursuant to the VIE accounting model, beginning in the fiscal quarter ended September 30, 2019, we consolidated the Operating Company in our consolidated financial statements and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common Units held by us) on our consolidated financial statements. Our corporate structure is commonly referred to as an “Up-C” structure. The Up-C structure allows the Operating Company to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity. One of these benefits is that future taxable income of the Operating Company that is allocated to its members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the Operating Company entity level. Additionally, because a member may redeem their Common Units for shares of Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the member with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. 8 In connection with the IPO, we entered into a Tax Receivable Agreement (the “TRA”) with the Operating Company and the Operating Company’s members and a Registration Rights Agreement (the “Registration Rights Agreement”) with the Operating Company’s members. The TRA provides for the payment by us to the Operating Company’s member(s) of 85.0% of the amount of tax benefits, if any, that we may actually realize (or in some cases, are deemed to realize) as a result of (i) the step-up in tax basis in our share of the Operating Company’s assets resulting from the redemption of Common Units under the mechanism described above and (ii) certain other tax benefits attributable to payments made under the TRA. Pursuant to the Registration Rights Agreement, we have agreed to register the resale of shares of Class A common stock that are issuable to the Operating Company’s members upon redemption or exchange of their Common Units. The A&R Charter and the Fourth Amended and Restated Operating Agreement of the Operating Company (the “Operating Agreement”) require that (a) we at all times maintain a ratio of one Common Unit owned by us for each share of our Class A common stock issued by us (subject to certain exceptions), and (b) the Operating Company at all times maintains (i) a one-to-one ratio between the number of shares of our Class A common stock issued by us and the number of Common Units owned by us, and (ii) a one-to-one ratio between the number of shares of our Class B common stock owned by the non-founder members of the Operating Company and the number of Common Units owned by the non-founder members of the Operating Company. Reverse Stock Splits On June 16, 2025, 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-seven hundred and fifty reverse stock split (the “2025 Reverse Stock Split”) of our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 25, 2025. As a result of the 2025 Reverse Stock Split, every seven hundred and fifty shares of common stock issued and outstanding were converted into one share of common stock . In lieu of fractional shares we rounded up to the next whole share, and accordingly, no fractional shares were issued in connection with the 2025 Reverse Stock Split. The Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock. All outstanding options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our Common Stock have been adjusted as a result of the Reverse Stock Split, as required by the terms of each security. The number of shares available to be awarded under our Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted. See “Note 9 — Stockholders’ Equity” for more information. All share and per share amounts in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital. Liquidity and Going Concern Our primary requirements for liquidity and capital are working capital and general corporate needs. Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from other equity issuances. The Company has incurred net losses of $ 16.0 million and $ 8.9 million for the nine months ended September 30, 2025 and 2024, respectively. We used $11.8 million of cash in operating activities for the nine months ended September 30, 2025. While we completed capital raises after quarter-end, there is inherent uncertainty in our ability to generate sufficient cash to fund operations over the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans include reducing operating costs, monetizing legacy inventory, and seeking additional financing. See “Subsequent Events” for financing events after September 30, 2025. 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. ■ Increasing revenue by introducing new products and acquiring new customers. ■ Execute on strategic partnerships accretive to margins and operating cash ■ Seeking additional capital through the issuance of debt or equity securities. The consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty. For a more complete description of our initiatives, see below and the Management Discussion and Analysis. 9 Common Stock and Warrant Offerings. On August 7, 2024, the Company issued a note (the “Note”) in the principal amount of $ 3,237,269 to Cobra. The Note was 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 were 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 2,159 shares at the Qualified Offering Price. The Note was repaid in full in February 2025 in the amount of $ 4.0 million. On 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 3,152 units and pre-funded units. 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 $ 1,875 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. In February 2025, the Company exchanged 6,501 two and one-half ( 2.5 ) year warrants with an exercise price of $ 2,235 per share. See Note 9 — Stockholders’ Equity for more information. On October 29, 2024, the Company entered into an Exchange Agreement with its Senior Subordinated Lender, whereby the Company agreed to exchange an aggregate of $ 4,617,307 of debt originally owed to Agile Capital Funding LLC and Cedar Advance LLC in a 3(a)(9) exchange for new Senior Subordinated Notes in the principal amount of $ 4,000,000 due one year from issuance (the “Exchange Note”), reducing outstanding indebtedness by approximately $ 617,000 . The Exchange Note was convertible at the option of the holder at $ 2,377.50 per share. In connection with the Exchange, the Company issued an aggregate of 1,683 5 five-year warrants with an exercise price of $ 2,280 per share (the “Exchange Warrants”). In February 2025 the Company repaid the Senior Subordinated Lender in full in the amount of $ 4.0 million. In February 2025, the Company exchanged 2,056 two and one-half ( 2.5 ) year warrants with an exercise price of $ 2,235 per share for the Series B warrants issued in the February 2025 private placement. See Note 9 — Stockholders’ Equity for more information. On 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 $ 892.50 per Common Unit (“the 2025 Offering”). The entire transaction has been priced at the market under Nasdaq rules. The 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 $ 1,115.63 (“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 $ 2,231.25 (“Series B Warrant” and together with the Series A Warrant, the “Warrants”). The initial exercise price of each Series A Warrant is $ 1,115.63 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 $ 2,231.25 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. Also, 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 exchanged with the Company such existing warrants for approximately 8,172 new warrants to purchase common stock, substantially in the form of the Series B Warrants. During the nine months ended September 30, 2025 the Holders exercised all of the Series B warrants issued to them. Future Receivables Financings In July, August, October, and November 2023, the Company received an aggregate of approximately $ 3.9 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders 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. As such 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. During 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. 10 Secured Bridge Loan On September 22, 2023, the Company entered into a secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023 with Synergy Imports, LLC (the “Secured Bridge Loan Lender”). Pursuant to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a bridge loan of $ 2.2 million in new funds. Additionally, the Secured Bridge Loan Lender agreed to defer payments totaling $ 2,028,604 already owed by the Company under existing payment obligations and potentially defer up to an additional $ 2,655,778 which may become due pursuant to existing agreements during the term of the September 2023 Loan Agreement. Subject to certain exceptions, the Company agreed to pledge all of its assets, with the exception of deposit accounts and accounts receivable, as collateral. Additionally, the Company agreed to transfer one US patent and two related foreign patents and a related trademark in exchange for an exclusive license back of such assets in the area of smoking products and accessories in connection with the September 2023 Loan Agreement. In 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, which was subsequently repaid in full in connection with the February 2025 Private Placement as set forth below. Note Payable On June 7, 2024, the Company entered into a subscription agreement with Cobra Alternative Capital Strategies, LLC (the “Subscription Agreement”). 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. See “Note 6 - Long Term Debt” for more information. 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. On October 29, 2024, the Company entered into the First Amendment to Amended and Restated Secured Promissory Note (the “Note Amendment”) with Cobra. 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 was changed to 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 $ 2,377.50 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 667 5 five-year warrants with an exercise price of $ 2,280 per share which are identical to the Exchange Warrants. This loan was repaid in full as part of the February 2025 Private Placement. 11 Management Initiatives In an effort to minimize losses and working capital needs, management is focusing on cost controls, simplifying operations, and monetizing legacy assets. In March 2025 we entered into two strategic marketing partnerships. First, we launched on the Mainstem B2B procurement marketplace platform for enhanced accessibility within a data driven ecosystem to reach the total addressable market of single and multi-state operators and brick and mortar stores. Second, we selected Cannabis Creative Group (CCG) to lead the Company’s new marketing strategy and support future growth for the Company’s B2B-focused brands, including Greenlane Wholesale and KushCo. CCG began work in Q2 and is focused on driving campaigns towards new acquisitions and retargeting of wholesale customers. In January 2025 we announced an exclusive distribution partnership with Green Gruff to offer a comprehensive line of veterinarian approved organic cannabidiol-infused supplements and treats manufactured in the U.S. to support a dog’s overall health and vitality. In Q2 2025 we entered into two new distribution agreements to supplement our vaporizer category and offer customers best in class product assortment. First, we entered into a distribution agreement with Greentank Technologies (Greentank), a leading innovator in the aerosolization technology industry, providing advanced solutions for the cannabis, nicotine, and wellness markets including Greentank’s full assortment of cartridges and vaporizers. Second, we entered into an agreement with ALD Group Limited to distribute their wide range of vaporization products and where customers can benefit from an accelerated delivery window available through ALD’s advanced automated production platform. In June 2025 we announced new Sales leadership and the restructuring of our Sales team to provide enhanced service to our customers and fully support the execution of our Sales plan. We have successfully renegotiated many of our vendor and supplier partnership terms and are continuing to improve working capital arrangements with our vendors and suppliers. We have made continued progress consolidating and streamlining our office, warehouse, and distribution operations footprint. We have also reduced our digital footprint by consolidating our digital ecommerce presence onto one platform resulting in improved efficiencies and reduced cost. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The condensed consolidated results of operations for the three months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other future annual or interim period. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair statement of the Company’s financial position and operating results. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year. Principles of Consolidation Our condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating Company’s consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 12 Use of Estimates Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. 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 for slow-moving or obsolete inventory; the realizability of deferred tax assets; the useful lives of property and equipment; 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. 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. Cash Cash balances at financial institutions may, at times, exceed FDIC insured limits. The Company has not experienced losses in such accounts and monitors the credit quality of depository institutions on an ongoing basis. Accounts receivable and credit losses Accounts receivable are recorded at invoiced amounts, net of an allowance for expected credit losses. The allowance is estimated using a combination of historical loss experience, customer credit quality, current conditions, specific risk assessments, and forward-looking factors. Receivables are written off when collection efforts are exhausted. Concentrations of credit risk and significant customers Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. The Company maintains cash deposits with high-quality financial institutions and, at times, such balances may exceed federally insured limits. Concentrations of credit risk with respect to trade receivables are limited by the large number of customers and the Company’s ongoing credit evaluations. For the three and nine months ended September 30, 2025 and 2024, no single customer accounted for more than 10% of net sales, respectively. Inventory Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted-average method and includes purchasing, handling, and storage costs. During the three months ended September 30, 2025, the Company recorded a $ 5.0 million increase to its reserve for slow-moving and obsolete inventory to reflect the impact of continued aging and limited marketability of legacy product lines. As of September 30, 2025, total gross inventory was approximately $ 23.0 million, with reserves of approximately $ 17.0 million, resulting in a net carrying value of approximately $ 6.0 million. The reserve is developed by aging bucket and expected recovery rates using observable exit pricing from recent transactions and indicative bids obtained in connection with our inventory monetization activities. As a sensitivity data point, a 10 percentage point reduction in expected recovery rates across the aged categories would increase the reserve by approximately $ 0.6 million based on balances as of September 30, 2025. Management will continue to evaluate recoverability each reporting period and adjust the reserve as necessary based on realized liquidation results. After September 30, 2025, the Company initiated an inventory monetization project to accelerate disposition of aged inventory; the Board is considering strategic alternatives for the legacy distribution business. Management will continue to evaluate recoverability each reporting period and adjust the reserve as necessary based on actual sell-through results. Segment Reporting We manage our global business operations through our operating and reportable business segments. As of September 30, 2025, 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 comprised of our Chief Financial Officer (“CFO”), manages our business, makes resource allocation and operating decisions, and evaluates operating performance. Revenue Recognition Revenue 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 and refunds. Taxes collected from customers for remittance to governmental authorities are excluded from net sales. We 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. We provide no warranty on products sold. Product warranty is provided by the manufacturers. For certain product offerings such as child-resistant packaging, closed-system vaporization solutions and custom-branded retail products, we may receive a deposit from the customer (generally 25 % - 50 % of the total order cost, but the amount can vary by customer contract) when an order is placed by a customer. We typically complete these orders within one to nine 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 nine months ended September 30, 2025 and the year ended December 31, 2024. We estimate product returns based on historical experience and record them as a refund liability that reduces the net sales for the period. We analyze actual historical returns, current economic trends and changes in order volume when evaluating the adequacy of our sales returns allowance in any reporting period. Our liability for returns, which is included within “Accrued expenses and other current liabilities” in our consolidated balance sheets, was approximately $ 0.1 million and $ 0.1 million as of September 30, 2025 and December 31, 2024, respectively. We elected to account for shipping and handling expenses that occur after the customer has obtained control of products as a fulfillment activity in cost of sales. Shipping and handling fees charged to customers are included in net sales upon completion of our performance obligations. We apply the practical expedient provided for by the applicable revenue recognition guidance by not adjusting the transaction price for significant financing components for periods less than one year. We also apply the practical expedient provided by the applicable revenue recognition guidance based upon which we generally expense sales commissions when incurred because the amortization period is one year or less. Sales commissions are recorded within “Salaries, benefits and payroll tax expenses” in the consolidated statements of operations and comprehensive loss. The Company previously transitioned to a commission revenue model for the majority of the sales for the Industrial segment operating as a sales agent servicing vape customers and receiving a commission for these services. The Company is currently in the process of transitioning back to working directly with these customers and recognizing gross revenue versus commission revenue. One customer represented approximately 12 % and 10 % of net sales for the three and nine months ended September 30, 2025, respectively. Two customers represented approximately 36 % and 27 % of net sales for the three and nine months ended September 30, 2024, respectively. 13 Restructuring and Transformation Costs During the three and nine months ended September 30, 2025, we incurred costs in connection with evaluating digital-asset alternatives and transitioning to a crypto-treasury operating model, as well as personnel-related actions under our cost-reduction strategy. These costs are recognized within operating expenses. The Board is considering strategic alternatives for the legacy distribution business; the Company does not present discontinued operations. Recently Adopted Accounting Guidance In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) : Improvements To Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Recently issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entity’s expenses to help investors (i) better understand the entity’s performance, (ii) better assess the entity’s prospects for future cash flows, and (iii) compare an entity’s performance over time and with that of other entities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2024-03. The FASB and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2024. Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. NOTE 3. BUSINESS ACQUISITIONS AND DISPOSITIONS EU Subsidiary Purchase Agreement 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 September 30, 2025, the transaction is in dispute as there was pending consideration obligations due to be transferred to the Company which were not met, as well as other monetary obligations of the purchasers that remain unsatisfied. As a result the Company did not record a sale of the business under ASC 805. Business Combinations . The Company intends to vigorously pursue its claims against Shavita and the purchaser group. As of September 30, 2025, the Company continues to run the operations, however sales were not material for the three and nine months ended September 30, 2025 and 2024. NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS Equity Securities Without a Readily Determinable Fair Value Our investment in equity securities without readily determinable fair value consist of ownership interests in Airgraft Inc. 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. 14 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. We did not identify any impairment adjustments related to these equity securities during the three and nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025 and December 31, 2024, the carrying value of our investment in equity securities without a readily determinable fair value was approximately $ 1.9 million, respectively, included within “Other assets” in our condensed consolidated balance sheets. NOTE 5. LEASES Greenlane as a Lessee As of September 30, 2025, we had facilities financed under operating leases consisting of a warehouse combined with an office with lease term expirations in 2026. Lease terms are generally three 3 to seven years for warehouses and office space. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2025. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. SCHEDULE OF LESSEE OPERATING LEASE LIABILITY MATURITY (in thousands) Operating Leases Remainder of 2025 $ 248 2026 81 Total minimum lease payments $ 329 Less: imputed interest ( 9 ) Present value of minimum lease payments $ 320 Less: current portion 319 Long-term portion $ 1 Rent expense under operating leases was approximately $ 0.3 million and $ 0.3 million for the three months ended September 30, 2025 and 2024, respectively. Rent expense under operating leases was approximately $ 1.1 million and $ 0.7 million for the nine months ended September 30, 2025 and 2024, respectively. The following expenses related to our operating leases were included in “general and administrative” expenses within our condensed consolidated statements of operations and comprehensive loss: SCHEDULE OF LEASE COST (in thousands) 2025 2024 For the nine months ended September 30, (in thousands) 2025 2024 Operating lease cost 1,082 685 Variable lease cost — — Total lease cost $ 1,082 $ 685 The table below presents lease-related terms and discount rates as of September 30, 2025: Operating Leases Weighted average remaining lease terms 0.25 years Weighted average discount rate 2.3 % 15 NOTE 6. DEBT Our debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated: SCHEDULE OF DEBT 2025 2024 (in thousands) September 30, 2025 December 31, 2024 Note Payable $ — $ 3,674 Exchange Note — 4,000 Total long term debt — 7,674 Less unamortized debt issuance costs — — Less current portion of debt — ( 7,674 ) Debt, net, excluding operating and finance leases and liabilities $ — $ — Future Receivables Financings In July, August, October, and November 2023, the Company received an aggregate of approximately $ 3.9 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders 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. As such 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. During 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. Exchange Agreement On 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 $ 2,377.50 per share. In connection with the Exchange, the Company issued an aggregate of 1,683 5 five-year warrants with an exercise price of $ 2,280 per share (the “Exchange Warrants”). The 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, 2024. As noted above, the Company issued 1,683 common stock warrants which were deemed to classified as equity as the warrants were exercisable for a fixed price of $ 2,280 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 1,683 Exchange Warrants were valued at $ 2.6 million using the Black-Scholes model. As part of the 2025 Offering, the Company used a portion of the proceeds to pay off the Exchange Note in full in the amount of $ 4.0 million during the nine months ended September 30, 2025. Note Payable On 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 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 were 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 2,159 shares at the Qualified Offering Price. 16 On October 29, 2024, the Company entered into the First Amendment to Amended and Restated Secured Promissory Note (the “Note Amendment”) with Cobra. Pursuant to the Note Amendment, Cobra agreed to extend the Maturity Date of its senior promissory note dated May 1, 2024. The new Maturity Date was October 29, 2025 . In 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 $ 2,377.50 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 667 5 five-year warrants with an exercise price of $ 2,280 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 $ 2,280 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 667 Exchange Warrants were valued at $ 1.0 million using the Black-Scholes model. As part of the 2025 Offering, the Company used a portion of the proceeds to pay off the Note in full in the amount of $ 4.0 million during the nine months ended September 30, 2025. Secured Bridge Loan On September 22, 2023, the Company entered into a secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023 with Synergy Imports, LLC (the “Secured Bridge Loan Lender”). Pursuant to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a nine-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. On 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. 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 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 nine months ended September 30, 2024. As noted above, the company issued 667 common stock warrants which were deemed to classified as equity as the warrants were exercisable for a fixed price of $ 2,280 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 667 Exchange Warrants were valued at $ 1.0 million using the Black-Scholes model. 17 NOTE 7. COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings involving a variety of matters. We do not believe there are any pending legal proceedings that will have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. On November 13, 2024, Pryor Cashman made a demand for arbitration for unpaid legal invoices in the amount of $ 320,512 . The Company intends to dispute these claims in arbitration (Arbitration, S.D. N.Y.). Recently Earth’s Healing, Inc.; Redbud Roots Inc., and Summit Industrial Solutions LLC vs. Shenzhen Smoore Technology Co. Ltd.; Jupiter Research LLC; Greenlane Holdings, Inc.; 3win Corp.; and CB Solutions, LLC dba Canna Brand Solutions, Lead Case No. 25-cv-1428. The three Direct Purchaser Plaintiffs (DPPs) antitrust cases below, filed a consolidated amended complaint. On February 11, 2025, Earth’s Healing, Inc. (Case No. 25-Cv-1428 (N.D. Cal.)) brought a purchaser class action antitrust action against four U.S. Distributors of Ccell products, including Greenlane Holdings. Inc. The Company believes the case is baseless and without merit, and the Company is jointly defending the case with the other named defendants. On April 10, 2025, Redbud Roots Inc. (Case No. 3:25-cv-03221 (N.D. Cal.)) brought a purchaser class action antitrust action against four U.S. Distributors of Ccell products, including Greenlane Holdings. Inc. The Company is jointly defending the case with the other named defendants. On April 17, 2025, Summit Industrial Solutions LLC. (Case No. 3:25-cv-3431 (N.D. Cal.) .)) brought a purchaser class action antitrust action against four U.S. Distributors of Ccell products, including Greenlane Holdings. Inc. The Company is jointly defending the case with the other named defendants. On December 17, 2024, Crossmark, Inc. brought a breach of contract suit against our subsidiary, Warehouse Goods, LLC, in the amount of $ 297,182 . The Company intends to defend this breach of contract suit vigorously (Case No. 502024CA011856XXXAM B AI). On 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 cannot assess the likely outcome of the investigation. On 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 is currently jointly defending these claims with the other named defendants in the case. On November 15, 2024, Vaporous Technologies, Inc. brought a suit for liquidated damages in the amount of $ 664,289 under the September 2020 Manufacturing Agreement by Vaporous against Warehouse Goods. LLC. We have not taken any reserves for litigation for the three and nine months ended September 30, 2025 and 2024, respectively. Other Contingencies We are potentially subject to claims related to various non-income taxes (such as sales, value added, consumption, and similar taxes) from various tax authorities, including in jurisdictions in which we already collect and remit such taxes. If the relevant taxing authorities were successfully to pursue these claims, we could be subject to significant additional tax liabilities. See “Note 5—Leases” for details of our future minimum lease payments under operating lease liabilities. See “Note 11—Incomes Taxes” for information regarding income tax contingencies. NOTE 8. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION Property and Equipment, net The following is a summary of our property and equipment, at costs less accumulated depreciation and amortization: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT LESS DEPRECIATION AND AMORTIZATION (in thousands) Estimated useful life September 30, 2025 December 31, 2024 Furniture, equipment and software 3 - 7 years $ 8,595 $ 8,595 Leasehold improvements Lesser of lease term or 5 years 33 33 Work in process 95 20 Property and equipment, gross 8,723 8,648 Less: accumulated depreciation ( 7,622 ) ( 7,228 ) Property and equipment, net $ 1,101 $ 1,420 Depreciation expense for property and equipment was approximately $ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively. Depreciation expense for property and equipment was approximately $ 0.4 million and $ 0.6 million for the three months ended September 30, 2025 and 2024, respectively. 18 Other Current Assets The following table summarizes the composition of other current assets as of the dates indicated: SCHEDULE OF OTHER CURRENT ASSETS (in thousands) September 30, 2025 December 31, 2024 Other current assets: VAT refund receivable $ 46 $ 43 Prepaid expenses 375 301 Indemnification receivable, net 7 7 Non-inventory deposits 1,152 952 Customs bonds 500 — Other — 2 Other current assets $ 2,080 $ 1,305 Accrued Expenses and Other Current Liabilities The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (in thousands) September 30, 2025 December 31,2024 Accrued expenses and other current liabilities: Accrued employee compensation $ 614 $ 1,052 Accrued professional fees 765 166 Other accrued expenses 176 — Accrued expenses and other current liabilities $ 1,555 $ 1,218 Customer Deposits For certain product offerings we may receive a deposit from the customer (generally 25 % - 50 % of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. We typically complete orders related to customer deposits within one to nine months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of sale with each customer. Changes in our customer deposits liability balance during the three months ended September 30, 2025 were as follows: SCHEDULE OF CHANGES IN CUSTOMER DEPOSIT LIABILITY (in thousands) Customer Deposits Balance as of December 31, 2024 $ 2,661 Increases due to deposits received, net of other adjustments — Customer adjustments ( 2,309 ) Revenue recognized 332 Balance as of September 30, 2025 $ 684 Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) for the periods presented were as follows: SCHEDULE OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS (in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total Balance at December 31, 2023 $ 245 $ — $ 245 Other comprehensive income (loss) 20 — 20 Less: Other comprehensive (income) loss attributable to non-controlling interest — — — Balance at December 31, 2024 $ 265 $ — $ 265 Other comprehensive income (loss) — — — Less: Other comprehensive (income) loss attributable to non-controlling interest — — — Balance at September 30, 2025 $ 265 $ — $ 265 Supplier Concentration Our four largest vendors accounted for an aggregate of approximately 34 % and 44 % of our total purchases for the three months ended September 30, 2025 and 2024, respectively. Our four largest vendors accounted for an aggregate of approximately 87 % and 18 % of our total purchases for the nine months ended September 30, 2025 and 2024, respectively. 19 Related Party Transactions Renah Persofsky, who served as a Greenlane Director until October 23, 2025, is also a Principal Owner of Green Gruff USA Inc, (“Green Gruff”). In January 2025 the Company entered into an amended distribution agreement with Green Gruff. Nicholas Kovacevich, our former Chief Corporate Development Officer owns capital stock of Blum Holdings Inc. (“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. Three individuals who were employees of the Company at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan taken out on September 22, 2023, however, none were executive officers or directors of the Company. On October 24, 2025, the Company appointed its Chief Investment Officer to manage digital-asset treasury activities. The Chief Investment Officer has relationships within the Berachain ecosystem. As of September 30, 2025, there were no related-party transactions to disclose. The Company will treat the Chief Investment Officer and certain Berachain-affiliated entities as related parties under ASC 850 and will disclose any material transactions in future periods. See Note 13. NOTE 9. STOCKHOLDERS’ EQUITY Shares of our Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends, whether cash or stock, and proceeds upon dissolution, winding up or liquidation). All Class B shares were converted to Class A in December 2022. Accordingly, we no longer have Class B shares outstanding, and references to Class B are for historical context only. Each share of our Class A common stock entitles the record holder thereof to one vote on all matters on which stockholders generally are entitled to vote, and except as otherwise required in the A&R Charter, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of preferred stock). Reverse Stock Split Effective June 25, 2025, the Company completed a one-for-750 reverse stock split of our issued and outstanding shares of Common Stock, as further described in “Note 1 – Business Operations and Organization.” As a result of the 2025 Reverse Stock Split, every 750 shares of Common Stock issued and outstanding were converted into one share of Common Stock. In lieu of fractional shares, we rounded up to the next whole share, and accordingly, no fractional shares were issued in connection with the 2025 Reverse Stock Split. The Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock. All share and per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital. Common Stock and Warrant Offerings August 2024 Private Placement On August 12, 2024, the Company entered into a securities purchase agreement with certain holders (the “Holders”) pursuant to which we agreed to issue and sell an aggregate of 78 shares of our Class A common stock, pre-funded warrants to purchase up to 3,075 shares of our Class A common stock (the “August 2024 Pre-Funded Warrants”) and warrants to purchase up to 6,303 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 issued an aggregate of 3,152 units and pre-funded units. 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 $ 1,875 per share. The common warrant were exercisable on the initial exercise date described in the common warrant and will expire 5.0 years from such date. On February 18, 2025, the Company entered into an Exchange Agreement with 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 exchanged with the Company such existing warrants for approximately 8,172 new warrants to purchase common stock, substantially in the form of the Series B Warrants. The Company exchanged 6,117 warrants not previously exercised into two and one-half ( 2.5 ) year warrants in the form of the Series B Warrants with an exercise price of $ 2,235 per share. 20 October 2024 Private Placement On 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 2,350 5 five-year warrants with an exercise price of $ 2,280 per share (the “Exchange Warrants”). The Exchange Warrants which were deemed to be classified as equity as the warrants were exercisable for a fixed price of $ 2,280 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 extinguishments, the 2,350 Exchange Warrants were valued at $ 3.7 million using the Black-Scholes model. In February 2025, the Company exchanged the remaining 2,056 warrants not previously exercised into warrants which were substantially equivalent to the Series B Warrants which were two and one-half ( 2.5 ) year warrants in the form of the Series B Warrants with an exercise price of $ 892.50 per share. February 2025 Private Placement On February 19, 2025, the Company consummated a 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 and investor warrants at a price of $ 892.50 per Common Unit. The entire transaction was priced at the market under Nasdaq rules. The 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 $ 1,115.63 (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 $ 2,231.25 (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”). The initial exercise price of each Series B Warrant is $ 2,231.25 per share of Common Stock or pursuant to an alternative cashless exercise option The initial exercise price of each Series A Warrant is $ 1,115.63 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 $ 2,231.25 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. In 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. As part of the Purchase Agreement the Company agreed to place $ 2.5 million into an escrow account to ensure there were no misrepresentations were made by the Company as part of the private placement. As of September 30, 2025. the escrow balance of $ 1.7 million was repaid to the Company and $ 0.8 million was credited back to the Purchasers as a result of late filings made by the Company. Exercise of Pre-Funded Warrants During the nine months ended September 30, 2025, investors exercised a total of 1,375,435 pre-funded warrants previously issued in the February 2025 financing (including 1,353,658 Series B pre-funded warrants and 21,777 additional pre-funded warrants). All exercises were effected on a cashless basis; the Company received no proceeds. There were no pre-funded warrant exercises during the three months ended September 30, 2025. Net Loss Per Share Basic net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive instruments. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common stock is as follows (in thousands, except per share amounts): SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED (in thousands, except per share data) 2025 2024 2025 2024 Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2025 2024 2025 2024 Numerator: Net loss $ ( 8,933 ) $ ( 3,757 ) $ ( 16,015 ) $ ( 8,882 ) Less: Net income (loss) attributable to non-controlling interests — — — ( 17 ) Net loss attributable to Class A common stockholders $ ( 8,933 ) $ ( 3,757 ) $ ( 16,015 ) $ ( 8,865 ) Denominator: Weighted average shares of Class A common stock outstanding 1,386,551 685 805,484 736 Net loss per share of Class A common stock - basic and diluted $ ( 6.44 ) $ ( 5,484.67 ) $ ( 19.88 ) $ ( 12,044.84 ) The June 2022 Pre-Funded Warrants, October 2022 Pre-Funded Warrants, July 2023 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class A common stock for the three months ended September 30, 2025 and 2024, respectively, beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive and their exercise was virtually assured. The August 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. The February 2025 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 nine months ended September 30, 2025, beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive and their exercise was virtually assured. 21 For the three and nine months ended September 30, 2025 and 2024, respectively, stock options and warrants to purchase Class A common stock were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock because the effect would have been anti-dilutive. 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): SCHEDULE OF OUTSTANDING POTENTIALLY DILUTIVE SECURITIES 2025 2024 As of September 30, 2025 2024 Stock options to purchase common stock 5 5 Warrants to purchase common stock 31,552 1,032 Antidilutive Securities, value 31,557 1,037 NOTE 10. COMPENSATION PLANS Amended and Restated 2019 Equity Incentive Plan In April 2019, the Company adopted the Greenlane Holdings, Inc. 2019 Equity Incentive Plan (the “2019 Plan”). The Plan has been amended and restated several times since adoption. As of September 30, 2025, the Company’s equity incentive plan balances, including the total shares authorized for issuance, awards outstanding, and shares available for future grant, reflect all amendments approved through that date, including the plan’s evergreen feature. Changes approved after September 30, 2025 are disclosed in “Subsequent events” in Note 13. Equity-Based Compensation Expense Equity-based compensation expense is included within “salaries, benefits and payroll taxes” in our condensed consolidated statements of operations and comprehensive loss. We recognized equity-based compensation expense as follows: SCHEDULE OF EQUITY BASED COMPENSATION EXPENSE (in thousands) 2025 2024 Nine months ended September 30, (in thousands) 2025 2024 Stock options - Class A common stock $ — $ — Restricted shares - Class A common stock — 86 Total equity-based compensation expense $ — $ 86 The Company did not record equity-based compensation for the three months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was no remaining unrecognized compensation expense. 22 NOTE 11. INCOME TAXES As a result of the IPO and the related transactions completed in April 2019, we owned a portion of the Common Units of the Operating Company, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, the Operating Company was generally not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by the Operating Company was passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating Agreement. The Operating Company was also subject to taxes in foreign jurisdictions. We are a corporation subject to U.S. federal income taxes, in addition to state and local income taxes, based on our share of the Operating Company’s pass-through taxable income. Effective on December 31, 2022, the Operating Company became wholly owned by us. As a result, the Operating Company’s tax status was converted from a partnership to a disregarded entity. Starting in 2023, 100% of the Operating Company’s U.S. income and expenses is included in our US and state tax returns. During the three months ended September 30, 2025 and 2024, respectively, management performed an assessment of the realizability of our deferred tax assets based upon which management determined that it is not more likely than not that the results of operations will generate sufficient taxable income to realize portions of the net operating loss benefits. Consequently, we established a full valuation allowance against our deferred tax assets and reflected a carrying balance of $ 0 as of September 30, 2025 and December 31, 2024, respectively. In the event that management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance will be made, which would reduce December the provision for income taxes. Uncertain Tax Positions For the three months ended September 30, 2025 and 2024, respectively, we did no t have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. The Company is subject to audit examination for federal and state purposes for the years still eligible under statutory guidelines. As of the date these financial statements were issued, there were not any ongoing income tax audits. Tax Receivable Agreement (TRA) We entered into the TRA with the Operating Company and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment by the Operating Company to the members of 85 % of the amount of tax benefits, if any, that we may actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions of Common Units as described in “Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under the TRA. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Operating Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate. As noted above, we evaluated the realizability of the deferred tax assets resulting from the IPO and the related transactions completed in April 2019 and established a full valuation allowance against those benefits. As a result, we determined that the amount or timing of payments to noncontrolling interest holders under the TRA are no longer probable or reasonably estimable. Based on this assessment, our TRA liability was none as of September 30, 2025 and December 31, 2024. If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, we will record a liability related to the TRA, which would be recognized as expense within our condensed consolidated statements of operations and comprehensive (loss) income. During the three months ended September 30, 2025 and 2024, respectively, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA. NOTE 12. SEGMENT REPORTING We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. The CFO acts as the CODM. We determined we had one operating segment as of September 30, 2025. 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.” 23 Our 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 three months ended September 30, 2025 and 2024. SCHEDULE OF NET SALES BY MAJOR PRODUCT CATEGORY (in thousands) 2025 2024 Three Months Ended September 30, (in thousands) 2025 2024 Net sales $ 737 $ 4,038 Cost of sales 5,840 1,011 Gross profit (loss) $ ( 5,103 ) $ 3,027 (in thousands) 2025 2024 Nine Months Ended September 30, (in thousands) 2025 2024 Net sales $ 2,994 $ 11,616 Cost of sales 7,374 6,066 Gross profit (loss) $ ( 4,380 ) $ 5,550 The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments: SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT (in thousands) June 30, 2025 December 31, 2024 As of (in thousands) September 30, 2025 December 31, 2024 Accounts receivable, net $ 4,138 $ 4,262 Inventories $ 6,250 $ 14,215 Vendor deposits $ 64 $ 3,091 The following table sets forth net sales disaggregated by geography: SCHEDULE OF NET SALES DISAGGREGATED BY GEOGRAPHY (in thousands) 2025 2024 Three Months Ended September 30, (in thousands) 2025 2024 United States $ 733 $ 4,027 Canada 4 — Europe — 11 Total net sales $ 737 $ 4,038 (in thousands) 2025 2024 Nine Months Ended September 30, (in thousands) 2025 2024 United States $ 2,990 $ 9,252 Canada 4 157 Europe — 2,207 Total net sales $ 2,994 $ 11,616 The following table sets forth our long-lived assets by geographic area, which consist of property and equipment, net, and operating lease right-of-use assets: SCHEDULE OF LONG-LIVED ASSETS BY GEOGRAPHIC AREA As of (in thousands) September 30, 2025 December 31, 2024 United States $ 1,401 $ 2,459 Canada — 4 Europe — — Total long-lived assets $ 1,401 $ 2,463 24 NOTE 13. SUBSEQUENT EVENTS Private placement and adoption of digital asset treasury strategy On October 20, 2025, the Company entered into subscription agreements for a private placement of Class A common stock and pre-funded warrants, such pre-funded warrants being subscribed for in U.S. dollars, USDC or USDT (or a combination thereof) or BERA, the native digital asset of the Berachain blockchain. The BERA consideration was valued at $ 1.9477 per BERA, based on a a seven-day trailing VWAP $ 0.9836 in the case of the Berachain Foundation. On October 23, 2025, the Company closed the private placement, and received approximately $ 24.3 million in cash and approximately $ 19.0 million in USDT and USDC, and held approximately 54.2 million BERA at closing. Beginning with periods after October 23, 2025, in-scope crypto assets will be measured at fair value with changes recognized in net income; no amounts are reflected in the Company’s financial statements for the period ended September 30, 2025. See the Company’s Current Report on Form 8-K filed on October 20, 2025 for the terms of the private placement, including the issuance of pre-funded warrants, exercise price, automatic cashless exercise upon stockholder approval, and beneficial ownership limits related to the pre-funded warrants. The Company intends to use the majority of proceeds to acquire BERA and to establish digital asset treasury operations, with approximately $ 3.0 million earmarked for legacy operations. The private placement and associated adoption of a digital asset treasury strategy are non-recognized subsequent events under ASC 855. The nature of the transactions and the expected financial statement impact in future periods are disclosed below. Accounting policy and GAAP implications Crypto assets that meet the scope of ASU 2023-08 (ASC 350-60) are measured at fair value each reporting period with changes recognized in net income. Beginning with periods after October 23, 2025, the Company will present subsequent changes in the fair value of its crypto assets in the consolidated statements of operations and will provide the required ASC 820 fair value and ASC 350-60 roll-forward disclosures, including principal market, pricing sources, and significant holdings. Because these transactions occurred after September 30, 2025, no amounts related to these crypto assets are recognized in the accompanying 2025’s third quarter financial statements. Subsequent to September 30, 2025, the Company established a digital-asset treasury and expects to begin holding crypto assets in the fourth quarter of 2025. See Part II, Item 1A “Risk Factors” for a discussion of risks related to custody, valuation, pricing volatility, and regulatory matters. Equity Incentive Plan Subsequent to September 30, 2025, the Company included in its proxy statement a proposal to increase the share reserve under the Company’s equity incentive plan to 3,000,000 shares. The plan already includes an evergreen provision, approved at the December 2024 annual meeting, that automatically increases the plan reserve on January 1 each year by 15 percent of the total number of shares outstanding as of the prior December 31. The Company expects to file a registration statement on Form S-8 to register any additional shares following stockholder approval. These proposed changes are not reflected in the Company’s balances as of September 30, 2025. Governance update On October 23, 2025, the Board established a Digital Assets Committee to oversee the Company’s digital-asset treasury strategy. Related-party On October 24, 2025, the Company entered into an employment agreement with its Chief Investment Officer to manage the BERA treasury strategy. The executive has disclosed ownership interests and ongoing activities in a separate digital asset trading business and an economic interest in BERA awards from a Berachain-affiliated entity. Management has concluded there were no related-party transactions requiring disclosure under Item 404(a) of Regulation S-K as of the 8-K filing date; however, the Company will treat the officer as a related party under ASC 850 and will monitor transactions with the Berachain Foundation or other Berachain-affiliated entities and will disclose any material related-party transactions in future periods. Strategic Alternatives After September 30, 2025, the Board began evaluating strategic alternatives for the legacy distribution business. Inventory After September 30, 2025, the Company initiated an Inventory Monetization Project to accelerate disposition of aged inventory. 25