What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-21 · 428 added, 454 removed, 79 unchanged (92% of the section changed)

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

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

and lifestyle products.

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

significant industrial line of business to the Greenlane platform.

These acquisitions strengthened our leading position as a consumer

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

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

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

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

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

such as Amazon.

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

third-party products that we believe will, over time, deliver higher margins and create long-term value for our customers and shareholders.

Our wholly-owned Greenlane Brands includes our recently launched more affordable product line – Groove, innovative silicone pipes

and accessories and premium ancillary product brand – Higher Standards.

We also have category exclusive licenses for the premium

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

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

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

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

B2B capabilities.

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

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

These platforms allow

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

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

We distribute

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

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

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

to Accelerate Path to Profitability and Capitalize the Business

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

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

Our key initiatives include:

Enhancements:

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

seamless shopping experience for our wholesale and retail customers.

Facility Footprint Rationalization:

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

and improving fulfillment practices.

Headcount Reduction:

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

we collectively right-size the business.

Cost Structure Optimization:

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

In April 2023, we formed two strategic partnerships (described

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

Inventory Management:

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

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

Sales Force Upgrade:

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

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

Product Innovation:

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

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

Capital Investment:

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

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

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

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

capital into its highest demand and highest potential product lines.

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

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

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

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

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

cost structure, enhance our margins and further support our facilities consolidation initiatives while also servicing and providing solutions

to our customers.

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

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

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

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

As part of the Vape Partnership, we will

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

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

If our Vape Partner and key customer(s) enter

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

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

In exchange we would

earn quarterly and annual commission payments from our strategic partners.

While the strategic partnerships may result in a decrease

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

should allow us to reduce our overall cost-structure and enhance our margins and convert millions of dollars of existing inventory back

into cash, thereby improving our balance sheet.

May 6, 2024, the Company, Warehouse Goods and Synergy Imports LLC (“Synergy”) entered into an asset purchase agreement,

dated May 1, 2024 (the “Asset Purchase Agreement”) pursuant to which Synergy purchased all of the intellectual property,

a specified amount of inventory, and other assets related to the Eyce and DaVinci brands.

In consideration for the acquisition, all

parties entered into a loan modification agreement, effective May 1, 2024 (the “Loan Modification Agreement”) and an

amended and restated secured promissory note, effective May 1, 2024 (the Amended and Restated Secured Promissory Note”), an

amendment to the original Eyce and Davinci Asset Purchase Agreements, a distribution agreement, the termination of a license granted

by Eyce, and the termination of certain consulting and employment agreements.

The Loan Modification Agreement was restructured on

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

PACT Act Exemption

January 11, 2022, we announced via press release that the United States Postal Service (the “USPS”) had approved our application

for a business and regulatory exemption to the PACT Act (with respect to the business and regulatory exemption granted by the USPS, the

“PACT Act Exemption”), allowing us to ship vaporizers and accessories classified as electronic nicotine delivery systems

(“ENDS”) products to other compliant businesses.

With this approval, over 97% of our total annual sales became eligible for

shipment by freight, USPS and other major parcel carriers.

The PACT Act Exemption also enables us to partner with other businesses that

ship ENDS products and had their supply chains disrupted by PACT Act compliance.

June 24, 2022, we provided via press release an update on the progress of the PACT Act Exemption, following our successful implementation

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

We currently possess the

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

customer experience for approved wholesale customers.

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

(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 10 shares of common stock issued and outstanding were converted into one share of common stock.

We paid cash in lieu of fractional

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

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

that took place on July 29, 2024, the adoption of the 2024 Amendment to effect a reverse stock split of our Common Stock at any whole

number between, and inclusive of, one-for-two to one-for-twenty.

Approval of the Proposed 2024 Reverse Stock Split at the 2024 Special

Meeting granted the Board the authority, but not the obligation, to file the 2024 Amendment to effect the Proposed 2024 Reverse Stock

Split no later than August 5, 2024, with the exact ratio and timing of the Proposed 2024 Reverse Stock Split to be determined at the

discretion of the Board.

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

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

of trading on the Nasdaq.

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

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

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

All outstanding

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 Second Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted.

10 — Compensation Plans” for more information.

share and per share amounts in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024 have been retroactively adjusted

for all periods presented to give effect to the Reverse Stock Split.

Business Transformation Overview

year 2025 represents a significant strategic transition for the Company, as it shifted its primary capital allocation focus from wholesale

and distribution operations to a digital asset treasury strategy centered on BERA.

Historically,

operating results were driven by warehouse-based wholesale and direct-to-consumer sales.

During 2025, the Company materially reduced

that legacy footprint, substantially exited warehouse inventory, and transitioned the remaining commerce business to an asset-light,

drop-ship model.

While the Company continues to operate a scaled-down wholesale / distribution business, its financial profile is increasingly

influenced by digital asset activity.

During 2025, the Company completed a reverse stock split to maintain compliance with Nasdaq listing requirements.

All share and per share amounts presented herein reflect the impact of the reverse stock split for all periods presented.

the fourth quarter of 2025, the Company completed a private placement with digital asset-focused investors.

Transaction consideration consisted

of cash, U.S.

dollar-denominated stablecoins, and BERA, and the transaction established the capital base for the Company’s digital

asset treasury strategy while also supporting residual legacy operations.

a result, period-over-period comparability is impacted by both the decline in legacy operating activity and the introduction of fair

value accounting for digital assets.

Greenlane Holdings, Inc.

is a publicly traded digital asset treasury company

with a digital asset treasury strategy focused on the acquisition, management, and strategic deployment of BERA,

the native token of the Berachain blockchain network.

of December 31, 2025, a substantial majority of the Company’s balance sheet consisted of digital assets and U.S.

dollar cash and

dollar-pegged stablecoins, which are classified within cash and cash equivalents on the consolidate balance sheets.

The Company’s

financial condition, liquidity profile, and results of operations are therefore significantly influenced by digital asset market conditions,

including the fair value of its BERA holdings.

addition to our digital asset treasury activities, the Company continues to operate a legacy lifestyle accessories commerce platform

through vapor.com and related channels.

Following the strategic transition in 2025, the legacy business was materially reduced in scale,

warehouse operations were substantially exited, and the operating model shifted to an asset-light drop-ship structure.

Transformation

Greenlane historically operated as a distributor of lifestyle accessories

and consumer products.

Beginning in October 2025, management executed a strategic transformation following the closing of a $110.7 million

private investment in public equity transaction led by crypto-native investors and supported by the Berachain Foundation (the “BERA

Private Placement”).

The BERA Private Placement provided the capital foundation for the

BERA Strategy.

In connection with the transaction:

● The Company received cash and stablecoin proceeds and BERA tokens.

The Board was reconstituted to include digital asset and capital markets expertise.

● A Digital Assets Committee was formed to oversee treasury strategy and risk management.

● The Company adopted a capital allocation model centered on BERA accumulation and deployment.

transformation shifted the Company’s principal activity from a predominately operating distribution infrastructure to managing

a digital asset treasury strategy.

As of December 31, 2025, the Company no longer maintained warehouse inventory and had

transitioned the remaining commerce business to a drop-ship operating model.

The BERA Strategy

The Company has implemented a Treasury Policy that sets guidelines for

digital asset diversification, liquidity, and risk management, and is overseen by the Board’s Digital Asset Committee.

The Company’s

digital asset treasury strategy, subject to these guidelines, consists of five core components:

Capital Deployment

The Company seeks to deploy capital raised through equity offerings and other transactions to acquire BERA

through open market purchases or negotiated transactions.

Capital deployment is governed by a disciplined strategy aimed at increasing

long-term BERA-per-share.

Network Participation

The Company participates in Berachain’s Proof of Liquidity (“PoL”) consensus

mechanism through staking and validator infrastructure.

These activities may generate staking rewards denominated in BERA, which are variable

and not guaranteed.

Governance Participation

Through ongoing participation

in the Berachain ecosystem, the Company may earn Berachain Governance Token (“BGT”), a non-transferable governance token.

BGT may provide governance influence within the ecosystem, subject to protocol rules.

The Company does not control protocol governance

and cannot assure that BGT will confer any anticipated influence or economic benefit.

Risk-Adjusted Yield Participation

The Company may selectively

deploy BERA or stablecoins into decentralized finance (“DeFi”) protocols within the Berachain ecosystem, subject to internal risk controls.

Such activities involve

smart contract risk, liquidity risk, counterparty risk, and regulatory uncertainty.

Capital Allocation Discipline

The Company may pursue strategic initiatives aligned with its digital asset

treasury model, including validator partnerships, infrastructure investments, and capital markets transactions intended to enhance net

asset value per share.

There can be no assurance that such initiatives will generate positive returns.

and the Berachain Ecosystem

is a decentralized, open-source, EVM-compatible layer-1 blockchain engineered for high throughput, low latency, and

full compatibility with Ethereum tooling, smart contracts, and infrastructure.

Berachain utilizes a novel proof of liquidity consensus

mechanism (“PoL”) that integrates network security with active liquidity provisioning.

BERA is the native digital asset of

the Berachain network and is used for transaction fees, staking, validator participation, and ecosystem incentives.

is not legal tender, is not backed by any government or central bank, and may be subject to significant price volatility, regulatory

uncertainty, and technological risk.

Berachain ecosystem includes decentralized exchanges, lending protocols, liquidity pools, validator infrastructure providers, and governance

The Company does not control the Berachain protocol, validator selection outcomes, or governance decisions.

Protocol parameters,

incentive structures, and token mechanics may change over time.

Company’s strategy assumes continued ecosystem development and network adoption.

There can be no assurance that the Berachain ecosystem

will achieve sustained adoption or that the PoL mechanism will perform as intended.

Holdings and Liquidity

The Company’s liquidity

is primarily derived from cash and cash equivalents on hand and is supplemented by digital asset holdings, which are subject to market

volatility and liquidity constraints.

As of December 31, 2025, the Company’s treasury holdings consisted

of BERA, cash, and U.S.

dollar-denominated stablecoins.

Stablecoins that are readily convertible into U.S.

dollars are classified

as cash equivalents.

Stablecoins deployed into DeFi protocols are not classified as cash equivalents.

In connection with the

October 2025 PIPE transaction, the Company agreed to certain contractual transfer restrictions on a portion of its BERA holdings.

of December 31, 2025, while these contractual provisions were in place, no operational lockup mechanism had been implemented, and

the Company retained the ability to utilize such BERA, including for staking activities.

An operational lockup mechanism was

implemented in mid-February 2026, with restrictions scheduled to expire on April 23, 2026.

Management concluded that, as of December

31, 2025, these contractual provisions did not impact the fair value measurement or classification of the Company’s BERA

Distribution Business

Company’s legacy business consists of lifestyle accessories and consumer products historically distributed through wholesale and

direct-to-consumer channels.

from the legacy segment declined significantly during fiscal 2025 and is expected to represent a decreasing proportion of overall Company

The legacy business is currently

managed to preserve liquidity and fulfill contractual obligations.

The Company does not currently

prioritize expansion of this segment.

As of December 31, 2025, the Company no longer maintained warehouse inventory and had transitioned

the remaining business to a drop-ship operating model supported by its existing e-commerce platform, vapor.com.

Considerations

regulatory framework for digital assets remains evolving and uncertain.

For a discussion of the risks related to digital assets and the

Company’s operations, see “Risk Factors” in Section 1.A of this Form 10-K.

The Company’s legacy business

continues to be subject to federal, state, and local regulation governing consumer products, vaporization devices, and related accessories.

June 26, 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 (1-for-750) 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 26, 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.

2025 Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

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 2025 Reverse Stock Split, as required by the terms of each

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

appropriately adjusted.

See “Note 10 — Stockholders’ Equity” for more information.

25, 2026, the Company’s stockholders approved an amendment to the Company’s amended and restated certificate of incorporation

to effect a reverse stock split of the Company’s issued and outstanding common stock at a ratio within a range of 1-for-5 to 1-for-15,

with the final ratio and timing to be determined at the discretion of the Company’s Board of Directors (the “2026 Reverse

Stock Split”).

The Company expects to effect the reverse stock split shortly following this issuance of this Annual Report.

All share and per share amounts

in the Company’s consolidated financial statements, notes thereto and this Annual Report have been retroactively adjusted for all

periods presented to give effect to the 2025 Reverse Stock Split, including reclassifying an amount equal to the reduction in par value

of Common Stock to additional paid-in capital.

As of the issuance date of these financial statements, the 2026 Reverse Stock Split has

not been effected.

Accordingly, the Company’s financial statements, including share and per share amounts, and the figures appearing

in this Annual Report have not been adjusted to reflect the 2026 Reverse Stock Split.

Accounting Estimates

12 unchanged sentences

of our consolidated financial statements.

December 2023, the FASB issued ASU 2023-08 (ASC 350-60) requiring in-scope crypto assets to be measured at fair value with changes in

net income and presented separately, with enhanced disclosures under ASC 820.

The standard is effective for fiscal years beginning after

December 15, 2024, including interim periods.

We adopted the standard effective January 1, 2025.

Beginning in the fourth quarter

of 2025, we provide ASC 820 hierarchy, valuation, and sensitivity disclosures, together with custody and pricing-control updates.

Fair value measurement of digital assets

Beginning in Q4 2025, crypto

assets within the scope of ASU 2023-08 are measured at fair value with changes recognized in earnings.

The Company primarily uses quoted

prices in active markets for identical assets when available (Level 1 inputs).

When such prices are not available, the Company utilizes

observable market data from secondary sources, including pricing aggregators and broker quotes (Level 2 inputs).

Management applies judgment

in determining the principal market and evaluates the reliability of pricing sources, including volume, accessibility, and consistency

across exchanges.

In periods of market dislocation or limited liquidity, alternative valuation approaches may be applied.

in these assumptions could materially impact reported fair values and results of operations.

The Company also maintains

supporting schedules of significant crypto assets and performs daily to monthly reconciliations between wallet activity and the general

Stablecoins held in Company-controlled wallets that are readily convertible to U.S.

dollars are classified as cash equivalents

based on management’s assessment of their high liquidity, short term nature, and minimal risk of changes in value.

This classification

reflects the Company’s conclusion that such holdings are economically equivalent to cash and are used in treasury management activities.

The Company evaluates counterparty risk, redemption mechanisms, and market liquidity in determining this classification.

Stablecoins deployed

into decentralized finance (DeFi) protocols are not classified as cash equivalents and are presented separately based on their use and

risk profile.

As of December 31, 2025, the

Company held approximately $22.6 million in U.S.

dollar-denominated stablecoins, classified as cash equivalents, representing a significant

component of the Company’s near-term liquidity and treasury management framework.

Digital asset fair value adjustments

are non-cash and may significantly impact reported net income independent of operating performance of the wholesale and distribution segment.

consisting of finished products, are primarily accounted for using the weighted-average method, and are valued at the lower of cost and

4 unchanged sentences

uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future.

evaluated whether the reduction of the legacy commerce business and the exit of warehouse operations qualified for discontinued operations

presentation under ASC 205-20 and concluded that discontinued operations treatment was not appropriate because the Company continues

to operate vapor.com and related commerce activities.

During 2025, the Company fully impaired its remaining inventory to reflect reduced

demand and warehouse exit.

Company accounts for stock-based compensation under ASC 718.

Expense is recognized over vesting periods and may fluctuate based on equity

issuance timing and fair value assumptions.

Taxes and TRA Liability

are a corporation subject to income taxes in the United States.

Certain subsidiaries of the Operating Company are taxable separately

Our proportional share of the Operating Company’s subsidiaries’ provisions are included in our consolidated financial

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

As a result, beginning

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

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

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 operations.

If we 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.

evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns

to identify uncertain tax positions.

Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process

in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits

of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit

that is more than 50 percent likely to be realized is recognized.

Interest and penalties related to unrecognized tax benefits are recorded

in income tax benefit.

We have no uncertain tax positions that qualify for inclusion in our consolidated financial statements.

addition to tax expenses, we may incur expenses related to our operations and may be required to make payments under the Tax Receivable

Agreement (the “TRA”), which could be significant.

Pursuant to the Greenlane Operating Agreement, Greenlane Holdings, LLC

will generally make pro rata tax distributions to its members in an amount sufficient to fund all or part of their tax obligations with

respect to the taxable income of Greenlane Holdings, LLC that is allocated to them and possibly in excess of such amount.

are a corporation subject to U.S.

federal and state income taxes.

Certain of our subsidiaries are subject to tax in their respective

jurisdictions, and their results are included in our consolidated financial statements.

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

Beginning in 2023, 100%

of the Operating Company’s U.S.

taxable income and losses are included in our U.S.

federal and state income tax returns.

income tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial statement

carrying amounts and the tax bases of assets and liabilities.

These amounts are measured using enacted tax rates expected to apply in

the periods in which such differences are anticipated to reverse.

A valuation allowance is recorded when it is more likely than not that

some portion or all of the deferred tax assets will not be realized.

In assessing realizability, we consider all available evidence,

including the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent

operating results.

evaluate tax positions taken, or expected to be taken, in income tax returns to determine whether they meet the more-likely-than-not

recognition threshold.

For positions that meet this threshold, we recognize the largest amount of tax benefit that is more than 50% likely

to be realized.

Interest and penalties related to unrecognized tax benefits are recorded within income tax expense.

As of the reporting

date, we have no material uncertain tax positions requiring recognition in the consolidated financial statements.

addition to income taxes, we may be required to make payments under the Tax Receivable Agreement (TRA).

Under the Operating Agreement,

Greenlane Holdings, LLC may make pro rata tax distributions to its members to fund their tax liabilities arising from allocated taxable

Such distributions may, in certain cases, exceed the related tax liabilities.

Contingencies

22 unchanged sentences

II, Item 8 of this Form 10-K.

year 2025 represented a year of strategic transformation for the Company.

Historically operating as a lifestyle accessories distributor,

the Company shifted its primary focus in October 2025 to a digital asset treasury strategy focused on BERA, the native token of the Berachain

blockchain network.

of December 31, 2025:

A substantial majority of total assets consisted of digital assets and cash equivalents.

● The implementation of the BERA Strategy resulted in a significant investment in digital assets.

The legacy distribution business had materially declined in scale.

The Company no longer maintained warehouse inventory and had transitioned

the remaining business to an asset-light, e-commerce drop-ship operating model.

Significant inventory write-downs and restructuring charges were recorded.

Results of operations were materially impacted by unrealized fair value adjustments related to digital assets.

year-over-year comparisons reflect both operating changes and structural transformation.

of Operations

3 unchanged sentences

% of Net sales

Cost of sales

Cost of revenue

Gross (loss) profit

Operating expenses:

Salaries, benefits and payroll taxes

Stock based compensation – strategic advisory warrants

General and administrative

Restructuring expenses

Impairment of property and equipment

5 unchanged sentences

Change in fair value of contingent consideration

Change in fair value of digital assets

Loss on extinguishment of debt

Other expense, net

Total other expense, net

Total other income (expense), net

Loss before income taxes

(Benefit from) provision for income taxes

Net loss attributable to non-control interest

Provision for income taxes

Net loss attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

Results of Operations

Asset Activity

in October 2025, the Company transitioned to a digital asset treasury following a $110.7 million private investment in public equity

transaction , which included BERA, the principal token of the Berachain ecosystem, stablecoins and cash (the “BERA

Private Placement”).

During the remainder of 2025, the Company deployed a portion of its cash balances to acquire BERA in the

the fourth quarter of 2025, digital asset markets experienced broad-based declines, adversely affecting all major cryptocurrencies.

Company’s holdings in BERA, a less established digital asset, were particularly volatile and experienced larger relative declines

compared with more widely traded cryptocurrencies such as Bitcoin and Ethereum.

for fiscal year 2025, the Company recorded:

$31.1 million in unrealized losses on digital assets;

$0.2 million in staking rewards.

Distribution Operations

reorganization of the sales team and the challenges in recruiting personnel in 2025 negatively affected sales in the first half of the

During the second half of 2025, the Company transitioned from an inventory-based warehouse model to an asset-light, drop ship model

supported by its existing e-commerce platform.

As a result, f or

fiscal year 2025:

Net revenue decreased $8.9 million or (67%) compared to 2024

Gross margin was impacted by $6.3 million in inventory impairment write-downs

Operating expenses were reduced through headcount and infrastructure reduction

the year ended December 31, 2025, total net sales were approximately $4.4 million, compared to approximately $13.3 million for the year

ended December 31, 2024, representing a decrease of $8.9 million, or 67%.

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

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

transitioning much of this business from

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

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

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

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

The consumer products were affected by the inability to access

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

The Company is continuing to

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

Concurrently, the Company has continued

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

and marketing costs and reduce or eliminate certain administrative functions.

of Sales and Gross Margin

the year ended December 31, 2024, cost of sales decreased by $40.6 million, or 85.3%, as compared to the year ended December 31, 2023.

The decrease in cost of sales is aligned with the decrease in revenue of 79.7%.

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

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

with 100% margin versus gross revenue with lower margins.

The decrease was attributable primarily to the reorganization

of the sales team and challenges in higher-performing personnel, which adversely affected sales in the first half of 2025.

In the second

half of the year, revenue was further impacted by the substantial reduction of legacy warehouse-based operations and the Company’s

transition to a drop-ship fulfilment model.

of Revenue and Gross Profit (Loss) Profit

the year ended December 31, 2025, cost of sales increased by $9.8 million, or 141%, as compared to the year ended December 31, 2024.

The increase was primarily attributable to a $6.3 million inventory reserve recorded following a comprehensive review of inventory aging

and realizability in connection with the Company’s transition to an asset-light, e-commerce operating model.

In addition, costs

associated with the wind-down of legacy warehouse-based operations also contributed to the increase.

loss decreased significantly, to approximately $(12.5 million) for the year ended December 31, 2025 compared to approximately $6.3 million for

the year ended December 31, 2024, driven by the increase in cost of sales described above, together with the 67% reduction in net revenue.

Benefits and Payroll Taxes

benefits and payroll taxes expenses decreased by approximately $10.1 million, or 57.7%, to $7.4 million for the year ended December 31,

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

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

and Administrative Expenses

and administrative expenses decreased by approximately $14.4 million, or 59.7 %, for the year ended December

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

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

The Company focused on reduction

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

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

Salaries, benefits and payroll taxes expenses increased by approximately

$2.6 million, or 35%, to $9.9 million for the year ended December 31, 2025, compared to $7.4 million for the same period in 2024.

increase was primarily driven by an increase of approximately $4.8 million in stock-based compensation expense related to employee and

director equity awards, partially offset by a $2.3 million decrease associated with workforce reductions as part of the Company’s

restructuring initiatives.

Stock based compensation – strategic

advisory warrants

Stock-based compensation –

strategic advisory warrants was approximately $18.6 million for the year ended December 31, 2025, compared to $0 for the year ended December

31, 2024, representing an increase of approximately $18.6 million.

The increase is attributable to warrants issued in connection with

with the October 2025 PIPE.

These awards were accounted for under ASC 718 and were recognized at

grant date based on the fair value of the warrants.

As a result, the expense is non-cash in nature and is presented separately within

operating expenses.

General and Administrative Expenses

General and administrative

expenses increased to approximately $10.6 million for the year ended December 31, 2025, from approximately $9.8 million for the year ended

December 31, 2024, an increase of approximately $0.9 million, or 9%.

This increase was primarily driven by higher professional and outside

services, facility-related costs, outbound freight, marketing, and general insurance expenses.

advisory warrants were accounted for as equity-based compensation under ASC 718 and ASC 505-50.

A substantial portion of the awards was

recognized immediately at grant due to the absence of a substantive service period, while a smaller portion is being recognized over

the related service period.

the impact of advisory warrant-related stock-based compensation, the increase in general and administrative expenses was driven by higher

professional and outside services, facility expenses, outbound freight, marketing, and general insurance costs.

Restructuring

and transformation costs were $1.5 million for the year ended December 31, 2025, driven primarily by personnel actions associated with

the Company’s cost reduction initiatives and its strategic transition to a crypto treasury model, together with a $1.0 million

termination payment to the Company’s former Chief Executive Officer.

of property and equipment

of property and equipment increased $0.5 million, for the year ended December 31, 2025, compared to the same period in 2024.

was primarily attributable to the write-off of certain fixed assets in connection with the Company’s change in operating strategy

and the termination of warehouse operations.

and Amortization Expense

and amortization expense decreased $1.4 million ,

or 64.4% , for the year ended December 31, 2024 ,

compared to the same period in 2023 .

The decrease is related to a major restructuring

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

office footprint.

Impairment of property and equipment

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

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

and amortization expense decreased $0.3 million, or 38%, for the year ended December 31, 2025, compared to the same period in 2024.

decreased due to the impairment of fixed assets noted above.

Income (Expense), Net

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

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

expense decreased approximately $5.5 million for the year ended December 31, 2025, compared to the same period in 2024.

is attributable to the reduction in the Company’s overall debt, which was fully repaid in February 2025.

in fair value of contingent consideration

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

the same period in 2023.

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

change in fair value of contingent consideration decreased $1.0 million for the year ended December 31, 2025 compared to the prior year.

The prior year included a one-time reduction in estimated earnout liabilities associated with the Davinci and Eyce product lines.

in fair value of digital assets

assets consisted primarily of BERA held in the Company’s digital treasury.

These assets are remeasured to fair value at the end

of each reporting period, with changes recognized in earnings.

For the year ended December 31, 2025, the Company recognized a fair value

loss of approximately $31.1 million driven by market fluctuations in BERA.

As of December 31, 2025, the fair value of digital assets

on the consolidated balance sheet was $36.6 million.

The Company may also deploy portions of its BERA holdings in staking or other permitted

treasury activities from time to time.

on debt extinguishment

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

same period in 2023.

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

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

of this Form 10-K.

expense, net.

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

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

Sales by Geographic Regions

Year Ended December 31,

% of Net sales

United States

Total net sales

the year ended December 31, 2024, our United States net sales to customers in the United States were approximately $10,9 million, compared

to approximately $58.5 million for the same period in 2023 ,

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

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

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

the same period in 2023 ,

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

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

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

the same period in 2023 ,

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

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

Capital Resources and Going Concern

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

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.

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

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

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

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

The repatriation of cash balances

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

however, these balances are generally

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

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

fundraisings will be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and

other liquidity requirements associated with our existing operations, for the next 12 months.

Based on our cash on hand and working

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

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

See Note 13 for more

primary requirements for liquidity and capital are working capital, equity fundraising, debt service related to recent acquisitions

and general corporate needs.

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our

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

described and defined below.

Program and Shelf Registration Statement

formerly used a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) to conduct securities offerings.

In August 2021, we filed a prospectus supplement and established an “at-the-market” equity offering program (the “ATM

Program”) that provided for the sale of shares of our Class A common stock having an aggregate offering price of up to $50 million,

from time to time.

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

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

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

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

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

Stock and Warrant Offerings

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

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

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

“July 2023 Standard Warrants”).

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

2023 Offering”).

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

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

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

investor for aggregate gross cash proceeds of $6.5 million.

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

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

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

the pre-funded warrant exercise price of $0.001.

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

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

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

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

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

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

indebtedness by approximately $617,000.

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

In connection

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

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

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

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

The Exchange Inducement Warrants

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

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

The Exchange Inducement Warrants are initially

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

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

exercised for cash during such inducement period.

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

to $1.19 per share.

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

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

and certain other conditions.

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

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

The Cobra Note was repaid out of the February 2025

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

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

per Common Unit.

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

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

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

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

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

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

The Series A Warrants are exercisable following

stockholder approval and expire five (5) years thereafter.

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

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

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

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

The Series B Warrants are exercisable following stockholder approval

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

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

as described in the Series B Warrant.

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

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

Under such Exchange Agreement,

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

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

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

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

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

2 to the Loan Agreement,

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

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

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

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

outstanding under the terms of the Loan Agreement.

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

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

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

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

a third-party institutional investor pursuant to which the investor purchased, for approximately $4.85 million in cash, an economic participation

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

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

Receivables Financings

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

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

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

See “Note 6 - Long Term Debt” for more

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

As of December 31, 2024,

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

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

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

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

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

The new Maturity Date will be October 29, 2025.

In consideration for the extension,

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

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

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

identical to the Exchange Warrants.

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

have completed several initiatives to optimize our working capital requirements.

We launched Groove, a new, innovative Greenlane Brands

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

working capital requirements.

April 2023, we entered into two strategic.

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

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

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

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

As part of the Vape Partnership,

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

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

If our Vape Partner and key customer(s) enter

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

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

In exchange we would

earn quarterly and annual commission payments from our strategic partners.

While the strategic partnerships may result in a decrease

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

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

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

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

We have reduced our

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

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

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

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

The recent macroeconomic

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

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

our operations will be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and

other liquidity requirements associated with our existing operations, for the next 12 months.

The Company’s ability to continue

as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve

the Company’s liquidity and profitability, which includes, without limitation:

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

Increasing revenue by introducing new products and acquiring new customers.

Execute on strategic partnerships accretive to margins and operating cash

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

opinions concerning liquidity are based on currently available information.

To the extent this information proves to be inaccurate, or

if circumstances change, future availability of trade credit or other sources of financing may be reduced and our liquidity could be

adversely affected.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those

described in the section titled “Risk Factors” in Item 1A of this Annual Report on Form 10-K for the year ended December

Depending on the severity and direct impact of these factors on us, we may be unable

to secure additional financing to meet our operating requirements on terms favorable to us, or at all.

of December 31, 2024 ,

we did not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial

condition, results of operations, liquidity, capital expenditures, or capital resources.

the year ended December 31, 2024, the Company reported a non-recurring loss on debt extinguishment of approximately $0.9 million attributable

to the October 29, 2024 debt restructuring.

For further information, see Note 6, “Debt” of the Notes to Consolidated Financial

Statements in Part II, Item 8 of this Form 10-K.

and Capital Resources

of December 31, 2025, the Company had approximately $32.5 million of cash and cash equivalents, $36.6 million in digital asset holdings

(BERA), and working capital of approximately $28.9 million, compared to $0.9 million of cash and cash equivalents and working capital

of approximately $1.6 million as of December 31, 2024.

increase in working capital reflects proceeds from the October 2025 private placement and the Company’s transition away from legacy

warehouse operations.

Company’s primary sources of liquidity are cash and cash equivalents, as well as proceeds from equity issuances.

While digital

assets represent a significant portion of total assets, the Company primarily relies on cash and cash equivalents to meet near-term operating

assets are subject to price volatility and market liquidity constraints, which may impact the Company’s ability to convert such

assets into cash at expected values or within desired timeframes.

Company has no outstanding debt as of December 31, 2025.

The Company may opportunistically access capital markets, including through

its at-the-market (“ATM”) program, but is not dependent on additional financing to meet its near-term obligations.

Company’s contractual obligations are primarily limited to short-term vendor arrangements and are not material individually or

in the aggregate.

Company’s liquidity may be impacted by fluctuations in digital asset prices, timing of capital deployment, and other risks described

in “Risk Factors.”

January 7, 2026, the Company entered into a Sales Agreement (the “Sales Agreement”) with Yorkville Securities, LLC (“Yorkville”)

pursuant to which the Company may, from time to time, offer and sell shares of its Class A common stock through or to Yorkville, acting

as sales agent or principal (the “ATM Offering”).

On January 7, 2026, the Company filed a prospectus supplement in connection

with the ATM Offering for up to $5,355,687 of shares of Common Stock.

As of the date of this Annual Report, the Company has not made

any sales under the ATM Offering.

has evaluated the Company’s ability to continue as a going concern in accordance with ASC 205-40.

Based on the Company’s

current cash position, cash equivalents, digital asset holdings, and expected operating cash flows, management believes that there is

no substantial doubt about the Company’s ability to continue as a going concern for at least the next twelve months from the date

of issuance of these financial statements.

on cash and cash equivalents on hand, including proceeds from the October 2025 private placement, management believes the Company has

sufficient liquidity to fund its working capital requirements and operating obligations for at least the next twelve months.

Company’s focus is executing its digital asset treasury strategy, maintaining liquidity, and aligning operating costs with its

reduced legacy footprint.

The Company may seek additional capital opportunistically depending on market conditions and strategic priorities.

of December 31, 2025, the Company did not have any off-balance sheet arrangements that are reasonably likely to have a material effect

on its financial condition, results of operations, or liquidity.

following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included in Part

3 unchanged sentences

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) financing activities

Cash Used in Operating Activities

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

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

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

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

$2.3 million.

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

adjustments to net loss of $6.5 million, including a $24.0 million increase in cash provided by working capital primarily driven by decreases

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

Cash (Used In) Provided by Investing Activities

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

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

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

for our new enterprise resource planning system.

Cash Provided by (Used in) Financing Activities

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

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

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

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

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

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

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

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

million payoff of asset based lending loans.

Net cash used in investing activities

Net cash provided by financing activities

Net cash used in operating

activities was approximately $16.3 million for the year ended December 31, 2025, compared to approximately $6.8 million for the year ended

December 31, 2024, representing an increase in cash usage of approximately $9.5 million, or 141%.

The increase was primarily driven by

changes in working capital, including the wind-down of legacy operations, as well as the timing of payments to vendors and service providers.

These cash outflows were partially offset by non-cash items, including stock-based compensation and changes in the fair value of digital

assets, which do not impact operating cash flows.

Net cash used in investing

activities was approximately $8.3 million for the year ended December 31, 2025, compared to approximately $0.2 million for the year ended

December 31, 2024, representing an increase in cash usage of approximately $8.0 million, or approximately 3,285%.

The increase was primarily

attributable to cash-funded purchases of digital assets as part of the Company’s treasury strategy, as well as purchases of property

and equipment.

Digital assets acquired in connection with the October 2025 private placement were non-cash in nature and are disclosed

as supplemental non-cash investing and financing activity.

Net cash provided by financing

activities was approximately $56.1 million for the year ended December 31, 2025, compared to approximately $7.4 million for the year ended

December 31, 2024, representing an increase of approximately $48.7 million, or 656%.

The increase was primarily driven by proceeds from

the October 2025 private placement and other equity-related transactions.

A portion of the consideration received in connection with the

private placement consisted of digital assets, which are non-cash in nature and are disclosed separately as supplemental non-cash investing

and financing activity.

Digital Asset Holdings and Indicative Net Asset

As part of its digital asset treasury

strategy, the Company monitors the aggregate fair value of its digital asset holdings.

As of December 31, 2025, the Company

held digital assets with an approximate fair value of $36.6 million.

In addition, the Company held cash and cash equivalents, including

stablecoins, of approximately $22.6 million, and had total liabilities of approximately $7.2 million.

Based on these amounts, the Company’s

indicative net asset value was approximately $63.0 million, or approximately $13.04 per share, based on 4,829,563 shares of Class A common

stock outstanding as of December 31, 2025.

This metric is presented for informational

purposes only and does not represent a measure of financial performance under U.S.

It is derived from amounts that are based on

different measurement attributes, including fair value and historical cost, and therefore may not be comparable to similarly titled measures

presented by other companies.

The fair value of digital assets is subject to significant market volatility, and such values may differ

materially from subsequent periods.

Accordingly, this measure should not be considered a substitute for, or superior to, financial information

prepared in accordance with U.S.

Management monitors the value

of its digital asset holdings relative to market capitalization as an internal metric;

however, such measures are not presented as formal

financial metrics and are subject to significant variability.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis