What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 813 added, 1006 removed, 221 unchanged (89% of the section changed)

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thousands, except share and per share amounts)

September 30, 2025

March 31, 2026

December 31, 2025

Current assets

Accounts receivable, net of allowance of $ 3,383 and $ 2,616 at September 30, 2025 and December 31, 2024, respectively

Inventories, net

Vendor deposits

Other current assets

Cash and cash equivalents

Accounts receivable, net of allowance of $ 89 and $ 1,511 at March 31, 2026 and December 31, 2025, respectively

Digital asset loan receivable

Stablecoin-related protocol instruments

Other current assets (Note 6)

Total current assets

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Operating lease right-of-use assets

Digital assets – BERA & BERA-equivalents

Current liabilities

Accounts payable

Accrued expenses and other current liabilities

Customer deposits

Current portion of notes payable

Accrued expenses and other current liabilities (Note 6)

Current portion of operating leases

Total current liabilities

Operating leases, less current portion

Total liabilities

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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 *

Class A common stock, $ 0.01

par value per share, 1,800,000,000

shares authorized, 629,946 and 603,696

shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively *

Class B common stock, $ 0.0001

par value per share, 30,000,000

shares authorized, and 0

shares issued and outstanding as of March 31, 2026 and December 31, 2025 *

Common stock, value

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Total liabilities and stockholders’ equity

After giving effect to

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

giving effect to the Reverse Stock Splits - See Note 8 - Stockholders’ Equity.

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

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thousands, except share and per share amounts)

Three months ended September 30,

Nine months ended September 30,

Three Months Ended March 31,

Cost of sales

Gross profit (loss)

Operating expenses:

Salaries, benefits and payroll taxes

Stock based compensation – strategic advisory warrants

General and administrative

Restructuring expenses

Depreciation and amortization

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Other income (expense), net:

Interest expense

Change in fair value of contingent consideration

Gain on extinguishment of debt

Interest income (expense), net

Change in fair value of digital assets

Other income (expense), net

Total other income (expense), net

Total other expense, net

Loss before income taxes

Provision for (benefit from) income taxes

Net income (loss) attributable to non-controlling interest

Provision for income taxes

Net income attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

Net loss attributable to Class A common stock per share - basic and diluted (Note 8)*

$ ( 5,484.67 )

$ ( 12,044.84 )

Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 8)*

Other comprehensive income attributable to Greenlane Holdings, Inc.:

Reclassification adjustment for accumulated foreign currency

translation gain included in net loss

Other comprehensive income (loss)

Foreign currency translation adjustments

Comprehensive loss

Comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Greenlane Holdings, Inc.

After giving effect to

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

giving effect to the Reverse Stock Splits - See Note 8 - Stockholders’ Equity.

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

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thousands, except share amounts)

Income (Loss)

Class A Common Stock

Accumulated Other Comprehensive

Non- Controlling

Total Stockholders’

Comprehensive

Stockholders’

Income (Loss)

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$ ( 360,509 )

Exercise of Class A warrants

Issuance of Class A shares and warrants

Balance March 31, 2025

$ ( 278,796 )

Exercise of pre-funded warrants

Issuance of Class A shares

Balance June 30, 2025

$ ( 282,011 )

Balance September 30, 2025

$ ( 290,944 )

After giving effect to

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

Class A Common Stock

Accumulated Other Comprehensive

Non- Controlling

Total Stockholders’

Income (Loss)

Balance December 31, 2023

$ ( 257,289 )

Equity-based compensation

Issuance of Class A shares - (Note 9)

Other comprehensive income

Strategic advisory warrants

Reclassification of accumulated foreign currency translation gain

Balance March 31, 2026

$ ( 378,869 )

Issuance of Class A shares - (Note 9)

Other comprehensive income

Balance June 30, 2024

Comprehensive

Stockholders’

Income (Loss)

Balance December 31, 2024

$ ( 274,929 )

Issuance of Class A shares – (Note 9)

Issuance of Class A shares

Other comprehensive income

Balance September 30, 2024

Exercise of Class A warrants

Issuance of Class A shares and warrants

Balance March 31, 2025

$ ( 278,796 )

After giving effect to

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

giving effect to the Reverse Stock Splits - See Note 8 - Stockholders’ Equity.

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities:

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

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

Depreciation and amortization

Equity-based compensation expense

Change in fair value of contingent consideration

Strategic advisory warrants

Stock-based compensation

Realized foreign currency gain

Non-cash staking revenue

Write-off vendor deposits and accrued liabilities

Change in fair value of digital assets

Accretion of debt discount

Gain on extinguishment of debt

Change in provision for credit losses

Provision for doubtful accounts

Changes in operating assets and liabilities:

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Customer deposits

Net used in operating activities

Net cash and cash equivalents used in operating activities

Cash flows from Investing Activities:

Purchases of property and equipment, net

Net cash used in investing activities

Loan receivable (digital assets)

Purchases of digital assets

Purchases of stablecoin-related protocol instruments

Net cash and cash equivalents used in investing activities

Cash flows from Financing Activities:

Proceeds from issuance of Class A common stock and warrants

Proceeds from exercise of stock options, net of costs

Proceeds from notes payable

Payments on notes payable

Proceeds from future receivables financing

Repayments of loan against future accounts receivable

Net cash provided by financing activities

Effects of exchange rate changes on cash

Net increase in cash

Cash as of beginning of the period

Cash as of end of the period

Repayments of notes payable

Net cash and cash equivalents provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of the period

Cash and cash equivalents, end of period

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

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Cash paid for interest

Non-cash financing activities:

Extinguishment of debt in connection with Synergy asset purchase agreement

Cash paid during the period for income taxes

Non-cash investing activities and financing activities:

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

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the Three and Nine Months Ended September 30, 2025 and 2024

the Three Months Ended March 31, 2026 and 2025

BUSINESS OPERATIONS AND ORGANIZATION

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

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.

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

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

conduct our business through the Operating Company and its subsidiaries.

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

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

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.

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

The Up-C structure allows the Operating Company to continue

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

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

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

Additionally, because

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

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

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

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

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

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

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

other tax benefits attributable to payments made under the TRA.

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

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

their Common Units.

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

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

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

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

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

by the non-founder members of the Operating Company.

Company is focused on the acquisition, management, and strategic deployment of BERA, the native token of the Berachain blockchain network.

Through our digital asset treasury strategy, we may deploy capital into BERA acquisition, staking, validator participation, and selected

ecosystem-aligned activities, subject to risk management controls and Board oversight.

October 2025, the Company undertook a strategic transition from a traditional wholesale and distribution operating model to a digital

asset treasury strategy centered on BERA.

While the Company continues to operate a reduced-scale wholesale and distribution business,

our primary focus is digital asset treasury activities.

of March 31, 2026 and December 31, 2025, respectively, a substantial majority of our balance sheet consisted of BERA and U.S.

dollar cash and U.S.

dollar-denominated

Our financial condition, liquidity, and results of operations are therefore highly sensitive to digital asset market conditions

and the performance of the Berachain ecosystem.

Stablecoin-related instruments that are deployed into protocol or yield strategies are presented based on the nature

of the arrangement and are not classified as cash equivalents.

continue to operate a legacy wholesale and distribution business, which has been significantly reduced in scale and is managed for efficiency,

working capital minimization, and cash generation rather than growth.

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”),

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up to the next whole share, and accordingly, no fractional shares were issued in connection with the 2025 Reverse Stock Split.

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

On April 2, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation

with the Secretary of State of the State of Delaware to effect a one-for-eight reverse stock split of the Company’s issued and outstanding

shares of Class A common stock, par value $ 0.01 per share, effective April 6, 2026.

As a result of the reverse stock split, every eight

shares of Class A common stock issued and outstanding were automatically converted into one share of Class A common stock, without any

change in par value per share.

The reverse stock split did not change the authorized number of shares of Class A common stock.

No fractional

shares were issued in connection with the reverse stock split.

In lieu of fractional shares, stockholders otherwise entitled to receive

a fractional share received a cash payment equal to such fraction multiplied by the closing sales price of the Class A common stock as

reported on the Nasdaq Capital Market on the trading day immediately preceding the effective date of the reverse stock split.

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.

Class A common stock have been adjusted as a result of the Reverse Stock Splits, as required by the terms of each security.

The number of shares

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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

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

stock to additional paid-in capital.

and Going Concern

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.

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.

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.

revenue by introducing new products and acquiring new customers.

on strategic partnerships accretive to margins and operating cash

additional capital through the issuance of debt or equity securities.

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.

Stock and Warrant Offerings.

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.

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 .

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.

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

In connection with the Exchange, the Company issued

an aggregate of 1,683

five-year warrants with an exercise price of $ 2,280

per share (the “Exchange Warrants”).

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.

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.

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.

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.

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.

the nine months ended September 30, 2025 the Holders exercised all of the Series B warrants issued to them.

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

the “Future Receivables Financings”).

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

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

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

fees of approximately $ 2.8 million.

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

$ 0 during the October 29, 2024 restructuring.

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

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

to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a bridge loan of $ 2.2 million

in new funds.

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

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

during the term of the September 2023 Loan Agreement.

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

as collateral.

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

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

2023 Loan Agreement.

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

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

Synergy acquired certain assets from the Company

in exchange for the reduction in overall principal owed.

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

Lender which was restructured as part of the Note Amendment on October 29, 2024, which was subsequently repaid in full in connection

with the February 2025 Private Placement as set forth below.

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

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

to the Subscription Agreement.

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

6 - Long Term Debt” for more information.

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

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

The Note is due the

earlier of (i) February 5, 2025;

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

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

The Notes are convertible into common stock

after maturity if not paid prior.

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

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

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

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

Agreement (together the “Notes”).

The new Maturity Date 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

This loan was repaid in full as part of the February 2025 Private Placement.

In an effort to minimize losses and working capital needs, management is

focusing on cost controls, simplifying operations, and monetizing legacy assets.

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.

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.

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.

Q2 2025 we entered into two new distribution agreements to supplement our vaporizer category and offer customers best in class product

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

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.

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.

The Company’s liquidity requirements consist

primarily of working capital, public company costs, professional fees, digital asset treasury activities, and general corporate needs.

Primary sources of liquidity include cash and cash equivalents on hand, including U.S.

dollar-denominated stablecoins, and the Company’s

ability to access capital markets, subject to market conditions.

Company incurred a net loss of $ 18.2

million for the three months ended March 31, 2026, including

a non-cash fair value loss on digital assets of $ 12.9

Net loss attributable to Greenlane Holdings, Inc.

was $ 18.4 million for the three months ended March 31, 2026.

The Company used $ 4.8

million of cash and cash equivalents in operating activities

during the three months ended March 31, 2026.

As of March 31, 2026, the Company had $ 13.3

million of cash and cash equivalents, $ 4.0 million of stablecoin-related protocol instruments and $ 34.2

million of digital assets.

Management has evaluated the Company’s ability

to continue as a going concern in accordance with ASC 205-40.

Based on cash and cash equivalents on hand, expected operating cash flows,

and management’s plans to reduce operating costs, simplify operations, monetize legacy assets, and manage its digital asset treasury

strategy, management believes the Company has sufficient liquidity to meet its obligations for at least twelve months from the issuance

date of these condensed consolidated financial statements.

Accordingly, management concluded that there is no substantial doubt about

the Company’s ability to continue as a going concern for at least twelve months from the issuance date of these condensed consolidated

financial statements.

Transactions and Capital Structure

2024 and 2025, the Company completed a series of financing transactions, including debt issuances, warrant exchanges, and private placements,

to support liquidity and the transition of its business.

February 18, 2025, the Company completed a private placement with institutional investors for aggregate gross proceeds of approximately

$ 25.0 million, consisting of common stock, pre-funded warrants, and common warrants.

In connection with the transaction, the Company

also entered into exchange agreements with certain warrant holders to simplify its capital structure.

October 20, 2025, the Company entered into subscription agreements with certain accredited investors for a private placement funded

dollars, USDC or USDT.

In connection with the cash-funded leg of the transaction, the Company agreed to issue 3,328,012

shares of Class A common stock (pre-reverse split) and pre-funded warrants to purchase 9,789,166 shares of Class A common stock

(pre-reverse split).

The transaction closed on October 23, 2025 and provided gross consideration of approximately $ 109.9

million, consisting of U.S.

dollars, U.S.

dollar-denominated stablecoins, and BERA.

crypto-funded pre-funded warrants were exercisable into shares upon stockholder approval, which was received December 9, 2025, and for

certain of the crypto-funded pre-funded warrants, upon the expiration of lock-up agreements on April 18, 2026.

from these transactions were used to support the Company’s digital asset treasury strategy, repay outstanding debt obligations,

and provide limited liquidity for residual legacy operations.

details regarding these transactions, including terms of the securities issued and related accounting treatment, are included in the

notes to the consolidated financial statements.

October 2025, the Company adopted a treasury policy under which a significant portion of its balance sheet is allocated to digital assets,

primarily BERA.

The Board of Directors established a Digital Assets Committee to oversee this strategy.

Company has reduced its legacy operating footprint by simplifying operations, reducing costs, and monetizing legacy assets.

The remaining

legacy business operates through an asset-light model with a focus on efficiency and cash generation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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

the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December

31, 2026, or any other future annual or interim period.

13 unchanged sentences

GAAP requires us to make estimates and judgments in several

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

the collectability of accounts receivable;

the allowance for slow-moving

or obsolete inventory;

Such areas include, but are not limited to, the collectability of accounts receivable;

the allowance for credit losses;

the realizability of deferred tax assets;

the fair value measurement of digital assets and BERA-equivalent holdings;

the classification

and presentation of stablecoins and stablecoin-related instruments;

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 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

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.

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.

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.

will continue to evaluate recoverability each reporting period and adjust the reserve as necessary based on actual sell-through results.

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

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

Revenue is measured based on the amount of consideration

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

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

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

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

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

our retail store sales.

We provide no warranty on products sold.

Product warranty is provided by the manufacturers.

For certain product

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

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

is placed by a customer.

We typically complete these orders within one to 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.

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.

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

activity in cost of sales.

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

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

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

We also apply the practical expedient provided by the applicable

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

one year or less.

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

legal contingencies and

other loss contingencies;

the Tax Receivable Agreement (TRA) liability;

and the valuation and assumptions underlying equity-based compensation and warrants.

These estimates are

based on management’s knowledge about current events and expectations about actions we may undertake in the future.

results could differ materially from those estimates.

We manage our business through operating and reportable segments based on the information regularly reviewed by our

chief operating decision maker (“CODM”) to assess performance and allocate resources.

In connection with the launch of the

digital asset treasury strategy in October 2025 and management’s ongoing assessment under ASC 280, Segment Reporting, the Company

determined that, beginning in the fourth quarter of 2025, it has two operating and reportable segments:

Wholesale and Distribution, consisting

of legacy e-commerce and drop-ship operations, and Digital Assets, consisting of digital asset treasury activities, including acquisition,

staking, and validator participation related to BERA.

The Company’s CODM is a committee comprised of the Chief Executive Officer

and Chief Financial Officer.

The CODM evaluates performance based on segment net revenue, gross profit, selected operating expenses, and

capital allocation.

Segment results are reconciled to consolidated totals.

Value Measurements

apply the provisions of ASC Topic 820, Fair Value Measurements , which defines fair value, establishes a

framework for its measurement and expands disclosures about fair value measurements.

Fair value is defined as

the exchange price we would receive for an asset or an exit price we would pay to transfer a liability in the principal, or most

advantageous, market for our asset or liability in an orderly transaction with a market participant on the measurement date.

We determine the fair market values of our financial instruments based on the fair value hierarchy,

which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair

The following three levels of inputs may be used to measure fair value:

1 — Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement

2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

quoted prices in markets

that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities.

3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of

the assets or liabilities.

The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, digital

asset loan receivable, accounts payable, and accrued expenses and other current liabilities, approximate fair value due to the short-term

nature of these instruments.

See “Note 3—Fair Value of Financial Instruments.”

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

We elected to measure

these equity securities at cost minus impairment, if any.

At each reporting period, we make a qualitative assessment considering

impairment indicators to evaluate whether our investment is impaired.

The equity securities are adjusted to fair value when

an observable price change can be identified.

See “Note 3—Fair Value of Financial Instruments.”

dollar-denominated stablecoins held directly in Company-controlled wallets that are readily convertible into

known amounts of cash and have an insignificant risk of changes in value are classified as cash equivalents.

Stablecoins and stablecoin-related

instruments deployed into protocols, staking arrangements, lending arrangements, synthetic yield strategies, or other activities that

limit immediate redemption or introduce more than insignificant liquidity, counterparty, protocol, market structure, yield-strategy, or

valuation risk are not classified as cash equivalents and are presented based on the nature of the arrangement and measured at fair value when fair value is readily determinable, with changes in fair value recognized in earnings

unless otherwise required by applicable accounting guidance.

For the three months ended March 31, 2026, the Company presented aUSDC and sUSDe as stablecoin-related protocol instruments

within current assets.

These instruments were excluded from cash and cash equivalents.

Company accounts for qualifying crypto assets in accordance with ASC 350-60, Intangibles, Goodwill and Other, Crypto Assets.

The Company’s

digital assets consist primarily of BERA, the native token of the Berachain blockchain network, and certain BERA-equivalent holdings,

including staked, wrapped, or protocol-based receipt tokens that are economically linked to BERA.

assets are initially recognized at cost upon acquisition or receipt.

Transaction costs incurred to acquire digital assets are expensed

as incurred unless otherwise required by applicable accounting guidance.

Digital assets are subsequently measured at fair value at each

reporting date, with changes in fair value recognized in earnings within change in fair value of digital assets in the condensed consolidated

statements of operations and comprehensive loss.

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.

customer represented approximately 12 % and 10 % of net sales for the three and nine months ended September 30, 2025, respectively.

customers represented approximately 36 % and 27 % of net sales for the three and nine months ended September 30, 2024, respectively.

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

These costs are recognized within operating expenses.

The Board is considering strategic alternatives for the legacy distribution

the Company does not present discontinued operations.

Adopted Accounting Guidance

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

value is determined using quoted market prices in the Company’s principal market, when available.

For BERA-equivalent holdings, the Company determines fair value using observable conversion characteristics applicable

to the underlying BERA-equivalent instrument and quoted market prices for the underlying BERA token as of the measurement date.

The Company’s

treasury reporting tool supports custody tracking, wallet reconciliation, and conversion-rate documentation but is not the primary pricing

source for fair value measurement.

between native BERA and BERA-equivalent forms, including staking, wrapping, or protocol-based conversions, are treated as non-disposition

events when the Company retains substantially the same economic exposure to the underlying BERA.

Such transfers do not result in realized

gains or losses.

Asset Loan Receivable

asset loan receivables represent amounts lent under digital asset treasury arrangements and are recorded at the amount of stablecoins

or other consideration transferred, adjusted for repayments, settlements, and any expected credit losses.

The Company evaluates such

receivables for collectability under applicable credit loss guidance and considers counterparty credit risk, collateral or settlement

mechanics, contractual terms, and subsequent repayment activity.

Company earns staking revenue through its participation in staking, validator, and related protocol activities within the Berachain

Staking revenue is recognized when the Company obtains control of the awarded digital asset and the reward is measurable.

Staking revenue received in BERA or BERA-equivalent tokens is initially measured at fair value on the date control is obtained and

is included in net revenue in the condensed consolidated statements of operations and comprehensive loss.

After initial recognition,

digital assets received through staking activities are accounted for as digital assets and remeasured at fair value each reporting

period, with changes in fair value recognized in earnings within the changes in fair value of digital assets.

issued Accounting Pronouncements Not Yet Adopted

November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic

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.

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.

BUSINESS ACQUISITIONS AND DISPOSITIONS

Subsidiary Purchase Agreement

May 2024, the Company entered into an agreement with a group of individuals to sell 100 % equity interests of one of the Company’s

wholly-owned subsidiaries, Shavita B.V.

and substantially all of the assets of ARI Logistics B.V.

As of 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

Business Combinations .

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

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.

In November 2024, the FASB issued ASU No.

Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation

of Income Statement Expenses .

The amendments require public business entities to disclose additional disaggregated information about

certain income statement expense line items in the notes to the financial statements.

The objective of the amendments is to provide investors

with information to better understand an entity’s expenses, assess the entity’s prospects for future cash flows, and compare

performance over time and across entities.

ASU 2024-03 is effective for annual reporting periods

beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption

The Company is currently evaluating the impact of adopting ASU 2024-03 on its financial statement disclosures.

Other recently issued accounting pronouncements not

yet effective are not expected to have a material impact on the Company’s condensed consolidated financial statements or related

FAIR VALUE OF FINANCIAL INSTRUMENTS

Securities Without a Readily Determinable Fair Value

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.

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.

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

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.

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.

OF LESSEE OPERATING LEASE LIABILITY MATURITY

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

carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, digital

asset loan receivable, and accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these

Company holds digital assets consisting primarily of BERA and BERA-equivalent holdings.

Native BERA is measured at fair value using quoted

prices in active markets for identical assets.

BERA-equivalent holdings, including staked, wrapped, or protocol-based receipt tokens,

are valued using observable conversion characteristics from the applicable protocol and quoted market prices for the underlying BERA

token as of the measurement date.

The Company uses treasury reporting tools to support custody tracking, wallet reconciliation, and conversion-rate

documentation;

such tools are not the primary pricing source for fair value measurement.

Company classifies digital assets within the fair value hierarchy based on the lowest level input that is significant to the fair value

Native BERA is classified as Level 1 when quoted prices in active markets for identical assets are available.

BERA-equivalent

holdings are classified based on the observability of the underlying BERA price and the related conversion characteristics used to determine

To the extent quoted prices for identical assets are not available for BERA-equivalent holdings, the Company considers the

observability of the underlying BERA price and applicable protocol conversion characteristics in determining the appropriate fair value

hierarchy classification.

a Level 1 input is available, it is required to be utilized as a measure of fair value without adjustment, including adjustments that

would reflect the size of the Company’s holdings or blockage factors.

Due to the inherent volatility of digital asset markets,

the fair value of these assets may fluctuate significantly, which could materially impact the Company’s financial position and

results of operations.

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

SCHEDULE OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS

Fair Value at March 31, 2026

(in thousands)

Operating Leases

Remainder of 2025

Total minimum lease payments

imputed interest

Present value of minimum lease payments

current portion

Long-term portion

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.

aUSDC and sUSDe

Stablecoin-related protocol instruments

BERA and BERA-equivalent tokens

Digital assets

Fair Value at December 31, 2025

(in thousands)

BERA and BERA-equivalent tokens

Digital assets

Digital assets included in these tables consist of BERA and BERA-equivalent tokens.

Stablecoins classified as cash

equivalents are excluded from the tables above because they are carried at amounts that approximate fair value due to their short-term

nature and redeemability into U.S.

Stablecoin-related instruments that do not qualify as cash equivalents are excluded from these

tables unless classified as digital assets measured at fair value.

There were no transfers between Level 1 and Level

2 and no transfers to or from Level 3 of the fair value hierarchy during the three months ended March 31, 2026 or the year ended December

Securities Without a Readily Determinable Fair Value

Company’s investment in equity securities without a readily determinable fair value consists of an ownership interest in Airgraft

Inc., a private company.

The Company determined that its ownership interest does not provide the Company with significant influence over

Airgraft Inc.;

accordingly, the investment is accounted for as an equity security.

the equity securities do not have a readily determinable fair value, the Company elected to measure the investment using the measurement

alternative under ASC 321, at cost, less impairment, if any, adjusted for observable price changes in orderly transactions for identical

or similar investments of the same issuer.

Company evaluates the investment each reporting period for impairment indicators and observable price changes.

The Company did not identify

any impairment or observable price changes requiring adjustment during the three months ended March 31, 2026 or the year ended December

of March 31, 2026 and December 31, 2025, the carrying value of the Company’s investment in Airgraft Inc.

was approximately $ 1.9

million and was included within “Other assets” in the condensed consolidated balance sheets.

As of March 31, 2026, the Company had no material operating lease right-of-use assets or operating lease liabilities,

as substantially all leased facilities had been exited or terminated.

expense under operating leases was approximately $ 0.2 million and $ 0.5 million for the three months ended March 31, 2026 and 2025, respectively.

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

consolidated statements of operations and comprehensive loss:

OF LEASE COST

(in thousands)

For the nine months ended

September 30,

SCHEDULE OF LEASE COST

For the three months ended

(in thousands)

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Total lease cost

table below presents lease-related terms and discount rates as of September 30, 2025:

Weighted average remaining lease terms

Weighted average discount rate

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

(in thousands)

September 30, 2025

December 31, 2024

Exchange Note

Total long term debt

Less unamortized debt issuance costs

Less current portion of debt

Debt, net, excluding operating and finance leases and liabilities

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

the “Future Receivables Financings”).

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

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

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

fees of approximately $ 2.8 million.

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

$ 0 during the October 29, 2024 restructuring.

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

exchange an aggregate of $ 4,617,307

of debt originally owed to Agile Capital Funding LLC and Cedar Advance LLC in a 3(a)(9) exchange for new Senior Subordinated Notes

in the principal amount of $ 4,000,000

due one year from issuance (the “Exchange Note”), reducing outstanding indebtedness by approximately $ 617,000 .

The Exchange Note is convertible at the option of the holder at $ 2,377.50

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”).

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

As a result, the Company determined

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

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

The resulting loss on extinguishment of $ 2.0 million

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

noted above, the Company issued 1,683 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.

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.

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

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.

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

Pursuant to the Note Amendment, Cobra agreed to extend the Maturity Date of its senior promissory note dated May 1, 2024.

The new Maturity Date was October 29, 2025 .

consideration for the extinguishment of the Secured Bridge Loan, Cobra paid off the $ 2.7

million balance owed to Synergy as part of the Secured Bridge Loan.

In exchange for paying off the Secured Bridge Loan, the Company

(i) agreed to make the Cobra Notes convertible at the option of Cobra with a conversion price of $ 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.

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.

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

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

to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a 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.

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

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.

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

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

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

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

The resulting loss on extinguishment

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

nine months ended September 30, 2024.

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.

COMMITMENTS AND CONTINGENCIES

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.

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.

Earth’s Healing, Inc.;

Redbud Roots Inc., and Summit Industrial Solutions LLC vs.

Shenzhen Smoore Technology Co.

Research LLC;

Greenlane Holdings, Inc.;

and CB Solutions, LLC dba Canna Brand Solutions, Lead Case No.

Direct Purchaser Plaintiffs (DPPs) antitrust cases below, filed a consolidated amended complaint.

The Company is involved in legal proceedings and claims arising in the ordinary course of business.

The Company records

a liability for such matters when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

For matters where a loss is not probable or cannot be reasonably estimated, no liability is recorded;

however, the Company discloses such

matters if there is at least a reasonable possibility that a material loss may have been incurred.

Management evaluates these matters

on an ongoing basis.

Although outcomes are inherently uncertain, management does not currently believe that the ultimate resolution of

these proceedings will have a material adverse effect on the Company’s condensed consolidated financial statements, except as otherwise

disclosed below.

The Company is a defendant in various consumer and direct purchaser class action lawsuits alleging antitrust violations

in connection with the distribution of CCELL products.

These matters include actions filed in federal courts in California and involve

substantially similar allegations against the Company and other distributors.

The Company believes these cases are without merit and is

jointly defending these matters with co-defendants.

At this stage, the Company is unable to estimate a reasonably possible loss or range

of loss, if any.

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

25-Cv-1428 (N.D.

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

Distributors of Ccell products, including Greenlane Holdings.

The Company believes the case is baseless and without merit,

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

brought a purchaser class action antitrust action against four U.S.

distributors of CCELL

products, including Greenlane Holdings, Inc.

April 10, 2025, Redbud Roots Inc.

3:25-cv-03221 (N.D.

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

Distributors of Ccell products, including Greenlane Holdings.

The Company is jointly defending the case with the other named

April 17, 2025, Summit Industrial Solutions LLC.

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.

The Company is jointly defending the case with the

other named defendants.

brought a purchaser class action antitrust action against four U.S.

distributors of CCELL products,

including Greenlane Holdings, Inc.

April 17, 2025, Summit Industrial Solutions LLC brought a purchaser class action antitrust action against four U.S.

distributors of CCELL

products, including Greenlane Holdings, Inc.

above matters have been consolidated into a single amended complaint.

December 16, 2024, S.K.

et al brought a consumer class action antitrust action against four U.S.

distributors of CCELL products, including

Greenlane Holdings, Inc.

The Company is involved in certain commercial disputes

arising from legacy operations, including claims related to professional services, contract performance, and manufacturing agreements.

The Company disputes these claims and is actively defending or resolving these matters, including through settlement discussions where

At this time, the Company is unable to estimate a reasonably possible loss or range of loss, if any.

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).

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.

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.

brought a breach of contract suit against the Company’s subsidiary, Warehouse Goods, LLC, in the amount of approximately

The Company disputes the claims and has engaged

in settlement discussions.

At this time, the Company is unable to estimate a reasonably possible loss, if any.

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.

have not taken any reserves for litigation for the three and nine months ended September 30, 2025 and 2024, respectively.

brought a suit for liquidated damages in the amount of approximately $ 0.7

million under the September 2020 Manufacturing Agreement against Warehouse Goods, LLC.

The Company disputes the claims

and is defending the matter.

At this time, the Company is unable to estimate a reasonably possible loss, if any.

November 13, 2024, Pryor Cashman made a demand for arbitration for unpaid legal invoices in the amount of approximately $ 0.3 million.

The Company previously disputed these claims and entered into a settlement arrangement, which has been satisfied in accordance with

the agreed payment terms.

Investigation

February 25, 2025, the

Company received a Civil Investigative Demand regarding an investigation to determine whether there were alleged violations of the

False Claims Act concerning allegations related to the approval, payment, and forgiveness of a 2020 Paycheck Protection Program loan

of approximately $ 1.9

million obtained by KIM International LLC, a subsidiary acquired by the Company in 2021.

The Company is cooperating with the

investigation.

At this time, the Company is unable to estimate a reasonably possible loss or range of loss, if any.

Company maintains an accrual of approximately $ 0.5

million as of March 31, 2026 and December 31, 2025 related

to legal matters.

This accrual does not necessarily relate to any individual matter described above, and the Company cannot estimate

additional reasonably possible losses, if any, at this time.

Contingencies

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

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

If the relevant taxing authorities

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

The Company may be subject to claims related to various non-income taxes, including sales, value added, consumption,

and similar taxes, from various tax authorities, including in jurisdictions in which the Company already collects and remits such taxes.

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

“Note 4—Leases” for details of our future minimum lease payments under operating lease liabilities.

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

10—Income Taxes” for information regarding income tax contingencies.

SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

Receivable, net

receivable, net is as follows (in thousands):

SCHEDULE OF ACCOUNTS RECEIVABLE

March 31, 2026

December 31, 2025

Accounts receivable amortized cost

Allowance for credit losses

Net accounts receivable

following table summarizes the changes in the allowance for credit losses for accounts receivable (in thousands):

SUMMARIZES THE CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES FOR ACCOUNTS RECEIVABLE

March 31, 2026

December 31, 2025

Balance, beginning of period

Provision for expected credit losses, net

Balance, end of period

and Equipment, net

following is a summary of our property and equipment, at costs less accumulated depreciation and amortization:

OF PROPERTY PLANT AND EQUIPMENT LESS DEPRECIATION AND AMORTIZATION

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT LESS DEPRECIATION AND AMORTIZATION

(in thousands)

Estimated useful life

September 30, 2025

March 31, 2026

December 31, 2025

2 unchanged sentences

Lesser of lease term or 5 years

Work in process

Property and equipment, gross

1 unchanged sentence

Property and equipment, net

expense for property and equipment was approximately $ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and

expense for property and equipment was approximately $ 0.1 million and $ 0.1 million for the three months ended March 31, 2026 and 2025,

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.

Current Assets

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

OF OTHER CURRENT ASSETS

SCHEDULE OF OTHER CURRENT ASSETS

(in thousands)

September 30, 2025

March 31, 2026

December 31, 2025

Other current assets:

VAT refund receivable

Prepaid expenses

Indemnification receivable, net

Non-inventory deposits

Customs bonds

current assets

Other current assets

Expenses and Other Current Liabilities

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

OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

(in thousands)

September 30, 2025

March 31, 2026

December 31,2025

Accrued expenses and other current liabilities:

Accrued employee compensation

Accrued professional fees

Other accrued expenses

expenses and other current liabilities

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

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

We typically complete orders related to customer deposits within one

to 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:

OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

(in thousands)

Customer Deposits

Balance as of December 31, 2024

Increases due to deposits received, net of other adjustments

Customer adjustments

Revenue recognized

Balance as of September 30, 2025

Other Comprehensive Income (Loss)

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

OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS

(in thousands)

Currency Translation

Unrealized Gain

or (Loss) on Derivative Instrument

Balance at December 31, 2023

Other comprehensive income (loss)

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

Balance at December 31, 2024

Other comprehensive income (loss)

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

Balance at September 30, 2025

Concentration

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.

Accrued expenses and

other current liabilities

Party Transactions

Persofsky, who served as a Greenlane Director until October 23, 2025, is also a Principal Owner of Green Gruff USA Inc, (“Green Gruff”).

January 2025 the Company entered into an amended distribution agreement with Green Gruff.

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

(“Blum”) and serves on

the Blum board of directors.

Total accounts receivable due from Blum were approximately $ 0.4 million as of December 31, 2024 and 2023,

respectively.

On February 8, 2023, we filed a lawsuit against Blum in Superior Court of California, Orange County, seeking to compel

the repayment of Blum’s open balance due to us.

As of the date of these financial statements were available to be issued, there

has been a judgement received in favor of the Company.

individuals who were employees of the Company at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan

taken out on September 22, 2023, however, none were executive officers or directors of the Company.

October 24, 2025, the Company appointed its Chief Investment Officer to manage digital-asset treasury activities.

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.

October 24, 2025, the Company appointed its Chief Investment Officer, Ben Isenberg, to manage digital-asset treasury activities.

Chief Investment Officer has relationships within the Berachain ecosystem, and is also the owner of BSQD Corp., a liquidity provider

who the Company may transact with to execute BERA acquisitions.

Such transactions are subject to review and approval by the

Company’s Digital Asset Committee prior to execution.

Persofsky, who served as a Greenlane Director until October 23, 2025, is a Principal Owner of Green Gruff USA Inc, (“Green

In January 2025 the Company entered into an amended distribution agreement with Green Gruff.

During the three months

ended March 31, 2026, the Company did not recognize material revenue or cost of goods sold from transactions with Green

the three months ended March 31, 2026, Greenlane Subsidiary Inc., a wholly owned subsidiary of the Company, entered into a Token

Purchase and Sale Agreement and a Token Lending Agreement with Berachain Operations Corporation.

Under the Token Lending Agreement,

the Company may lend USDC and/or USDT stablecoins to Berachain Operations Corporation.

The lending arrangement is intended to

facilitate BERA acquisition activity under the Token Purchase and Sale Agreement.

Under the Token Purchase and Sale Agreement, the

Company may request to purchase tranches of BERA tokens from Berachain Operations Corporation, including through settlement

mechanics that reduce amounts outstanding under the lending arrangement.

Operations Corporation may use one or more liquidity providers or market participants to source BERA tokens.

One such liquidity

provider is BSQD Corp., which is wholly owned by Ben Isenberg, the Company’s Chief Investment Officer.

The Company’s

review and approval process covered the arrangements with Berachain Operations Corporation and the related-party considerations

associated with BSQD.

The Company continues to monitor BERA acquisition activity, including any involvement of BSQD or other

related-party liquidity providers, through its related-party transaction review process and Digital Assets Committee

maximum amount available under the lending arrangement during the three months ended March 31, 2026 was $ 5.0 million.

31, 2026, $ 235 thousand was outstanding and recorded as a digital asset loan receivable from a related party.

No interest income was recognized during

Based on management’s evaluation under ASC 810, the Company does not consolidate Berachain Operations

DIGITAL ASSETS

October 23, 2025, the Company adopted BERA as its primary treasury reserve asset.

Under this treasury strategy, the Company acquires,

holds, and strategically deploys BERA, the native token of the Berachain blockchain network, as well as certain BERA-based receipt,

staked, or wrapped positions that are economically linked to BERA (“BERA-equivalent tokens”).

These holdings are maintained

for long-term treasury management, ecosystem participation, staking, validator activities, liquidity deployment, and other Board-approved

strategic activities.

Company accounts for its BERA and BERA-equivalent holdings as digital assets in accordance with ASC 350, Intangibles—Goodwill

and Other , as amended by ASU 2023-08, Accounting for and Disclosure of Crypto Assets .

The Company has legal ownership and

control over these digital assets, which are presented as digital assets in the Condensed Consolidated Balance Sheets.

31, 2026, certain BERA and BERA-equivalent holdings were subject to contractual transfer or sale restrictions under applicable

treasury and protocol arrangements.

Management considered such restrictions in its liquidity planning and treasury management

assets are initially recorded at cost upon purchase, receipt, or conversion.

Transaction costs incurred to acquire digital assets are

expensed as incurred unless otherwise required by applicable accounting guidance.

Subsequently, BERA and BERA-equivalent holdings

are remeasured at fair value as of each reporting date, with changes in fair value recognized in earnings within other (expense) income,

net, in the Condensed Consolidated Statements of Operations.

disclosure and treasury management purposes, the Company monitors both (i) native BERA units held directly and (ii) BERA-equivalent units,

which represent positions in receipt, staked, wrapped, or protocol-native instruments that are economically convertible into, or otherwise

directly linked to, underlying BERA units.

Management evaluates treasury performance, exposure, and BERA-per-share metrics on both a

native-unit basis and a BERA-equivalent basis.

The following tables present the units held, cost basis, and fair value of native

BERA and BERA-equivalent digital assets as of March 31, 2026 and December 31, 2025, respectively, in thousands except for tokens:

OF UNITS HELD, COST BASIS, AND FAIR VALUE

BERA-Equivalent Tokens

Cost Basis (USD)

Fair Value (USD)

March 31, 2026

December 31, 2025

basis reflects the historical acquisition cost of digital assets, including digital assets acquired through the October 2025 PIPE transaction,

subsequent treasury purchases, and staking rewards recognized upon receipt.

Comparative period cost basis amounts are presented consistent

with amounts previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Cost basis reflects the cost of the digital asset

at the time of purchase or receipt and excludes transaction costs that were expensed as incurred.

Fair value represents quoted digital

assets prices within the Company’s principal market at the time of measurement (11:59 p.m.

The following table presents a rollforward of the Company’s digital asset holdings, including BERA tokens and

BERA-equivalent sWBERA, iBERA, siBERA, and similar tokens held in Company-controlled wallets, for the three months ended March 31, 2026.

Digital assets are measured at fair value with changes recognized in earnings.

dollar-denominated stablecoins that qualify as cash

equivalents are excluded from this rollforward.

Stablecoin-related protocol instruments that do not qualify as cash equivalents are also

excluded from this rollforward.

SCHEDULE OF CRYPTOCURRENCY ACTIVITIES

Digital Assets

Balance as of December 31, 2025

Staking revenue

assets acquired from October 2025 PIPE

Purchases of BERA and BERA-equivalent digital assets

Change in fair value

Balance at March 31, 2026

Digital Assets

as of December 31, 2024

assets acquired from October 2025 PIPE

of BERA and BERA-equivalent digital assets

in fair value

at December 31, 2025

As of March 31, 2026, a portion of the

Company’s BERA and BERA-equivalent digital asset holdings were subject to contractual transfer or sale restrictions under the

applicable treasury, staking, and protocol arrangements.

As of December 31, 2025, the Company did not have any BERA or

BERA-equivalent holdings subject to operational transfer restrictions.

The table below summarizes the Company’s restricted and

unrestricted BERA-equivalent holdings, including units held and fair value, as of each balance sheet date, in thousands except for

SCHEDULE OF COMPANY’S RESTRICTED AND UNRESTRICTED

BERA-EQUIVALENT HOLDINGS, INCLUDING UNITS HELD AND FAIR VALUE

BERA-Equivalent Tokens

BERA- Equivalent Tokens

As of March 31, 2026

As of December 31, 2025

BERA-Equivalent Tokens

BERA- Equivalent Tokens

Restricted Tokens

Unrestricted Tokens

Total intangible digital assets

STOCKHOLDERS’ EQUITY

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).

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.

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.

Stock and Warrant Offerings

2024 Private Placement

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.

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.

2024 Private Placement

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

In connection

with the Exchange, the Company issued an aggregate of 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.

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.

2025 Private Placement

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

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.

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.

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.

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.

Shares of the Company’s Class A common stock have both voting and economic rights, including the right to receive

dividends or distributions, if declared, and proceeds upon dissolution, winding up or liquidation.

Each share of Class A common stock

entitles the holder to one vote on all matters submitted to stockholders.

All Class B common stock was converted into Class A common stock

in December 2022;

accordingly, no shares of Class B common stock remain outstanding.

Effective June 26, 2025, the Company completed a one-for-750

reverse stock split of its issued and outstanding shares of Class A common stock.

As a result, every 750 shares of Class A common stock

issued and outstanding were converted into one share of Class A common stock.

In lieu of issuing fractional shares, the Company rounded

fractional shares up to the next whole share.

On April 2, 2026, the Company filed a Certificate

of Amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to effect a

one-for-eight reverse stock split of its issued and outstanding shares of Class A common stock, effective April 6, 2026.

every eight shares of Class A common stock issued and outstanding were converted into one share of Class A common stock.

No fractional

shares were issued in connection with the reverse stock split.

In lieu of fractional shares, stockholders otherwise entitled to receive

a fractional share received a cash payment equal to such fraction multiplied by the closing sales price of the Class A common stock as

reported on the Nasdaq Capital Market on the trading day immediately preceding the effective date of the reverse stock split.

The reverse stock splits did not change the par value

of the Class A common stock or the authorized number of shares of Class A common stock.

All share and per-share amounts presented in these

condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect

to the reverse stock splits.

The Company has issued warrants in connection with

prior equity financing transactions, restructuring and exchange transactions, and strategic advisory arrangements.

The Company’s

warrants are classified as equity instruments when they are indexed to the Company’s own stock and meet the criteria for equity

classification.

During the three months ended March 31, 2026, the

Company did not issue any warrants.

During the three months ended March 31, 2026, warrants to purchase 26,250 shares of Class A common

stock were exercised.

Because certain pre-funded warrants were substantially funded at issuance and have a nominal exercise price, exercises

of such warrants did not result in material cash proceeds and were reflected as reclassifications within stockholders’ equity.

Warrant activity for the three months ended March 31, 2026 was as follows:

SCHEDULE OF WARRANT ACTIVITY

Weighted Average

Exercise Price

Balance, December 31, 2025

Expired or rescinded

Balance, March 31, 2026

of March 31, 2026, outstanding warrants have a weighted average remaining life of 5.41 years.

For the three months ended March 31, 2026, the Company

recognized approximately $ 0.2

million of non-cash stock-based compensation expense related to strategic advisory warrants issued to non-employee service providers.

This expense is presented separately as stock-based compensation – strategic advisory warrants in the condensed consolidated statements

of operations and comprehensive loss.

As of March 31, 2026, approximately $ 0.5

million of unrecognized compensation expense related to strategic advisory warrants remained, which is expected to be recognized through

September 2026.

No warrants were issued during the three months ended March 31, 2026.

Accordingly, no grant-date valuation assumptions

are presented for the period.

Loss Per Share

net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number

of shares of Class A common stock outstanding during the period.

Diluted net loss per share of Class A common stock is computed by dividing

net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect

to potentially dilutive instruments.

reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common

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

Basic net loss per share of Class A common stock is

computed by dividing net loss attributable to Greenlane Holdings, Inc.

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

Holdings, Inc.

by the weighted-average number of shares of Class A common stock outstanding, adjusted to give effect to potentially dilutive

Pre-funded warrants with nominal exercise prices are

included in the weighted-average number of shares outstanding for purposes of calculating basic net loss per share beginning on their

respective issuance dates because the exercise price is non-substantive and exercise is considered virtually assured.

A reconciliation of the numerator and denominator

used in the calculation of basic and diluted net loss per share of Class A common stock is as follows:

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

(in thousands, except per share data)

Three months ended September 30,

Nine months ended September 30,

(in thousands, except per share data)

Net income (loss) attributable to non-controlling interests

thousands, except share and per share data)

Three months ended March 31,

(in thousands, except share and per share data)

Net income attributable to non-controlling interests

Net loss attributable to Class A common stockholders

1 unchanged sentence

Net loss per share of Class A common stock - basic and diluted

$ ( 5,484.67 )

$ ( 12,044.84 )

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.

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.

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.

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.

For the three months ended March 31, 2026 and 2025,

stock options and warrants to purchase shares of Class A common stock were excluded from the computation of diluted net loss per share

because their inclusion would have been anti-dilutive due to the net loss reported for each period.

following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net

loss per share because their inclusion would be anti-dilutive (in common stock equivalent shares):

OF OUTSTANDING POTENTIALLY DILUTIVE SECURITIES

As of September 30,

SCHEDULE OF OUTSTANDING POTENTIALLY DILUTIVE SECURITIES

Three Months Ended March 31,

Stock options to purchase common stock

Warrants to purchase common stock

Antidilutive Securities, value

COMPENSATION PLANS

and Restated 2019 Equity Incentive Plan

In April 2019, the Company adopted the Greenlane Holdings, Inc.

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”

The Plan has been

amended and restated several times since adoption.

As of December 31, 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.

October 2025, the Company included in its proxy statement a proposal to increase the share reserve under the Company’s equity incentive

plan to 375,000

The plan includes a 15% evergreen feature.

the October 2025 private placement and related stockholder approval, the Company filed a registration statement on Form S-8 to register

additional shares available for issuance under the plan.

As of March 31, 2026, 140,000 shares remained available for future issuance

under the 2019 Plan.

option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of

grant based on the closing market price of its common stock as reported on Nasdaq.

Stock option awards generally include

service-based vesting conditions and expire five years after the date of grant.

During the year ended December 31, 2025, the Company granted 375,000 nonqualified stock options with a weighted-average

exercise price of $ 30.72 .

The grant-date fair value of these awards was determined using the Black-Scholes option pricing model.

Key assumptions

included a stock price of $ 27.68 , an expected term of four years, expected volatility of 120 %, a risk-free rate of 4.2 %, and a dividend

yield of zero .

The expected term was determined based on the contractual term of the awards and expected exercise behavior.

No stock options

were granted during the three months ended March 31, 2026.

Company recorded stock-based compensation expense related to stock options of approximately $ 0.5

million and none

for the three months ended March 31, 2026 and 2025, respectively, related to stock options.

The 2026 expense reflects amortization

of the grant-date fair value of stock option awards granted in October 2025 over the applicable service periods.

following table summarizes the Company’s stock option activity:

SCHEDULE OF STOCK OPTION ACTIVITY

Stock options

Weighted average

exercise price

Outstanding at December 31, 2025

Outstanding at March 31, 2026

Based on the fair market value of the Company’s common stock at March 31, 2026, the total intrinsic value of

outstanding options was zero.

options outstanding, vested and expected to vest and exercisable are as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING VESTED

As of March 31, 2026

Number of shares

Outstanding, vested and or expected to vest

During the three months ended March 31, 2026, the Company recognized the remaining grant-date fair value of its outstanding

employee stock option awards over the applicable service periods.

As of March 31, 2026, there was no unrecognized compensation expense

related to employee stock options outstanding as of period-end.

No stock options were granted or forfeited during the three months ended

March 31, 2026.

the year ended December 31, 2025, the Company granted 14,375 restricted stock units (“RSUs”)

to members of senior management and certain other employees pursuant to the 2019 Plan, after giving effect to the reverse stock

The Company accounts for RSUs issued to employees at fair value based on the market price of the Company’s common

stock on the date of grant.

The weighted-average grant-date fair value of RSUs granted during the year ended December 31, 2025 was

During the three months ended March 31, 2026, the Company recognized approximately $ 0.1 million of stock-based compensation

expense related to RSUs granted in 2025.

No RSUs were granted or forfeited during the three months ended March 31, 2026.

of March 31, 2026, there was no unrecognized compensation expense related to unvested RSUs.

Compensation Expense

compensation expense is included within “salaries, benefits and payroll taxes” in our condensed consolidated statements of

operations and comprehensive loss.

We recognized equity-based compensation expense as follows:

Equity-based compensation expense related to employee awards is included within salaries, benefits and payroll taxes

in the condensed consolidated statements of operations and comprehensive loss.

Stock-based compensation expense related to strategic advisory

warrants issued to non-employee service providers is presented separately as stock-based compensation – strategic advisory warrants

in the condensed consolidated statements of operations and comprehensive loss.

The Company recognized employee equity-based compensation expense as follows:

SCHEDULE OF EQUITY BASED COMPENSATION EXPENSE

(in thousands)

Nine months ended

September 30,

For the three months ended March 31,

(in thousands)

Stock options - Class A common stock

Restricted shares - Class A common stock

Restricted stock units - Class A common stock

Total equity-based compensation expense

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.

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.

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.

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.

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.

For the three months ended March 31, 2026, employee equity-based compensation expense consisted of approximately

$ 0.5 million related to stock options and approximately $ 0.1 million related to RSUs, each related to awards granted during 2025.

remaining grant-date fair value of the Company’s employee stock option awards was fully recognized as of March 31, 2026.

the Company does not expect to recognize additional compensation expense in future periods related to employee stock options outstanding

as of March 31, 2026, unless additional awards are granted or existing awards are modified.

Stock-based compensation expense related

to strategic advisory warrants was approximately $ 0.2 million for the three months ended March 31, 2026, is presented separately as stock-based

compensation – strategic advisory warrants in the condensed consolidated statements of operations and comprehensive loss, and is

excluded from the employee equity-based compensation table above.

to December 31, 2022, the Operating Company was treated as a partnership for U.S.

federal and most applicable state and local income

tax purposes, and its taxable income or loss was generally passed through to its members.

Effective December 31, 2022, the Operating

Company became wholly owned by the Company and is treated as a disregarded entity for U.S.

tax purposes.

Beginning in 2023, 100% of the

Operating Company’s U.S.

income and expenses have been included in the Company’s U.S.

federal and state income tax returns.

The Company also files in various state jurisdictions and certain foreign jurisdictions, including Canada and Netherlands.

the three months ended March 31, 2026 and 2025, management assessed the realizability of the Company’s deferred tax assets.

on this assessment, management concluded that it is not more likely than not that sufficient taxable income will be generated to realize

the benefits associated with its deferred tax assets.

Accordingly, the Company continues to maintain a full valuation allowance against

its deferred tax assets, resulting in a net deferred tax asset balance of $ 0 as of March 31, 2026 and December 31, 2025.

management determines in a future period that it is more likely than not that all or a portion of its deferred tax assets will be realized,

the valuation allowance may be reduced, which would reduce the provision for income taxes in the period such determination is made.

Company does not currently expect material repatriation of earnings from its foreign subsidiaries.

However, to the extent future restructuring,

liquidation, or dissolution activities result in distributions from foreign subsidiaries, such distributions may be subject to local

withholding taxes and other applicable tax consequences.

Tax Positions

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.

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

the three months ended March 31, 2026 and 2025, respectively, the Company did not record any unrecognized tax benefits related to

uncertain tax positions.

The Company does not expect material interest or penalties related to uncertain tax positions due to its

historical losses, significant net operating loss carryforwards and full valuation allowance position.

As of the date of issuance of

these condensed consolidated financial statements, the Company was not subject to any material income tax examinations.

Receivable Agreement (TRA)

entered into the TRA with the Operating Company and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment

by the Operating Company to the members of 85 % of the amount of tax benefits, if any, that we may actually realize (or in some circumstances

are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions of Common Units as described in

“Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under

annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such

The Operating Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize.

The TRA payments

are not conditioned upon any continued ownership interest in the Operating Company.

The rights of each noncontrolling interest holder

under the TRA are assignable to transferees of its interest in the Operating Company.

The timing and amount of aggregate payments due

under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates

each year and the applicable tax rate.

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.

utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, we will record a liability related

to the TRA, which would be recognized as expense within our condensed consolidated statements of operations and comprehensive (loss)

the three months ended 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.

Company is party to a tax receivable agreement (“TRA”) that provides for the payment to certain former holders of interests

in the Operating Company of 85 % of certain tax benefits, if any, that the Company actually realizes, or in some circumstances is deemed

to realize, as a result of increases in tax basis and certain other tax benefits.

of March 31, 2026 and December 31, 2025, the Company had recorded no liability under the TRA because, based on management’s

valuation allowance assessment, the related tax benefits were not considered realizable and the amount and timing of any future

payments were not probable or reasonably estimable.

realization of the deferred tax assets subject to the TRA becomes more likely than not in a future period, the Company may record a

liability related to the TRA, which would be recognized as expense in the condensed consolidated statements of operations and

comprehensive loss.

payments were made under the TRA during the three months ended March 31, 2026.

SEGMENT REPORTING

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

The CFO acts as the CODM.

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.”

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.

The Company defines its operating segments as components

of the business whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”)

to assess performance and allocate resources.

Segment information is prepared on the same basis that management uses for operational decision-making

The Company’s CODM is a committee comprised of the Company’s Chief Executive Officer and Chief Financial Officer.

In connection with the launch of the Company’s

digital asset treasury reserve strategy in October 2025 and management’s ongoing assessment of the requirements under ASC 280, Segment

Reporting, the Company reassessed its segment conclusions and determined that, beginning in the fourth quarter of 2025, it has two operating

and reportable segments:

(i) the Wholesale and Distribution Segment and (ii) the Digital Asset Segment.

The Wholesale and Distribution Segment consists of

the Company’s reduced-scale legacy business, including the sale and distribution of wholesale accessories, vape devices, and lifestyle

These products are generally subject to similar regulatory environments, are sold to similar customer types, and are managed

through the Company’s remaining asset-light distribution and e-commerce activities.

The Digital Asset Segment consists of the Company’s

digital asset treasury activities, including the acquisition, holding, staking, validator participation, and strategic deployment of BERA

and BERA-equivalent digital assets.

Digital asset treasury activities are managed to support the Company’s treasury strategy, liquidity

objectives, ecosystem participation, and staking revenue generation.

The CODM assesses performance of the Company’s

reportable segments based on net revenue, gross profit, selected operating expenses, and certain asset information.

The accounting policies

used for segment reporting are consistent with those used in the preparation of the Company’s condensed consolidated financial statements.

As the Company continues to develop its digital asset treasury strategy, management may provide additional information to the CODM, including

additional treasury, liquidity, fair value, and asset-level metrics, which will be evaluated for inclusion in future segment disclosures.

There was no Digital Asset Segment activity for the

three months ended March 31, 2025.

The following table sets forth net revenue, cost of revenue, and gross profit by reportable segment for the three

months ended March 31, 2026 and 2025:

SCHEDULE OF NET SALES BY MAJOR PRODUCT CATEGORY

(in thousands)

Three Months Ended September 30,

(in thousands)

Cost of sales

Gross profit (loss)

Wholesale and Distribution

Digital Asset

Wholesale and Distribution

Digital Asset

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Wholesale and Distribution

Digital Asset

Wholesale and Distribution

Digital Asset

Cost of revenue

following table sets forth operating expenses by reportable segment for the three months ended March 31, 2026.

SCHEDULE OF DETAILED INFORMATION ABOUT REPORTABLE SEGMENT

(in thousands)

Nine Months Ended September 30,

Wholesale and

Digital Asset

Wholesale and

Digital Asset

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

(in thousands)

Cost of sales

Gross profit (loss)

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

Wholesale and

Digital Asset

Wholesale and

Digital Asset

Operating expenses

Salaries, benefits and payroll taxes

Strategic advisory warrants

General and administrative

Total operating expenses

Changes in fair value of digital assets are not included in segment gross profit and are reviewed separately by the

CODM as part of treasury strategy, fair value exposure, and capital allocation activities.

The following table sets forth certain asset categories reviewed by the CODM in evaluating the Company’s reportable segments and liquidity profile:

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

(in thousands)

June 30, 2025

December 31, 2024

Wholesale and Distribution

Digital Asset

Wholesale and Distribution

Digital Asset

As of March 31, 2026

As of December 31, 2025

(in thousands)

September 30, 2025

December 31, 2024

Wholesale and Distribution

Digital Asset

Wholesale and Distribution

Digital Asset

Cash equivalents, including qualifying stablecoins

Accounts receivable, net

Vendor deposits

following table sets forth net sales disaggregated by geography:

OF NET SALES DISAGGREGATED BY GEOGRAPHY

(in thousands)

Three Months Ended September 30,

(in thousands)

United States

Total net sales

(in thousands)

Nine Months Ended September 30,

Digital asset loan receivable

Stablecoin-related protocol instruments

Digital assets – BERA & BERA-equivalents

following table sets forth net revenue disaggregated by geography:

SCHEDULE OF NET SALES DISAGGREGATED BY GEOGRAPHY

Three Months Ended March 31,

(in thousands)

United States

Total net sales

Total net revenue

following table sets forth our long-lived assets by geographic area, which consist of property and equipment, net, and operating lease

2 unchanged sentences

(in thousands)

September 30, 2025

March 31, 2026

December 31, 2025

1 unchanged sentence

Total long-lived assets

There were no long-lived assets within the Digital Asset Segment as of March 31, 2026 or December 31, 2025.

The Company’s digital asset activities are primarily comprised of digital assets, qualifying stablecoins, stablecoin-related

protocol instruments, and related treasury activities, which are presented based on their nature, liquidity profile, and applicable accounting

classification.

SUBSEQUENT EVENTS

placement and adoption of digital asset treasury strategy

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

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.

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.

private placement and associated adoption of a digital asset treasury strategy are non-recognized subsequent events under ASC 855.

nature of the transactions and the expected financial statement impact in future periods are disclosed below.

policy and GAAP implications

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

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

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,

October 23, 2025, the Board established a Digital Assets Committee to oversee the Company’s digital-asset treasury strategy.

Related-party

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.

September 30, 2025, the Board began evaluating strategic alternatives for the legacy distribution business.

September 30, 2025, the Company initiated an Inventory Monetization Project to accelerate disposition of aged inventory.

On April 2, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation

with the Secretary of State of the State of Delaware to effect a one-for-eight

reverse stock split of the Company’s issued and outstanding shares of Class A common stock, par value $ 0.01

per share, effective April 6, 2026.

As a result of the reverse stock split, every eight shares of Class A common stock issued and outstanding were automatically converted into one share of Class

A common stock, without any change in par value per share.

The reverse stock split did not change the authorized number of shares of Class

A common stock.

No fractional shares were issued in connection with the reverse stock split.

In lieu of fractional shares, stockholders

otherwise entitled to receive a fractional share received a cash payment equal to such fraction multiplied by the closing sales price

of the Class A common stock as reported on the Nasdaq Capital Market on the trading day immediately preceding the effective date of the

reverse stock split.

share and per-share amounts presented in these condensed consolidated financial statements and related notes have been retroactively

adjusted for all periods presented to give effect to the reverse stock split.

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

What changed 10-Q

Item 1. Financial Statements