What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 424 added, 607 removed, 81 unchanged (93% of the section changed)

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and, collectively with the Operating Company and its consolidated subsidiaries, the “Company”, “we”, “us”

and “our”) for the quarterly period ended September 30, 2025 included in Part I, Item 1 of this Quarterly Report on Form

10-Q, and the audited consolidated financial statements and related notes of Greenlane Holdings, Inc.

and “our”) for the quarterly period ended March 31, 2026 included in Part I, Item 1 of this Quarterly Report on Form 10-Q,

and the audited consolidated financial statements and related notes of Greenlane Holdings, Inc.

for the year ended December 31, 2025,

1 unchanged sentence

Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements, within the meaning of the Private Securities

Litigation Reform Act of 1995, , including statements regarding the gradual strategic alternative from the legacy distribution business, the

digital-asset treasury strategy, expected proceeds, fair-value measurement of crypto assets, liquidity, and anticipated costs and timing.

Forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results

to differ materially, including those described under “Risk Factors” and elsewhere in this report.

The Company undertakes

no obligation to update forward-looking statements except as required by law.

of the forward-looking statements are located in Part I, Item 2 of this Form 10-Q under the heading “Management’s Discussion

and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future

events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.

cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,”

“project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,”

“may,” “will,” “should,” “could” and similar expressions.

Examples of forward-looking

statements include, without limitation:

statements regarding our

growth and other strategies, results of operations or liquidity;

statements concerning projections,

predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance;

statements regarding our

statements of management’s

goals and objectives;

statements regarding laws,

regulations, and policies relevant to our business;

projections of revenue,

earnings, capital structure and other financial items;

assumptions underlying

statements regarding us or our business;

other similar expressions

concerning matters that are not historical facts.

Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements, within the meaning of the Private

Securities Litigation Reform Act of 1995, that involve risks and uncertainties that could cause actual results to differ materially, including those described under “Risk Factors”

and elsewhere in this report.

The Company undertakes no obligation to update forward-looking statements except as required by law.

Many of the forward-looking statements are located

in Part I, Item 2 of this Form 10-Q under the heading “Management’s Discussion and Analysis of Financial Condition and

Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions

and include any statement that does not directly relate to any historical or current fact.

In some cases, you can identify

forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,”

“project,” “continuing,” “ongoing,” “expect,” “believe,”

“intend,” “may,” “will,” “should,” “could” and similar expressions.

Examples of forward-looking statements include, without limitation:

possible or assumed future results of operations;

business strategies;

success of our new digital asset treasury policy;

volatile and unpredictable changes in the price of BERA;

expected growth of the BERA ecosystem;

effects of future regulation;

compliance with Nasdaq listing requirements;

competitive position, industry environment and potential growth opportunities;

cash needs and financing plans;

macroeconomic conditions, capital market disruptions, geopolitical developments, inflation, and cryptocurrency volatility;

or additional governmental regulation;

other factors described in the “Risk Factors” section of this Quarterly Report on Form 10-Q and in our Annual Report

on Form 10-K for the year ended December 31, 2025.

Forward-looking

13 unchanged sentences

Report under the heading “Risk Factors.”

our strategy, outlook,

and growth prospects;

general economic trends,

trends in the industry, and the competitive markets in which we operate;

our ability to generate

adequate cash from our existing business to support our growth;

our ability to raise capital

on favorable terms, or at all, to support the continued growth of the business, including high inflation and increasing interest

our dependence on, and

our ability to establish and maintain business relationships with third-party suppliers and service suppliers, including vulnerability

to third-party transportation risks;

our ability to accurately

estimate demand for our products and maintain appropriate levels of inventory;

our ability to maintain

or improve our operating margins and meet sales expectations;

our ability to adapt to

changes in consumer spending and general economic conditions;

our ability to maintain

consumer brand recognition and loyalty of our products;

our ability to protect

our intellectual property rights and use or license certain trademarks;

our ability to successfully

identify and complete strategic acquisitions and/or dispositions;

our ability to address

product defects and contamination of, or damage to, our products;

our exposure to potential

various claims, lawsuits, and administrative proceedings;

our and our customers’

ability to establish or maintain banking relationships;

the impact of governmental

laws and regulations and the outcomes of regulatory or agency proceedings;

our strategy, outlook, and growth prospects;

general economic trends, trends in the industry, and the competitive markets in which we operate;

our ability to raise capital on favorable terms, or at all, to support the continued growth of the business, including high inflation

and increasing interest rates;

the impact of governmental laws and regulations and the outcomes of regulatory or agency proceedings;

fluctuations in U.S.

state, local, and foreign tax obligations and changes in tariffs;

any unfavorable scientific

studies on the long-term health risks of vaporizers, electronic cigarettes, or cannabis and hemp-derived products, including cannabidiol

failure of our information

technology systems to support our current and growing business;

our ability to prevent

and recover from Internet security breaches;

our sensitivity to global

economic conditions and international trade issues;

the onset of an economic

recession in the United States or other countries, including the impact of the ongoing wars, and their impact on the economy generally;

natural disasters, adverse

weather conditions, operating hazards, environmental incidents and labor disputes;

public health crises;

the potential delisting

of our Class A common stock from Nasdaq;

increased costs as a result

of being a public company;

our failure to maintain

adequate internal controls over financial reporting.

federal, state, local, and foreign tax obligations and changes in tariffs;

failure of our information technology systems to support our current and growing business;

our ability to prevent and recover from Internet security breaches;

our sensitivity to global economic conditions and international trade issues;

the onset of an economic recession in the United States or other countries, including the impact of the ongoing wars, and their impact

on the economy generally;

the potential delisting of our Class A common stock from Nasdaq;

increased costs as a result of being a public company;

our failure to maintain adequate internal controls over financial

risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our

6 unchanged sentences

Consequently, you should not place undue reliance on forward-looking statements.

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

lifestyle products.

In addition, it serves specialty retailers, smoke shops, head shops,

convenience stores, and consumers directly through its own proprietary web stores and large online marketplaces such as Amazon.

Greenlane Brands include our more affordable product line – Groove, our premium smoke shop and ancillary product brand –

Higher Standards, and our child-resistant packaging brand - Pollen Gear (the “Greenlane Brands”).

In collaboration with our partner brands, Greenlane is

strategically positioned to serve as a comprehensive one-stop shop for all buyers.

We also have category-exclusive licenses for the

premium Marley Natural branded products.

Greenlane Brands, along with a curated set of third-party products, are offered to customers through our proprietary, owned and operated

e-commerce platforms which include Wholesale.Greenlane.com, Vapor.com, PuffItUp.com, HigherStandards.com, and MarleyNaturalShop.com.

Additionally, our presence on popular e-commerce platforms such as Amazon, Etsy, and eBay enable us to reach customers directly, providing

them with valuable resources and a seamless purchasing experience.

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

We distribute

products to retailers through wholesale operations and distribute products to consumers through constantly evolving e-commerce activities.

We operate our own distribution center in the United States, while also utilizing third-party logistics (“3PL”) locations

We made tremendous progress consolidating and streamlining our warehouse and distribution in 2023 and 2024, including the

consolidations of our warehouse in Worcester, MA and 3PL location in Hebron, KY to our owned facility in Moreno Valley, California in

offers a full spectrum of products, positioning us to meet all our customers’ growing demands.

We focus on serving consumers across

wholesale, retail, and e-commerce operations—offering all of our Greenlane Brands, as well as ancillary products and accessories

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

Our direct-to-consumer channels

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

In addition we serve Cannabis Operators by providing ancillary products essential to their daily operations and growth, such

as packaging and vaporization solutions, including our Greenlane Brand Pollen Gear.

have historically experienced only moderate seasonality in the direct-to-consumer side of our business, particularly during the fourth

This coincides with Cyber Monday (the first Monday after Thanksgiving, when online retailers typically offer holiday discounts),

and as our customers build up their inventories in anticipation of the holiday season.

We also have related promotional marketing campaigns

during this period.

Restructuring

The Company remains committed to minimizing losses and working capital

needs by reducing or eliminating unprofitable activities.

At Greenlane, we are intensely focused on making our business profitable and

well-capitalized for long-term sustainability.

Our key initiatives include:

Technology Enhancements:

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

experience for our wholesale and retail customers.

Facility Footprint Rationalization:

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

and improving fulfillment practices.

The Company continues to evaluate new opportunities.

Headcount Reduction:

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

we collectively right-size the business.

Inventory Management:

2024, we implemented a new inventory management and lifecycle strategy that is focused on a quarterly turn and a regular review of

inventory to avoid future write-offs.

Sales Force Upgrade:

Company recently initiated and recently completed a restructuring of its sales organization to better align people and responsibilities

with the Company’s omnichannel sales strategy, including the addition of new and highly experienced leadership across the board

to foster a return to growth and increased customer success at Greenlane.

The new structure is designed to accelerate sales, improve

customer experience, and increase efficiency throughout the sales process.

Product Innovation:

recently added several new product lines, including pet & wellness product lines, such as the Green Gruff, Safety Strips, and

Swabtek lines.

Capital Investment:

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

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

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

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

2024 and 2025, the Company received capital from various sources permitting it to right-size the business and position the company for

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

placement and liquidity

On October 23, 2025, the Company closed a $110 million private placement

consisting of cash subscriptions and crypto-denominated subscriptions in support of a Bera-focused treasury strategy.

The closing delivered

approximately $24.3 million of net cash proceeds and approximately $19.0 million of stablecoin proceeds, and resulted in holdings of approximately

54.2 million BERA as of October 23, 2025.

These proceeds strengthen near-term liquidity while the Company pursues strategic alternatives

for its legacy distribution business.

The private placement included pre-funded warrants funded in cash and in crypto;

the crypto-funded

pre-funded warrants are exercisable into shares following stockholder approval.

These post-quarter developments do not affect third-quarter

For the full description of terms and instruments, see Note 13, “Subsequent Events,” and the Company’s Current

Report on Form 8-K filed October 20, 2025.

Digital asset treasury strategy and Bera treasury

On October 23, 2025, the Board

approved a treasury policy that designates Bera, the native digital asset of the Berachain network, as the principal asset in the Company’s

corporate treasury reserve.

The Board formed a Digital Assets Committee, chaired by Bruce Linton and including director Billy Levy, to

oversee this policy, and appointed Benjamin Isenberg as Chief Investment Officer to manage the Bera strategy and related controls.

Company intends to accumulate and hold Bera as its principal digital asset;

near-term plans do not include allocating treasury assets

to other digital assets, which increases concentration risk.

Governance and controls include

a two-tier custody model (cold reserve with a small operational wallet), policy-based approvals with two-person release, allowlists, limits,

recovery procedures, and expanded reporting aligned to public-company controls.

The Audit Committee oversees related-party considerations

and reviews policy compliance.

The Digital Assets Committee charter authorizes, among other things:

(i) review and approval of digital-asset

strategy (including staking, validator, and limited decentralized-finance participation);

(ii) monitoring of market and protocol developments;

(iii) evaluation of partnerships and protocol changes;

(iv) review of related-party matters;

(v) oversight of internal controls and reporting

for digital assets;

(vi) risk oversight for market volatility, cybersecurity, and compliance;

(vii) approval of wallet-access, segregation-of-duties,

and operational thresholds;

and (viii) validation of valuation methods and fair-value classifications.

To manage price risk, the

Company may selectively use hedging instruments such as options, swaps, or futures with institutional-grade counterparties, subject to

availability and cost.

The Company may engage in on-chain activities in a controlled manner, including staking, limited validator operations,

and measured decentralized-finance participation, subject to legal, compliance, and control requirements.

Beginning in the fourth quarter

of 2025, in-scope crypto assets are measured at fair value with changes recognized in earnings under Accounting Standards Update 2023-08.

Fair value measurement follows Accounting Standards Codification Topic 820, including principal-market determinations, pricing controls,

and fair-value hierarchy disclosures.

These requirements may introduce earnings volatility.

A more detailed description of risks related

to pricing volatility, custody, valuation, and regulation appears in Part II, Item 1A “Risk Factors.” Additional information

about post-quarter activity and policy governance is provided in Note 13, “Subsequent Events,” and in the Company’s

Current Report on Form 8-K filed October 20, 2025.

considerations

Key risks include volatility in BERA prices, custody and operational risks,

counterparty risk for stablecoins and protocols, regulatory changes, and potential dilution from warrant exercises associated with the

We have implemented controls to mitigate these risks;

however, market conditions may cause results to differ from expectations.

See Part II, Item 1A “Risk Factors”.

Related-party

Transformation Overview

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

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

Historically,

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

During 2025, the Company materially reduced

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

drop-ship model.

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

influenced by digital asset activity.

On June 26, 2025 and April 6, 2026, the Company completed reverse stock splits to maintain compliance with Nasdaq

listing requirements.

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

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

Transaction consideration

consisted of cash, U.S.

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

digital asset treasury strategy while also supporting residual legacy operations.

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

value accounting for digital assets.

Holdings, Inc.

is a publicly traded company with a digital asset treasury strategy focused on the acquisition,

management, and strategic deployment of BERA, the native token of the Berachain blockchain network.

of March 31, 2026, a substantial majority of the Company’s balance sheet consisted of digital assets and U.S.

dollar cash and dollar-pegged

stablecoins, which are classified within cash and cash equivalents on the consolidated balance sheets.

The Company’s financial condition,

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

fair value of its BERA holdings.

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

through vapor.com and related channels.

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

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

Transformation

historically operated as a distributor of lifestyle accessories and consumer products.

Beginning in October 2025, management executed

a strategic transformation following the closing of a $110.7 million private investment in public equity transaction led by crypto-native

investors and supported by the Berachain Foundation (the “BERA Private Placement”).

BERA Private Placement provided the capital foundation for the new digital asset treasury strategy (the “BERA Strategy”).

In connection

with the transaction:

The Company received cash and stablecoin proceeds and BERA tokens.

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

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

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

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

a digital asset treasury strategy.

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

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

BERA Strategy

Company has implemented a treasury policy that sets guidelines for digital asset diversification, liquidity, and risk management, and

is overseen by the Board’s Digital Asset Committee.

The Company’s digital asset treasury strategy, subject to these guidelines,

consists of five core components:

Capital Deployment

Company seeks to deploy capital raised through equity offerings and other transactions to acquire BERA through open market purchases

or negotiated transactions.

Capital deployment is governed by a disciplined strategy aimed at increasing long-term BERA-per-share.

Network Participation

Company participates in Berachain’s Proof of Liquidity (“PoL”) consensus mechanism through staking and validator infrastructure.

These activities may generate staking rewards denominated in BERA, which are variable and not guaranteed.

Governance Participation

ongoing participation in the Berachain ecosystem, the Company may earn Berachain Governance Token (“BGT”), a non-transferable

governance token.

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

The Company does not control

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

Risk-Adjusted Yield Participation

Company may selectively deploy BERA or stablecoins into decentralized finance (“DeFi”) protocols within the Berachain ecosystem,

subject to internal risk controls.

Such activities involve smart contract risk, liquidity risk, counterparty risk, and regulatory uncertainty.

Capital Allocation Discipline

Company may pursue strategic initiatives aligned with its digital asset treasury model, including validator partnerships, infrastructure

investments, and capital markets transactions intended to enhance net asset value per share.

There can be no assurance that such initiatives

will generate positive returns.

and the Berachain Ecosystem

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

with Ethereum tooling, smart contracts, and infrastructure.

Berachain utilizes a novel PoL consensus mechanism that integrates network security with active liquidity provisioning.

BERA is the native digital asset of the Berachain network and is

used for transaction fees, staking, validator participation, and ecosystem incentives.

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

uncertainty, and technological risk.

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

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

Protocol parameters,

incentive structures, and token mechanics may change over time.

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

There can be no assurance that the Berachain ecosystem

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

Holdings and Liquidity

Company’s liquidity is primarily derived from cash and cash equivalents on hand and is supplemented by digital asset holdings,

which are subject to market volatility and liquidity constraints.

of December 31, 2025, the Company’s treasury holdings consisted of BERA, cash, and U.S.

dollar-denominated stablecoins.

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

dollars and subject to insignificant risk of changes in value are classified as cash equivalents.

Stablecoins and stablecoin-related

instruments deployed into DeFi 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.

connection with the October 2025 PIPE transaction, the Company agreed to certain contractual transfer restrictions on a portion of

its BERA holdings.

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

been implemented, and the Company retained the ability to utilize such BERA for staking and other activities.

An operational lockup

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

Management concluded that,

as of December 31, 2025, these contractual provisions did not impact the fair value measurement or classification of the

Company’s BERA holdings.

Distribution Business

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

direct-to-consumer channels.

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

legacy business is currently managed to preserve liquidity and fulfill contractual obligations.

The Company does not currently prioritize

expansion of this segment.

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

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

Considerations

Chief Investment Officer’s background and outside digital asset activities have been disclosed.

Management has implemented segregation

of duties, dual-authorization controls, and oversight through the Digital Assets Committee.

The Company will monitor and disclose any

material related-party transactions in future filings.

regulatory framework for digital assets remains evolving and uncertain.

For a discussion of risks related to digital assets and the Company’s operations, see “Risk Factors”

in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of the Company’s Annual Report on Form 10-K for the

year ended December 31, 2025.

June 26, 2025, we filed a Certificate of Amendment to the A&R Charter with the Secretary of State for the State of Delaware (“SSSD”),

which effected a one-for-seven hundred and fifty (1-for-750) reverse stock split (the “2025 Reverse Stock Split”) of our

issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 26, 2025.

As a result of the 2025 Reverse Stock Split,

every seven hundred and fifty shares of common stock issued and outstanding were converted into one share of common stock.

fractional shares we rounded up to the next whole share, and accordingly, no fractional shares were issued in connection with the 2025

Reverse Stock Split.

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

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

The number of

shares available to be awarded under our Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted.

8 — Stockholders’ Equity” for more information.

April 2, 2026, we filed a Certificate of Amendment to the A&R Charter with the Secretary of State of the State of Delaware,

which effected a one-for-eight reverse stock split of our issued and outstanding shares of Common Stock, effective April 6, 2026 (the “2026 Reverse Stock Split, and, together with the 2025 Reverse

Stock Split, the “Reverse Stock Splits”).

As a result of the 2026 Reverse Stock Split, every eight shares of Common Stock issued and outstanding were converted into one share

of Common Stock.

No fractional shares were issued in connection with the 2026 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 Common Stock as reported on the Nasdaq Capital Market on the trading day immediately preceding the

effective date of the 2026 Reverse Stock Split.

All share and per-share amounts presented in this Quarterly Report have been retroactively adjusted for all periods

presented to give effect to the Reverse Stock Splits.

Nasdaq Minimum Bid Price Compliance

On March 25, 2026, Greenlane Holdings,

(the “Company”) received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department

of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that Nasdaq staff had determined to delist the Company’s Class

A common stock, par value $0.01 per share (the “Common Stock”) from the Nasdaq Capital Market since it failed to maintain

a minimum bid price of $1.00 per share for 30 consecutive business days, in violation of Nasdaq Listing Rule 5550(a)(2).

The Company requested

a hearing, which stayed the suspension of trading pending the outcome of the hearing.

On April 21, 2026, the Company

was notified by Nasdaq that the Company has regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule

5550(a)(2) and that the Company is therefore in compliance with the Nasdaq Capital Market’s listing requirements.

As a result, the Company’s hearing that had been scheduled for May 5, 2026, has been cancelled, and this matter

is now closed.

The Common Stock will continue to be listed and traded on The Nasdaq Capital Market.

Accounting Estimates

prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America

The preparation of these financial statements requires us to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,

and the reported amounts of revenue and expenses during the reporting period.

We evaluate our estimates and assumptions on an ongoing

We base our estimates on historical experience, outside advice from parties believed to be experts in such matters, and on various

other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying value of assets and liabilities that are not readily apparent from other sources.

Judgments and uncertainties affecting

the application of those policies may result in materially different amounts being reported under different conditions or using different

See “Note 2—Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements

included in Part II, Item 8 of this Form 10-K for a description the significant accounting policies and methods used in the preparation

of our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-08 (ASC 350-60) requiring

in-scope crypto assets to be measured at fair value with changes in net income and presented separately, with enhanced disclosures under

The standard is effective for fiscal years beginning after December 15, 2024, including interim periods.

We adopted the standard

effective January 1, 2025.

The Company did not hold crypto assets as of September 30, 2025;

therefore no crypto-related balances or results

are recorded in Q3.

Beginning in Q4 2025, we expect earnings volatility from fair-value changes and will provide ASC 820 hierarchy, valuation,

and sensitivity disclosures, together with custody and pricing-control updates.

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

net realizable value.

This valuation requires us to make judgments, based on currently available information, about the likely method

of disposition, such as through sales to customers or liquidations.

Assumptions about the future disposition of inventory are inherently

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

Taxes and TRA Liability

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

Certain subsidiaries of the Operating Company are taxable separately

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

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

As a result, in 2023,

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

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

result in taxable or deductible amounts in the future.

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

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

A valuation allowance is recognized for deferred tax assets

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

In making such a determination,

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

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

If we determine we would be able to realize our deferred

tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which

would reduce our provision for income taxes.

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

to identify uncertain tax positions.

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

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

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

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

Interest and penalties related to unrecognized tax benefits are recorded

in income tax benefit.

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

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

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

Pursuant to the Greenlane Operating Agreement, Greenlane Holdings, LLC

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

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

prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of

America (“U.S.

The preparation of these financial statements requires us to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

financial statements, and the reported amounts of revenue and expenses during the reporting period.

We evaluate our estimates and

assumptions on an ongoing basis.

We base our estimates on historical experience, outside advice from parties believed to be experts

in such matters, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which

form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

Judgments and uncertainties affecting the application of those policies may result in materially different amounts being

reported under different conditions or using different assumptions.

See “Note 2—Summary of Significant Accounting

Policies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for a description of

the significant accounting policies and methods used in the preparation of our consolidated financial statements.

value measurement of digital assets

in the fourth quarter of 2025, crypto assets within the scope of ASU 2023-08 are measured at fair value with changes recognized in earnings.

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

When such prices are not available,

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

Management applies judgment in determining the principal market and evaluates the reliability of pricing sources, including volume, accessibility,

and consistency across exchanges.

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

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

Company also maintains supporting schedules of significant crypto assets and performs daily to monthly reconciliations between wallet

activity and the general ledger.

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

dollars are classified

as cash equivalents based on management’s assessment of their high liquidity, short-term nature, and minimal risk of changes in

This classification reflects the Company’s conclusion that such holdings are economically equivalent to cash and are used

in treasury management activities.

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

this classification.

Stablecoins and stablecoin-related instruments deployed into decentralized finance (“DeFi”) 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 separately based on their nature and risk profile.

asset fair value adjustments are non-cash and may significantly impact reported net income independent of operating performance of the

wholesale and distribution segment.

Contingencies

17 unchanged sentences

See “Note 5—Commitments

and Contingencies” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for additional

and Contingencies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for additional

information regarding these contingencies.

value measurement of crypto assets

in Q4 2025, crypto assets within the scope of ASU 2023-08 are measured at fair value with changes recognized in earnings.

judgments include identification of the principal market, selection of pricing sources, fair value hierarchy classification, and controls

over period-end pricing.

The Company obtains observable prices from principal markets when available and uses alternative sources if

principal market data are temporarily unavailable.

The Company also prepares a roll-forward of significant crypto assets and performs

daily to monthly reconciliations between wallet activity and the general ledger.

Because crypto markets can be volatile and fragmented,

different assumptions or market conditions could materially affect reported results.

Accounting Pronouncements

“Note 2—Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Part

II, Item 8 of our Form 10-K filed on March 21, 2025.

See “Note 2 — Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated

Financial Statements included in Part I, Item 1 of this Form 10-Q for a description of the significant accounting policies and methods

used in the preparation of our condensed consolidated financial statements.

of Operations

following table presents operating results for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

% of Net sales

following table presents operating results for the three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31,

% of Net revenue

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

2 unchanged sentences

Other income (expense), net:

Interest expense

Other income, net

Interest income (expense), net

Change in fair value of digital assets

Other income (expense), net

Total other income (expense), net

Loss before income taxes

Provision for income taxes

Provision for (benefit from) income taxes

Net income attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

Results of Operations

For the three months ended September 30, 2025, net sales were approximately

$0.7 million, compared to approximately $4.0 million for the same period in 2024, representing a decrease of $3.3 million, or 82%.

recent reorganization of the sales team and the challenges of recruiting a stronger sales team in 2025 negatively impacted sales in the

first half of the year.

in the fourth quarter of 2025, the Company’s results reflect two reportable segments:

the Wholesale and Distribution Segment and

the Digital Asset Segment.

Net revenue includes both net sales from the Company’s legacy wholesale and distribution business and

staking revenue generated from the Company’s digital asset treasury activities.

Cost of sales relates to the Wholesale and Distribution

Segment, as staking revenue from the Digital Asset Segment does not currently have associated cost of revenue.

Operating expenses are

reviewed by management by reportable segment, as further described in “Note 11 — Segment Reporting.”

Asset Operations

Beginning in October 2025, the Company transitioned to a digital asset treasury strategy following a $110.7 million

private investment in public equity transaction, which included cash, stablecoins, and BERA, the principal token of the Berachain ecosystem.

During the remainder of 2025 and the three months ended March 31, 2026, the Company deployed a portion of its cash and stablecoin balances

to acquire additional BERA.

During the fourth quarter of 2025 and into the first quarter of 2026, digital asset markets experienced broad-based

volatility and price declines.

The Company’s BERA holdings were also impacted by market volatility.

For the three months ended March

31, 2026, the Company recognized a fair value loss on digital assets of approximately $12.9 million.

The Company also recognized approximately

$0.4 million of staking revenue during the period.

Wholesale and Distribution Operations

During 2025, the Company reduced the scale of its warehouse-based wholesale and distribution activities and transitioned

the remaining commerce business to an asset-light, drop-ship model supported by its existing e-commerce platform, vapor.com.

continues to operate this business, but at a reduced scale compared to the prior-year period.

the three months ended March 31, 2026, net revenue was approximately $0.4 million, compared to approximately $1.5 million for the

same period in 2025, representing a decrease of approximately $1.0 million, or 70%.

Net revenue for the three months ended March 31,

2026 included approximately $27 thousand of net sales from the Wholesale and Distribution Segment and approximately $417 thousand of

staking revenue from the Digital Asset Segment.

The year-over-year decrease was primarily attributable to lower sales volume,

reduced inventory availability, and the transition of the legacy business to a lower-scale operating model, partially offset by

staking revenue generated from the Digital Asset Segment.

See “Note 11 — Segment Reporting” for additional

of Sales and Gross Margin

For the three months ended September 30, 2025, cost of sales increased

by $4.8 million, or 478%, as compared to the same period in 2024.

Management completed a comprehensive review of inventory aging and realizability

in connection with the Company’s transition under the Bera initiative toward a capital-light, IP-driven operating model.

the Company recorded a $5.0 million non-cash inventory reserve to reflect expected recoveries from legacy product lines.

margins decreased by 269% to (692)% for the three months ended September 30, 2025, compared to 75% for the same period in 2024.

in gross margins can be attributed to write-offs of slow moving inventory.

the three months ended March 31, 2026, cost of sales was approximately $0.2 million, compared to approximately $0.7 million for the

same period in 2025, representing a decrease of approximately $0.5 million, or 69%.

Cost of sales for both periods related

exclusively to the Wholesale and Distribution Segment and did not include costs associated with staking revenue from the Digital Asset Segment.

The decrease was primarily driven by lower legacy wholesale and distribution

sales volume and the Company’s transition to a reduced-scale, asset-light operating model.

gross margin was approximately 48% for the three months ended March 31, 2026, compared to approximately 49% for the same period in 2025.

The consolidated gross margin percentage reflects the inclusion of approximately $421 thousand of staking revenue from the Digital Asset

Segment, which does not currently have associated cost of revenue, together with the reduced-scale Wholesale and Distribution Segment,

which generated approximately $27 thousand of net revenue and approximately $231 thousand of cost of sales.

Accordingly, consolidated

gross margin is not directly comparable to the gross margin of the legacy wholesale and distribution busin ess on a stand-alone

See “Note 11 — Segment Reporting” for additional information.

Benefits and Payroll Taxes

benefits and payroll taxes expenses were approximately $1.5 million for the three months ended September 30, 2025, compared to $1.6 million

for the same period in 2024.

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

we continue to closely monitor the evolving business landscape, we remain focused on identifying cost-saving opportunities while delivering

on our strategy to recruit, train, promote and retain the most talented and success-driven personnel in the industry.

Salaries, benefits and payroll taxes were approximately $1.4 million for the three months ended March 31, 2026, compared

to approximately $1.3 million for the same period in 2025.

The increase was primarily attributable to stock-based compensation expense

related to employee equity awards granted in October 2025, partially offset by lower headcount and reduced legacy operating activity.

based compensation – strategic advisory warrants

Stock-based compensation expense related to strategic advisory warrants was approximately $0.2 million for the three

months ended March 31, 2026, compared to $0 for the same period in 2025.

The increase was attributable to strategic advisory warrants

issued in connection with the Company’s digital asset treasury transition.

These awards are accounted for under ASC 718, and the

related grant-date fair value is recognized over the applicable service periods.

The expense is non-cash in nature and is presented separately

within operating expenses.

and Administrative Expenses

and administrative expenses were approximately $2.0 million for the three months ended September 30, 2025, compared to $1.8 million for

the same period in 2024.

The increase is related increases in professional and outside services, facility expenses, outbound freight,

other general and administrative, marketing and general insurance.

Restructuring

Restructuring and transformation costs were $0.5 million for the three

months ended September 30, 2025, primarily related to personnel actions under the Company’s cost reduction strategy and the strategic

transition to a crypto treasury model.

and Amortization Expense

and amortization expense were approximately $0.1 million for the three months ended September 30, 2025, compared to $0.2 million for

the same period in 2024.

Depreciation remained relatively constant as additions and deletions were insignificant.

Income (Expense), Net

expense decreased approximately $3.2 million for the three months ended September 30, 2025 compared to the same period in 2024.

is primarily related to reduction in overall debt as all of the Company’s debt was repaid in February 2025.

expense, net.

income, net, increased by approximately $0.2 million for the three months ended September 30, 2025, compared to the same period in 2024.

The change is primarily due miscellaneous income in the current year.

for (Benefit from) Income Taxes

the three months ended September 30, 2025 and 2024, respectively, the effective tax rate differed from the U.S.

federal statutory tax

rate of 21% primarily due to the Operating Company’s pass-through structure for U.S.

income tax purposes, the relative mix in earnings

and losses in the U.S.

versus foreign tax jurisdictions, and the full valuation allowance against the deferred tax asset.

Results of Operations

Nine Months Ended September 30,

% of Net sales

Cost of sales

Gross profit (loss)

Operating expenses:

Salaries, benefits and payroll taxes

General and administrative

Restructuring expenses

Depreciation and amortization

Total operating expenses

Loss from operations

Other income (expense), net:

Interest expense

Change in fair value of contingent consideration

Gain on extinguishment of debt

Other income, net

Total other income (expense), net

Loss before income taxes

Provision for income taxes

For the nine months ended September 30, 2025, net sales were approximately

$3.0 million, compared to approximately $11.6 million for the same period in 2024, representing a decrease of $8.6 million, or 74%.

recent reorganization of the sales team and the challenges of recruiting a stronger sales team in 2025 negatively impacted sales in the

first half of the year.

of Sales and Gross Margin

For the nine months ended September 30, 2025, cost of sales increased by

$1.3 million, or 22%, as compared to the same period in 2024.

The increase was driven by the increase of supplier chain costs and the

$5.0 million increase in inventory reserves.

Management completed a comprehensive review of inventory aging and realizability in connection

with the Company’s transition under the Bera initiative toward a capital-light, IP-driven operating model.

As a result, the Company

recorded a $5.0 million non-cash inventory reserve to reflect expected recoveries from legacy product lines.

Gross margin declined from 48% to (146)%, a decrease of 194 percentage

points, primarily due to the $5.0 million non-cash inventory reserve noted above.

Benefits and Payroll Taxes

benefits and payroll taxes expenses were approximately $3.8 million for the nine months ended September 30, 2025, compared to $6.1 million

for the same period in 2024.

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

we continue to closely monitor the evolving business landscape, we remain focused on identifying cost-saving opportunities while delivering

on our strategy to recruit, train, promote and retain the most talented and success-driven personnel in the industry.

and Administrative Expenses

and administrative expenses were approximately $6.6 million for the nine months ended September 30, 2025, compared to $6.9 million for

the same period in 2024.

The decrease is related increases in professional and outside services, facility expenses, outbound freight,

other general and administrative, marketing and general insurance.

Restructuring Expenses

Restructuring and transformation costs were $0.5 million for the nine months ended September 30, 2025, primarily related to personnel

actions under the Company’s cost reduction strategy and the strategic transition to a crypto treasury model.

expenses were approximately $4.0 million for the three months ended March 31, 2026, compared to approximately $2.8 million for the same

period in 2025.

The increase was primarily attributable to higher legal, professional, advisory, insurance and public company costs.

The 2026 period included approximately $2.3 million of elevated legal, professional, and advisory costs related to Nasdaq compliance

and delisting appeal matters, reverse stock split activities, employment and compensation matters, legacy facility exits, and the termination

of the new facility lease.

These costs were elevated during the period and are not expected to recur at the same level in future periods.

and Amortization Expense

Depreciation and amortization expense were approximately $0.4 million for

the nine months ended September 30, 2025, compared to $0.6 million for the same period in 2024.

Depreciation remained relatively constant

as additions and deletions were insignificant.

Depreciation and amortization expense was approximately $0.1 million for each of the three months ended March 31,

2026 and 2025.

Depreciation and amortization expense remained relatively consistent year over year as there were no significant additions

to fixed assets during the period.

Interest income (expense), net

Interest income, net was approximately

$34 thousand for the three months ended March 31, 2026, compared to approximately $0.4 million interest expense for the same period in

The improvement was primarily attributable to the repayment of the Company’s outstanding debt in February 2025.

in fair value of digital assets

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

These assets are remeasured

to fair value at the end of each reporting period, with changes recognized in earnings.

For the three months ended March 31, 2026, the

Company recognized a fair value loss of approximately $12.9 million, primarily driven by market fluctuations in BERA.

As of March 31,

2026, the fair value of digital assets on the condensed consolidated balance sheet was approximately $34.2 million.

Income (Expense), Net

expense decreased approximately $3.6 million for the nine months ended September 30, 2025 compared to the same period in 2024.

is primarily related to reduction in overall debt as all of the Company’s debt was repaid in February 2025.

in fair value of contingent consideration

was a change in fair value of contingent consideration of approximately none for the nine months ended September 30, 2025 compared to

$1.0 million for the same period in 2024.

the Company recorded a fair value change of $1.0 million associated with a reduction in earn

outs for Eyce and DaVinci products.

on debt extinguishment

was a decrease in gain on debt extinguishment of approximately none for the nine months ended September 30, 2025, compared to $2.2 million

for the same periods in 2024.

The change is primarily related to a difference in the reduction in overall debt modification with Synergy,

offset by the carrying value of the Davinci and Eyce assets acquired by Synergy.

income, net, increased by approximately $0.1 million for the nine months ended September 30, 2025, compared to the same period in 2024.

The change is primarily due miscellaneous income in the current year.

for (Benefit from) Income Taxes

the three months ended September 30, 2025 and 2024, respectively, the effective tax rate differed from the U.S.

federal statutory tax

rate of 21% primarily due to the Operating Company’s pass-through structure for U.S.

income tax purposes, the relative mix in earnings

and losses in the U.S.

versus foreign tax jurisdictions, and the full valuation allowance against the deferred tax asset.

Capital Resources 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 equity issuances such as our July 2023,

August 2024, and February 2025 Offerings, each as described and defined below.

Liquidity overview

At September 30, 2025, we had

cash and cash equivalents of $1.8 million and no borrowings outstanding.

After quarter end, we closed a private placement described in

the Current Report on Form 8-K filed October 20, 2025.

Net proceeds increased liquidity in cash and digital assets.

See “Subsequent

events” in Note 13 of this Form 10-Q and the Current Report on Form 8-K filed October 20, 2025 for offering terms and use of proceeds.

We expect fair-value

accounting for crypto assets to introduce variability beginning in Q4 2025;

controls to manage liquidity include qualified custody, two-person

approvals, and daily monitoring.

Near-term priorities are executing the inventory monetization project,

maintaining core capabilities that support the Board’s evaluation of strategic alternatives for the legacy distribution business

and related assets, and advancing the Company’s digital-asset strategy and treasury operations.

Program and Shelf Registration Statement

We maintained a shelf registration

on Form S-3 and an at-the-market equity program from August 2021 through December 31, 2022, under which we sold $12.7 million of Class

A common stock and paid $0.4 million in agent fees.

We made no at-the-market sales in 2024 or 2025.

The prior shelf is not currently available;

any future at-the-market activity would require a new Form S-3.

This historical activity affects the prior-period liquidity discussion

only and does not affect third-quarter 2025 results.

Stock and Warrant Offerings

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

for aggregate gross cash proceeds of $6.5 million.

In connection with the private placement, the Company 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 was exercisable on the initial

exercise date described in the common warrant and will expire 5.0 years from such date.

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

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

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

indebtedness by approximately $617,000.

The Exchange Note was convertible at the option of the holder at $2,378 per share.

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

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

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

price of $2,280, exercisable 180 days after issuance (the “Exchange Inducement Warrants”).

The Exchange Inducement Warrants

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

Warrants”) for cash, which existing warrants have an exercise price of $1.875 per share.

The Exchange Inducement Warrants are initially

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

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

exercised for cash during such inducement period.

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

to $892.50 per share.

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

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

and certain other conditions.

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

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

The Cobra Note was repaid out of the February 2025

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

$25.0 million of shares of the Company’s Class A common stock (“Common Stock” and investor warrants at a price of $892.50

per Common Unit.

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

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

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

of $1,115.63 (“Series A Warrant”) and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of Common Stock

per warrant at an exercise price of $2,231.25 (“Series B Warrant” and together with the Series A Warrant, the “Warrants”).

The initial exercise price of each Series A Warrant is $1,115.63 per share of Common Stock.

The Series A Warrants are exercisable following

stockholder approval and expire five (5) years thereafter.

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

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

The initial exercise price of each Series B Warrant is $2,231.25 per

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

The Series B Warrants are exercisable following stockholder

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

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

to adjustment as described in the Series B Warrant.

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

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

Under such Exchange Agreement,

such Holders agreed to exchange with the Company such existing warrants for approximately 8,172 new warrants to purchase common stock,

substantially in the form of the Series B Warrants.

Receivable and Collectability

receivable remained broadly consistent with December 31, 2024 despite reduced sales activity in the quarter.

We monitor credit risk through

weekly aging reviews;

during periods of limited sales activity we perform targeted collectability assessments by customer and aging bucket,

and we adjust the allowance for credit losses when facts and circumstances indicate heightened loss risk.

We will update the allowance

prospectively if the aging profile deteriorates or if specific collectability concerns arise.

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

As of December 31, 2024,

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

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

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

Pursuant to the Note Amendment, Cobra agreed to extend the Maturity

Date of its senior promissory note dated May 1, 2024, which is currently due.

The new Maturity Date will be October 29, 2025.

In consideration

for the extension, the Company (i) agreed to make such Notes convertible at the option of Cobra with a conversion price of $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 five-year warrants with an exercise price of $2,280 per share

which are identical to the Exchange Warrants.

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

an effort to minimize losses and working-capital needs, management is focusing on cost controls, simplifying operations, and monetizing

legacy assets while the Board considers strategic alternatives for the legacy distribution business.

actions after quarter-end

October 23, 2025, the Company closed a private placement that provided approximately $24.3 million of net cash, approximately $19.0 million

of stablecoin proceeds, and resulted in holdings of approximately 54.2 million BERA.

These proceeds strengthen near-term liquidity and

support the Company’s digital-asset treasury strategy.

See “Subsequent events.”

monetization and working-capital discipline

is executing a structured monetization program to convert legacy inventory to cash, informed by recent recovery experience and market

In the third quarter, the Company increased its inventory reserve by $5.0 million to reflect lower expected recovery on certain

aged and discontinued items.

Purchasing remains tightly controlled, and vendor terms and returns/allowances are being actively renegotiated

to accelerate cash conversion.

cost reductions and footprint simplification

mid-year, the Company has consolidated facilities, streamlined its e-commerce platforms, resized the sales organization, and reduced third-party

Additional reductions are underway to align the cost base with the smaller legacy footprint and the go-forward operating model.

focus and brand support

Company launched on the Mainstem B2B marketplace and engaged Cannabis Creative Group to drive targeted acquisition and re-engagement of

wholesale customers.

During 2025, the Company also entered distribution arrangements with Greentank Technologies and ALD Group Limited

and renewed focus on selective partner brands, including Green Gruff.

and controls for the digital-asset treasury

October 2025, the Board formed a Digital Assets Committee and approved a treasury policy that prioritizes BERA as the principal digital

Management is implementing two-tier custody, dual-authorization wallet controls, and expanded reporting to support public-company

requirements.

See “Risk Factors” and “Controls and Procedures.”

vendor and systems rationalization

Company continues to renegotiate supplier terms, consolidate technology tools, and evaluate a lower-cost finance system appropriate for

a public company without warehouse operations, with the goal of reducing recurring systems expense and complexity.

incurred net losses of $9.0 million and $16.1 million for the three and nine months ended September 30, 2025, respectively.

in operating activities for the nine months ended September 30, 2025 was $11.8 million.

The recent macroeconomic environment has pressured

demand versus plan, reducing projected revenue and cash flows used in the going-concern evaluation.

on cash on hand (including the October 2025 private placement proceeds), expected cash generation from the inventory monetization program,

and the cost-reduction initiatives described above, management currently believes the Company has sufficient liquidity to fund working-capital

needs, capital expenditures, and scheduled obligations for at least the next 12 months.

Execution risks remain, and the Company may seek

additional capital depending on timing of monetization receipts, market conditions, and strategic opportunities.

actions over the next twelve months include, without limitation:

further operating-expense reductions to align costs with the smaller legacy footprint;

continued monetization of legacy inventory and improvements in vendor terms;

focused commercial activity on profitable customers and products;

disciplined execution of the digital-asset treasury policy with appropriate controls;

opportunistic capital raising if warranted by liquidity or strategy.

Our opinions concerning liquidity are based on currently available information.

To the extent this information proves to be inaccurate,

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

adversely affected.

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

in the section titled “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements

on terms favorable to us, or at all.

of September 30, 2025, we did not have any off-balance-sheet arrangements that are reasonably likely to have a material current or future

effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.

income (expense), net was an expense of approximately $0.2 million for the three months ended March 31, 2026, compared to

approximately $0 for the same period in 2025.

The increase in expense was primarily attributable to foreign currency remeasurement

and related legacy balance sheet cleanup activity.

and Capital Resources

of March 31, 2026, the Company had approximately $13.3 million of cash and cash equivalents, $4.0 million in stablecoin-related

instruments, $34.2 million in digital asset holdings, and working capital of approximately $13.8 million, compared to $32.5 million

of cash and cash equivalents and working capital of approximately $28.9 million as of December 31, 2025.

The decrease in

working capital was primarily attributable to cash used in operations and purchases of digital assets during the quarter.

Company’s primary sources of liquidity to meet near-term operating needs are cash and cash equivalents, including qualifying U.S.

dollar-denominated stablecoins,

and proceeds from equity issuances.

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

cash equivalents and presented based on their nature and risk profile.

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

assets into cash at expected values or within desired timeframes.

Company had no outstanding debt as of March 31, 2026.

The Company may opportunistically access capital markets, including through its

at-the-market offering program, but management does not believe the Company is dependent on additional financing to meet its near-term

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

in the aggregate.

The Company’s liquidity may be impacted by fluctuations in digital asset prices, timing of capital deployment,

and other risks described in “Risk Factors.”

January 7, 2026, the Company entered into a Sales Agreement with Yorkville Securities, LLC pursuant to which the Company may, from time

to time, offer and sell shares of its Class A common stock through or to Yorkville, acting as sales agent or principal.

On January 7,

2026, the Company filed a prospectus supplement in connection with the ATM Offering for up to $5.4 million of shares of Class A common

As of the date of this Quarterly Report, the Company has not made any sales under the ATM Offering.

During the first quarter of

2026, the Company continued executing its digital asset treasury strategy.

In connection with this strategy, the Company entered into

token purchase and lending arrangements with Berachain Operations Corporation to facilitate BERA acquisition activity.

The Company’s

maximum exposure under the lending arrangement during the quarter was $5.0 million, of which approximately $0.2 million remained outstanding

as of March 31, 2026.

The Company monitors these arrangements through its digital asset governance framework, including Digital Assets

Committee oversight and related-party review procedures.

Outlook and Going Concern

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

Based on the Company’s current cash position, cash equivalents, digital asset holdings, and expected operating cash flows, management

believes that there is no substantial doubt about the Company’s ability to continue as a going concern for at least twelve months

from the date of issuance of these condensed consolidated financial statements.

On April 7, 2026, the board of directors of the Company authorized the repurchase by the Company of up to $2 million

of the Company’s outstanding shares of Class A common stock (the “Repurchase Plan”).

The Company may buy back its shares

of Class A common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market

conditions, pursuant to Rule 10b-18 of the Exchange Act, and federal and state laws governing such transactions, through a variety of

methods, which may include open market purchases, privately negotiated transactions, block trades, or one or more trading plans adopted

in accordance with Rule 10b5-1 of the SEC or by any combination of such methods.

The Repurchase Program does not oblige the Company to

acquire any specific number of shares or any shares at all, and may be modified, discontinued, or suspended at any time.

As of the date

hereof, the Company has not made any repurchases under the Repurchase Plan.

Company’s near-term focus is maintaining liquidity, executing its digital asset treasury strategy, and aligning operating

costs against its current business model.

The Company may seek additional capital opportunistically depending on market conditions

and strategic priorities.

As of March 31, 2026, the Company did not have any off-balance sheet arrangements that are reasonably likely to have

a material effect on its financial condition, results of operations, or liquidity.

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

elsewhere in this Quarterly Report on Form 10-Q:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Net cash provided by financing activities

Cash Used in Operating Activities

During the nine months ended September 30, 2025, net cash used in operating

activities of approximately $11.8 million consisted of (i) net loss of $16.0 million, offset by non-cash adjustments to net loss of approximately

$1.4 million, and (ii) a $2.8 million overall decrease in working capital primarily driven by increases in accounts receivable offset

by decreases in inventory, vendor deposits, other current assets, accounts payable and accrued expenses and customer deposits.

the nine months ended September 30, 2024, net cash used in operating activities of $5.2 million consisted of a net loss of $8.8 million,

offset partially by non-cash adjustments to the net loss of $1.0 million and a $1.2 million decrease in working capital driven by decreases

in inventories of $4.2 million and decreases in accrued expenses of $0.5 million reduced by a decrease in customer deposits of $1.5 million

and an increase in accounts receivable of $0.7 million.

Cash (Used in) Provided by Operating Activities

During the three months ended

March 31, 2026, net cash used in operating activities was approximately $4.8 million.

Operating cash use was primarily driven by the Company’s

net loss of $18.2 million, adjusted for non-cash items, including the $12.9 million fair value loss on digital assets, stock-based compensation,

depreciation and amortization, and changes in working capital.

During the three months ended March 31, 2025, net cash used in operating activities was approximately $3.4 million,

primarily driven by the Company’s net loss of $3.9 million, adjusted for non-cash items and changes in working capital.

Cash Used in Investing Activities

the nine months ended September 30, 2025, net cash used in investing activities of approximately $0.1 million consisted primarily of

capital expenditures.

the nine months ended September 30, 2024, net cash used in investing activities of approximately $0.2 million consisted primarily of

capital expenditures.

During the three months ended

March 31, 2026, net cash used in investing activities was approximately $14.4 million, primarily related to purchases of digital assets

and stablecoin-related protocol instruments as part of the Company’s digital asset treasury strategy.

During the three months ended March 31, 2025, net cash used in investing activities was approximately $16,000, primarily

related to capital expenditures.

Cash Provided by Financing Activities

the nine months ended September 30, 2025, net cash provided by financing activities of approximately $12.8 million primarily

consisted of approximately $20.7 million in proceeds from our February 2025 private placement offset by $8.0 million in payments on

the nine months ended September 30, 2024, net cash provided by financing activities of approximately $7.2 million primarily consisted

of approximately $0.9 million in payments on loans against future accounts receivable, approximately $0.2 million in proceeds from future

receivables financing, approximately $2.1 million in proceeds from notes payable, $3.0 in repayments on notes payable, and $5.6 million

in net proceeds from the issuance of common stock.

Accounting Policies and Estimates

Note 2, “Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements in Part

I, Item 1 of this Form 10-Q and Part II, Item 7, “Critical Accounting Policies and Estimates” in our Annual Report on Form

10-K for the year ended December 31, 2024 for descriptions of the significant accounting policies and methods used in the preparation

of our Condensed Consolidated Financial Statements.

There have been no material changes to the Company’s critical accounting estimates

since the Form 10-K for the year ended December 31, 2024.

During the three months ended March 31, 2026, there was no cash provided by or used in financing activities.

During the three months ended March 31, 2025, net cash provided by financing activities was approximately $11.1 million,

primarily consisting of approximately $19.0 million in proceeds from the February 2025 private placement, partially offset by approximately

$8.0 million in debt repayments.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”), and pursuant to Item 305 of Regulation S-K we are not required to provide quantitative and qualitative

disclosures about market risk.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis