What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 443 added, 254 removed, 251 unchanged (74% 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 March 31, 2026 included in Part I, Item 1 of this Quarterly Report on Form 10-Q,

and “our”) for the quarterly period ended June 30, 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.

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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, 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.

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

Examples of forward-looking statements include, without limitation:

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cash needs and financing plans;

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

macroeconomic

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

or additional governmental regulation;

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

strategy, outlook, and growth prospects;

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

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.

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

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

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

ability to prevent and recover from Internet security breaches;

sensitivity to global economic conditions and international trade issues;

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

potential delisting of our Class A common stock from Nasdaq;

costs as a result of being a public company;

failure to maintain adequate internal controls over financial reporting.

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

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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

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 presented.

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

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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.

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 June 30, 2026, a substantial majority of the Company’s balance sheet consisted of digital assets, cash and cash equivalents (including

dollar-denominated stablecoins that meet the criteria for cash equivalents), and Stablecoin-related protocol instruments.

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

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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.

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

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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.

is overseen by the Board’s Digital Assets Committee.

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

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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.

Through participation in the

Berachain ecosystem, the Company earned Berachain Governance Token (“BGT”), a non-transferable governance token, through July

On July 7–8, 2026, subsequent to the balance sheet date, the Berachain network implemented a protocol upgrade that permanently

discontinued BGT issuance and transitioned network incentives to a model centered on BERA and staked BERA.

As of June 30, 2026, the Company

held 198,031 BGT with a fair value of approximately $40 thousand, and is evaluating available redemption or migration mechanisms for

this position.

The Company did not control protocol governance

and could not assure that BGT would confer any anticipated influence or economic benefit.

Risk-Adjusted Yield Participation

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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.

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

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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.

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

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

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Company’s BERA holdings.

This operational lockup mechanism, applicable to the Company’s PIPE-related contractual transfer restrictions, expired

according to its terms on April 23, 2026, and is separate and distinct from the Berachain protocol-level vesting restrictions described

in Note 7, which continued to apply to a portion of the Company’s BERA holdings as of June 30, 2026.

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.

Company’s legacy business operates through vapor.com as an asset-light drop-ship referral service.

Company holds no inventory and does not handle or manufacture physical goods;

revenue is earned on a referral basis as orders are fulfilled

directly by third-party suppliers.

from this segment declined significantly during fiscal 2025 and is expected to represent a decreasing proportion of overall Company activity.

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

The Company does not currently prioritize expansion

of this segment.

Considerations

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.

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”),

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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.

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.

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.

Minimum Bid Price Compliance

March 25, 2026, Greenlane Holdings, Inc.

(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

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

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.

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

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

Nasdaq Market Value of Listed Securities Requirement

On July 22, 2026, the staff of the SEC,

acting pursuant to delegated authority, approved an amendment to the Nasdaq listing standards (Release No.

SR-NASDAQ-2026-004)

that would establish a minimum market value of listed securities requirement of $5.0 million for continued listing on the Nasdaq Capital

Market under Nasdaq Listing Rule 5550(a)(6).

Petitions seeking review of the approval order by the Commission were subsequently filed

and, on July 29, 2026, the approval order was stayed pursuant to Rule 431(e) of the SEC’s Rules of Practice, 17 C.F.R.

201.431(e), pending

review by the Commission.

As a result, the ultimate effectiveness and timing of the amended rule remain subject to Commission review.

Absent the stay, the Company’s current market

value of listed securities would be below the $5.0 million threshold under the amended rule.

The amended rule, as approved, does not provide

a compliance or cure period, and, if the amended rule takes effect following Commission review and the Company does not then satisfy it,

the Company could receive a Staff Delisting Determination following a period of 30 consecutive business days of noncompliance, which would

be accompanied by an immediate suspension of trading in the Common Stock;

a request for review by a Nasdaq Hearings Panel would not stay

the suspension.

As of the date of this Quarterly Report, the Company has not received a deficiency notice or Staff Delisting Determination

from the Nasdaq staff.

The Company is monitoring its market value of listed securities, the status of the Commission’s review, and communications

from the Nasdaq staff, and is evaluating alternatives to increase its market value of listed securities.

If the Common Stock were delisted

from Nasdaq, the Company expects that the Common Stock would be quoted on an over-the-counter market, which would adversely affect the

liquidity and market price of the Common Stock, the Company’s ability to issue securities, including under the ATM Offering, and the Company’s

ability to access the capital markets.

Accounting Estimates

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.

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 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.

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

When such prices are

not available, the Company utilizes observable market data from secondary sources, including pricing aggregators and broker quotes (Level

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.

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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.

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

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required to determine both the probability of loss and the estimated amount of loss.

In preparing the financial statements

for the quarter ended June 30, 2026, and based on information available through the issuance date of the financial statements, management

determined that a loss associated with certain direct purchaser antitrust actions was probable, but concluded that the amount or range

of loss could not be reasonably estimated at this time, and accordingly no accrual was recorded.

This determination reflects significant

judgment, including consideration of the Board's settlement authorization, the assessment of litigation counsel, and other information

available to management, and may change as the matter develops.

outcome of these matters is inherently uncertain.

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Accounting Pronouncements

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.

“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 March 31, 2026 and 2025, respectively:

Three Months Ended March 31,

% of Net revenue

following table presents operating results for the three months ended June 30, 2026 and 2025, respectively:

Three Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

Operating expenses:

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Change in fair value of digital assets

Impairment of investments

Other income (expense), net

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

and Distribution Operations

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.

The Company continues to operate

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

following table presents gross margin for Wholesale and Distribution operations for the three months ended June 30, 2026 and 2025, respectively:

Three Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

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.

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 six months ended June 30, 2026, the Company deployed a portion of its cash and stablecoin balances to acquire additional

the fourth quarter of 2025 and into the first and second quarters 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

For the three months ended June 30, 2026,

the Company recognized a fair value loss on digital assets of approximately $19.1 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

$0.3 million of staking and yield revenue during the period.

following table presents gross margin for Digital Asset operations for the three months ended June 30, 2026 and 2025, respectively:

Three Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

the three months ended June 30, 2026, net revenue was approximately $ 0.1

million , compared to approximately $ 0.8 million for the same

period in 2025, representing a decrease of approximately $ 0.7 million , or 89.6%.

in both periods consisted entirely of net sales from the Wholesale and Distribution Segment.

Staking and yield revenue of approximately

$ 0.3 million earned by the Digital Asset Segment is presented separately below gross profit

(loss) in the condensed consolidated statements of operations and comprehensive loss and is not included

in net revenue.

The year-over-year decrease was primarily attributable to the transition of the legacy business to a lower-scale operating

model, including lower sales volume and the exit of leased facilities.

See “Note 11 — Segment Reporting” for additional

of Sales and Gross Margin

the three months ended June 30, 2026, cost of sales was approximately $0.1 million, compared to approximately $0.8 million for the

same period in 2025, representing a decrease of approximately $0.7 million, or 93.6%.

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.

Cost of sales for both periods related

exclusively to the Wholesale and Distribution Segment and did not include costs associated with staking and yield 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.

margin for the Wholesale and Distribution Segment was approximately 39.0% for the three months ended June 30, 2026, compared to approximately

0.3% for the same period in 2025.

The Wholesale and

Distribution Segment reported net revenue of approximately $ 82 thousand and

cost of sales of approximately $50 thousand for the three months ended June 30, 2026.

Asset Segment reported staking and yield revenue of approximately $0.3 million for the three months ended June 30, 2026 , presented

below gross profit (loss) and excluded from gross margin.

The Digital Asset Segment does

not currently have associated cost of revenue.

See “Note 11 — Segment Reporting” for

additional information.

The gross loss in the Wholesale

and Distribution Segment for the six months ended June 30, 2026 was primarily attributable to the liquidation of remaining legacy inventory

at discounted prices during the first quarter of 2026, in connection with the Company’s continued transition to an asset-light, drop-ship

operating model.

Benefits and Payroll Taxes

benefits and payroll taxes were approximately $0.7 million for the three months ended June 30, 2026, compared to approximately $1.1

million for the same period in 2025, a decrease of approximately $0.4 million, or 34.0%.

The decrease was primarily attributable to

lower legacy headcount, partially offset by approximately $0.4 million of personnel costs associated with the newly established

Digital Asset Segment, which did not exist in the prior year comparative period.

Stock-based compensation – strategic advisory warrants

compensation expense related to strategic advisory warrants was approximately $0.2 million for the three months ended June 30, 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 $2.5 million for the three months ended June 30, 2026, compared to approximately $1.9

million for the same period in 2025, an increase of approximately $0.6 million, or 30.3%.

The increase was primarily attributable to higher legal, professional and

advisory fees, higher bad debt expense, and approximately $1.1 million of costs incurred by the newly established Digital Asset Segment,

partially offset by lower rent, insurance and public company costs following the reduction in scale of the legacy operations, and a gain

of approximately $69 thousand on the disposal of fixed assets.

and Amortization Expense

and amortization expense was approximately $0.1 million for the three months ended June 30, 2026, compared to approximately $0.2 million

for the same period in 2025, a decrease of approximately $0.1 million or 37.3%.

The decrease was primarily attributable to the reduction in fixed assets associated with the reduced-scale legacy

income (expense), net

income, net was approximately $22 thousand for the three months ended June 30, 2026, compared to $0 for the same period in 2025.

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

in fair value of digital assets

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 June 30, 2026, the Company recognized a

fair value loss of approximately $19.1 million, primarily driven by market fluctuations in BERA.

As of June 30, 2026, the fair value

of digital assets on the condensed consolidated balance sheet was approximately $16.4 million.

of investments

of investments was $1.8 million for the three months ended June 30, 2026, compared to $0 for the same period in 2025.

During the three months ended June 30, 2026, the Company identified impairment indicators for its investment in Airgraft

and recorded an impairment charge of approximately $1.8 million to reduce the carrying value of the investment to its estimated fair

The Company did not identify any impairment or observable price changes requiring adjustment in the three months ended June 30,

Income (Expense), Net

income (expense), net was an expense of approximately $0.7 million for the three months ended June 30, 2026, compared to a nominal

amount of income for the same period in 2025.

The increase in expense was primarily attributable to the settlement and write-off of

legacy balances in connection with the reduction in scale of the legacy operations.

Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

following table presents operating results for the six months ended June 30, 2026 and 2025, respectively:

Six Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

Operating expenses:

Salaries, benefits and payroll taxes

Stock-based compensation – strategic advisory warrants

General and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

Other income (expense), net:

Interest income (expense), net

Change in fair value of digital assets

Impairment of investments

Other income (expense), net

Total other income (expense), net

Loss before income taxes

Provision for (benefit from) income taxes

Net income attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

and Distribution Operations

Company continued to operate its wholesale and distribution business at a reduced scale during the six months ended June 30, 2026, consistent

with its transition to an asset-light, drop-ship model, compared to the same period in 2025.

following table presents gross margin for Wholesale and Distribution operations for the six months ended June 30, 2026 and 2025, respectively:

Six Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

Asset Operations

the six months ended June 30, 2026, the Company deployed approximately $11.3 million in cash and stablecoin balances to acquire

additional BERA as part of its digital asset treasury strategy.

During the first half of 2026, digital asset markets continued to

experience broad-based volatility and price declines.

For the six months ended June 30, 2026, the Company recognized a fair value

loss on digital assets of approximately $32.0 million and recognized approximately $0.7 million of staking and yield

following table presents gross margin for Digital Asset operations for the six months ended June 30, 2026 and 2025, respectively:

Six Months Ended June 30,

(in thousands)

Cost of sales

Gross profit (loss)

Staking and yield revenue, net

the six months ended June 30, 2026, net revenue was approximately $ 0.1

million , compared to approximately $2.3 million for the same period in 2025, representing a decrease

of approximately $2.1 million, or 95.2%.

Net revenue in both periods consisted entirely of net sales from the Wholesale and Distribution

Staking and yield revenue of approximately $ 0.7 million earned by the Digital Asset

Segment is presented separately below gross profit (loss) in the condensed consolidated statements

of operations and comprehensive loss and is not included in net revenue.

See “Note 11 — Segment Reporting” for additional

of Sales and Gross Margin

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

the six months ended June 30, 2026, cost of sales was approximately $0.3 million, compared to approximately $1.5 million for the

same period in 2025, representing a decrease of approximately $1.3 million, or 81.6%.

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

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

Digital Asset Segment.

Wholesale and Distribution Segment generated a negative gross margin of approximately 158.7% for the six months ended June 30, 2026,

compared to a positive gross margin of approximately 32.0% for the same period in 2025.

The Wholesale

and Distribution Segment reported net revenue of approximately $0.1 million and cost of sales of approximately

$0.3 million for the six months ended June 30, 2026, compared to net revenue of approximately $2.3 million and cost of sales of approximately

$1.5 million for the same period in 2025.

The Digital Asset Segment reported staking and yield revenue of approximately $0.7 million

for the six months ended June 30, 2026, presented below gross profit (loss) and excluded from

gross margin.

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

Benefits and Payroll Taxes

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.

benefits and payroll taxes were approximately $2.2 million for the six months ended June 30, 2026, compared to approximately $2.4 million

for the same period in 2025, a decrease of approximately $0.2 million, or 9.0%.

The decrease was primarily attributable to lower legacy

headcount, partially offset by approximately $0.8 million of personnel costs associated with the newly established Digital Asset Segment,

which did not exist in the prior year comparative period.

Stock-based compensation – strategic advisory warrants

compensation expense related to strategic advisory warrants was approximately $0.5 million for the six months ended June 30, 2026, compared

to $0 for the same period in 2025.

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

General and administrative

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.

General and administrative expenses were approximately $6.5 million for

the six months ended June 30, 2026, compared to approximately $4.8 million for the same period in 2025, an increase of approximately $1.8

million, or 36.7%.

The increase was primarily attributable to approximately $3.7 million of costs incurred by the newly established Digital

Asset Segment and approximately $1.8 million of higher legal, professional and advisory fees, together with higher bad debt expense and

a loss on lease termination recognized in the first quarter of 2026.

These increases were partially offset by lower rent expense following

the wind-down of legacy facilities, lower public company costs, a gain on the disposal of fixed assets, and the non-recurrence of restructuring

costs incurred in the prior-year period.

and Amortization Expense

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.

and amortization expense was approximately $0.3 million for the six months ended June 30, 2026, compared to approximately $0.3 million

for the same period in 2025, a decrease of approximately $54 thousand or 17.6%.

The decrease was primarily attributable to the reduction in fixed assets associated with the reduced-scale legacy

income (expense), net

income, net was approximately $0.1 million for the six months ended June 30, 2026, compared to interest expense, net of

approximately $0.4 million for the same period in 2025.

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.

the six months ended June 30, 2026, the Company recognized a fair value loss on digital assets of approximately $32.0 million, primarily

driven by market fluctuations in BERA.

As of June 30, 2026, the fair value of digital assets on the condensed consolidated balance sheet

was approximately $16.4 million.

of investments

of investments was $1.8 million for the six months ended June 30, 2026, compared to $0 for the same period in 2025.

The entire charge was recorded during the three months ended June 30, 2026, when the Company identified impairment

indicators for its investment in Airgraft Inc.

and recorded an impairment charge of approximately $1.8 million to reduce the carrying

value of the investment to its estimated fair value.

The Company did not identify any impairment or observable price changes requiring

adjustment in the six months ended June 30, 2025.

Income (Expense), Net

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.

income (expense), net was an expense of approximately $0.5 million for the six months ended June 30, 2026, compared to a nominal

amount of income for the same period in 2025.

The increase in expense was primarily attributable to the settlement and write-off of

legacy balances in connection with the reduction in scale of the legacy operations.

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.

of June 30, 2026, the Company had approximately $6.1 million of cash and cash equivalents, $8.1 million in stablecoin-related protocol

instruments, $16.4 million in digital asset holdings, and working capital of approximately $8.9 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 six months ended June 30, 2026.

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

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 separately, based on their nature and risk profile.

instruments are, in composition, substantially comprised of U.S.

dollar-denominated stablecoins deployed into yield-generating

protocol positions rather than held as spot stablecoins, and are subject to smart contract, protocol liquidity, and governance risk

not present in directly-held stablecoins.

While not classified as cash equivalents, management evaluates the Company’s overall

liquidity position inclusive of this balance, together with cash and cash equivalents.

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.

Company had no outstanding debt as of June 30, 2026.

The Company may opportunistically access capital markets, including through its

7 unchanged sentences

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

2026, the Company filed a prospectus supplement in connection with the ATM Offering for up to $5,355,687 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.

the six months ended June 30, 2026, the Company continued executing its digital asset treasury strategy, including token purchase and

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

The Company’s maximum amount available

under the lending arrangement as of June 30, 2026 was $5.0 million.

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.

on the Company’s current cash and cash equivalents, together with its stablecoin-related protocol instruments and expected operating cash

requirements for the twelve months following the date of issuance of these condensed consolidated financial statements, management believes

that these resources are sufficient to fund the Company’s estimated operating cash requirements for that period without reliance on the

Company’s digital asset holdings.

Accordingly, 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.

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 Plan 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

of June 30, 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:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

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.

the six months ended June 30, 2026, net cash used in operating activities was approximately $7.1 million.

Operating cash use was

primarily driven by the Company’s net loss of $43.0

million, adjusted for non-cash items, including the $32.0 million fair value loss on digital assets, the $1.8 million impairment of

investments, stock-based compensation, depreciation and amortization, and changes in working capital.

the six months ended June 30, 2025, net cash used in operating activities was approximately $7.9 million, primarily driven by the Company’s

net loss of $7.1 million, adjusted for non-cash items and changes in working capital.

Cash Used in Investing Activities

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.

the six months ended June 30, 2026, net cash used in investing activities was approximately $19.4 million, primarily related to purchases

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

the six months ended June 30, 2025, net cash used in investing activities was approximately $0.1 million, primarily related to capital

expenditures.

Cash Provided by Financing Activities

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.

the six months ended June 30, 2026, there was no cash provided by or used in financing activities.

the six months ended June 30, 2025, net cash provided by financing activities was approximately $12.8 million, primarily consisting of

approximately $20.7 million in proceeds from the February 2025 private placement, partially offset by approximately $8.0 million in debt

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.

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

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