Greenlane Holdings, Inc. 10-Q

ITEM 4. CONTROLS AND PROCEDURES Management’s Evaluation of Disclosure Controls and Procedures We have established disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting described in Item 9A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2025, which have not yet been remediated as of June 30, 2026. 36 Material Weaknesses Remediation Plan and Status As previously described in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2025, management’s remediation efforts are focused on strengthening the Company’s control environment, enhancing information technology general controls, formalizing control activities, and implementing robust processes over the Company’s digital asset treasury operations. During the quarter ended June 30, 2026, management continued executing its remediation plan and made further progress. Management has substantially completed the design and implementation of certain remediation measures related to digital asset treasury operations and to core control activities — including standardized account reconciliations, journal entry review, and reduced reliance on manual spreadsheets. Testing of the operating effectiveness of these measures continues. Remediation efforts related to information technology general controls, the broader control environment, and monitoring activities remain in progress and are targeted for substantial completion in the third quarter of 2026. During the quarter, management designed and prepared to implement a new enterprise resource planning (“ERP”) system to replace legacy reporting infrastructure, which went live on July 1, 2026, subsequent to the balance sheet date. The condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 were prepared using the Company’s legacy systems and processes; no transactions or balances reflected in these financial statements were processed through the new ERP system. In connection with the go-live, management designed enhanced role-based access controls, segregation of duties, user provisioning and de-provisioning procedures, formalized controls over system changes and user access management, multi-factor authentication, and periodic user access review procedures over critical financial applications. These controls began operating on and after July 1, 2026, and management expects them to strengthen the Company’s information technology general controls and address previously identified material weaknesses related to system access and technology controls. Because these controls have only recently gone into operation, management has not yet evaluated their operating effectiveness and does not expect to be able to do so until they have operated for a sufficient period of time, which is expected to occur in a future reporting period. To address the material weaknesses related to the Company’s digital asset treasury operations, management has developed and placed into use an internal treasury reporting application designed to support digital asset custody tracking, wallet completeness validation, transaction reconciliation, fair value measurement, and period-end financial reporting. During the quarter, management performed internal testing of the application’s completeness and accuracy, including reconciliation of wallet activity to blockchain records, validation of wallet balances, testing of market pricing inputs, and verification of digital asset conversion methodologies used in determining U.S. dollar fair values. In addition, the Company’s information technology department completed a cybersecurity and access controls assessment of the application and implemented additional security enhancements. The Company has also engaged third-party specialists to independently evaluate the design, implementation, and operating effectiveness of these controls. This independent assessment remains in process. In addition, management continues to strengthen the Company’s overall control environment and control activities through the formalization of accounting policies and procedures, implementation of standardized account reconciliation processes, enhanced journal entry preparation and review protocols, and improvements to the financial statement close process. Management is also reducing reliance on manual and off-platform processes through increased use of system-based reporting solutions and enhanced documentation standards. The Company is further enhancing its monitoring activities through periodic management reviews, internal control testing, and remediation tracking procedures. Control deficiencies identified through these monitoring activities are evaluated timely, communicated to responsible parties, and tracked through completion. Management continues to provide regular updates regarding remediation progress to senior leadership and the Audit Committee. While management believes the actions described above are addressing the identified material weaknesses, the material weaknesses will not be considered remediated until the applicable controls have been fully designed, implemented, and operated effectively for a sufficient period of time. Changes in Internal Control Over Financial Reporting During the quarter ended June 30, 2026, management designed changes to internal control over financial reporting in connection with the planned go-live of its new ERP system and the Company’s digital asset treasury control environment, including enhancements to user access controls, digital asset valuation methodologies, wallet completeness validation, and treasury reporting processes. The ERP system itself went live on July 1, 2026, subsequent to the quarter covered by this report, and the related control changes accordingly began operating in the third quarter of 2026. Except for the design and preparatory work described above, there were no changes to our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 37 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS For a description of our material pending legal proceedings, see Note 5 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.