What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 990 added, 1011 removed, 141 unchanged (93% of the section changed)

FINANCIAL STATEMENTS (UNAUDITED)

HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

thousands, except par value per share amounts)

Current assets

receivable, net of allowance of $ 2,251 and $ 2,209 at September 30, 2024 and December 31, 2023, respectively

current assets (Note 8)

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

March 31, 2025

December 31, 2024

Current assets

and equipment, net

lease right-of-use assets

Current liabilities

expenses and other current liabilities (Note 8)

payable, net of debt discount

portion of operating leases

portion of finance leases

Accounts receivable, net of allowance of $ 2,076 and $ 2,616 at March 31, 2025 and December 31, 2024, respectively

Escrow receivable

Inventories, net

Vendor deposits

Other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Current liabilities

leases, less current portion

long-term liabilities

and contingencies (Note 7)

STOCKHOLDERS’

stock, $ 0.0001 par value, 10,000 shares authorized, none issued and outstanding

Class A common stock, $ 0.01

par value per share, 600,000

shares authorized, 972

shares issued and outstanding as of September

shares authorized, 339

shares issued and outstanding as of December

Class B common stock, $ 0.0001

par value per share, 30,000

shares authorized, and 0

shares issued and outstanding as of September

30, 2024 and December 31, 2023 *

Common stock, value

paid-in capital *

other comprehensive income

stockholders’ equity attributable to Greenlane Holdings, Inc.

Non-controlling

Accounts payable

Accrued expenses and other current liabilities

Customer deposits

Current portion of notes payable

Current portion of operating leases

Total current liabilities

Operating leases, less current portion

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 7)

STOCKHOLDERS’ EQUITY

liabilities and stockholders’ equity

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

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

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands, except per share amounts)

Three months ended September 30,

Nine months ended September 30,

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, none issued and outstanding

Class A common stock, $ 0.01 par value per share, 600,000,000 shares authorized, 8,336,953 and 2,267,124 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Class B common stock, $ 0.0001 par value per share, 30,000,000 shares authorized, and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, value

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income

Total stockholders’ equity attributable to Greenlane Holdings, Inc.

Non-controlling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Cost of sales

7 unchanged sentences

Interest expense

Change in fair value of contingent consideration

Gain on extinguishment of debt

Other income (expense), net

Total other income (expense), net

Total other expense, net

Loss before income taxes

Provision for (benefit from) income taxes

Net income (loss) attributable to non-controlling interest

Net loss attributable to non-controlling interest

Net loss attributable to Greenlane Holdings, Inc.

Net loss attributable to Class A common stock per share - basic and diluted (Note 9)*

Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 9)*

Other comprehensive income (loss):

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

Weighted-average shares of Class A common stock outstanding - basic and diluted

Other comprehensive income:

Foreign currency translation adjustments

2 unchanged sentences

Comprehensive loss attributable to Greenlane Holdings, Inc.

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

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

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

(in thousands, except share amounts)

Income (Loss)

Class A Common Stock

Additional Paid-In

Accumulated Other Comprehensive

Other Comprehensive

Non- Controlling

3 unchanged sentences

$ ( 274,929 )

Equity-based compensation

Issuance of Class A shares - (Note 9)

Other comprehensive income

Exercise of Class A warrants

Issuance of Class A shares and warrants

Balance March 31, 2025

$ ( 278,796 )

Issuance of Class A shares - (Note 9)

Other comprehensive income

Balance June 30, 2024

$ ( 262,395 )

Issuance of Class A shares and warrants - (Note 9)

Other comprehensive income

Balance September 30, 2024

$ ( 266,152 )

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

Income (Loss)

Class B Common Stock

Additional Paid-In

Other Comprehensive

2 unchanged sentences

Income (Loss)

Balance 12/31/2022

$ ( 225,114 )

Equity-based compensation

Issuance of Class A shares - Amended Eyce APA (Note 3)

Other comprehensive income

Balance 3/31/2023

Equity-based compensation forfeiture, net

Issuance of Class A shares - Amended Eyce APA (Note 3)

Other comprehensive income (loss)

Balance 6/30/2023

Balance December 31, 2023

$ ( 257,289 )

1 unchanged sentence

Equity-based compensation

Issuance of Class A shares - Amended Eyce APA (Note 3)

Issuance of Class A shares (Note 9)

Other comprehensive income (loss)

Balance 9/30/2023

Issuance of Class A shares

Other comprehensive income

Balance March 31, 2024

$ ( 261,780 )

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

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

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30,

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended March 31,

Cash Flows from Operating Activities:

Net loss (including amounts attributable to non-controlling interest)

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

1 unchanged sentence

Equity-based compensation expense

Accretion of debt discount

Change in provision for doubtful accounts

Change in fair value of contingent consideration

Amortization of debt discount and deferred financing fees

Gain on extinguishment of debt

Changes in operating assets and liabilities, net of the effects of acquisitions:

Increase (decrease) in accounts receivable

Decrease in inventories

Decrease in vendor deposits

Decrease in other current assets

Increase (decrease) in accounts payable

Increase (decrease) in accrued expenses and other liabilities

Decrease in customer deposits

Net cash (used in) provided by operating activities

Changes in operating assets and liabilities:

Accounts receivable

Vendor deposits

Other current assets

Accounts payable

Accrued expenses and other liabilities

Customer deposits

Net used in provided by operating activities

Cash flows from Investing Activities:

Purchases of property and equipment, net

Proceeds from sale of equity investments

Net cash used in investing activities

Cash flows from Financing Activities:

Payments on Eyce and DaVinci promissory notes

Purchase consideration paid for Eyce LLC and DaVinci acquisitions

Repayments of Asset-Based Loan

Modification costs of Asset-Based Loan

Proceeds from issuance of Class A common stock and warrants, net of costs

Proceeds from exercise of stock options, net of costs

Proceeds from Secured Bridge Loan, net of costs

Proceeds from issuance of Class A common stock and warrants

Repayments of notes payable

Proceeds from notes payable

Proceeds from future receivables financing

2 unchanged sentences

Effects of exchange rate changes on cash

Net decrease in cash

Cash and restricted cash, as of beginning of the period

Cash and restricted cash, as of end of the period

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

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Reconciliation

of cash and restricted cash to consolidated balance sheets

For the nine months ended September 30,

Beginning of the period

Restricted cash

Total cash and restricted cash, beginning of period

End of the period

Restricted cash

Total cash and restricted cash, end of period

Net increase (decrease) in cash

Cash as of beginning of the period

Cash as of end of the period

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Supplemental disclosures of cash flow information

Cash paid for interest

Cash paid for amounts included in the measurement of lease liabilities

Non-cash financing activities:

Non-cash purchases of property and equipment

Extinguishment of debt in connection with Synergy asset purchase agreement

Transfer from contingent consideration to notes payable

Transfer from accrued expenses to notes payable

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

HOLDINGS, INC.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements.

GREENLANE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2025 and 2024

BUSINESS OPERATIONS AND ORGANIZATION

Holdings, Inc.

(“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries,

the “Company”, “we”, “us”, and “our”) was formed as a Delaware corporation on May 2,

We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”)

of shares of our Class A common stock, $0.01 par value per share (“Class A common stock”), in order to carry on the business

of Greenlane Holdings, LLC (the “Operating Company”).

The Operating Company was organized under the laws of the state of

Delaware on September 1, 2015, and is based in Boca Raton, Florida.

Unless the context otherwise requires, references to the “Company”

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

merchandise premium cannabis accessories, child-resistant packaging, specialty vaporization solutions and lifestyle products in the United

States, Canada, Europe and Latin America, serving a diverse and expansive customer base with thousands of retail locations, licensed

cannabis dispensaries, smoke shops, multi-state operators (“MSOs”), specialty retailers, and retail consumers.

have been developing a portfolio of our own proprietary brands (the “Greenlane Brands”) that we believe will, over time,

deliver higher margins and create long-term value for our customers and shareholders.

Our wholly-owned Greenlane Brands includes Groove

– our more affordable product line and Higher Standards – our premium smoke shop and ancillary product brand, and our award

winning Vapor.com website and brand.

We also have category exclusive licenses for the premium Marley Natural branded products, as well

as the K.Haring branded products.

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

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

conduct our business through the Operating Company and its subsidiaries.

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

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

have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of,

and receive benefits from, the Operating Company, that could be significant.

We determined that the Operating Company is a variable interest

entity (“VIE”) and that we are the primary beneficiary of the Operating Company.

Accordingly, pursuant to the VIE accounting

model, beginning in the fiscal quarter ended June 30, 2019, we consolidated the Operating Company in our consolidated financial statements

and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common

Units held by us) on our consolidated financial statements.

August 31, 2021, we completed our merger with KushCo Holdings, Inc.

(“KushCo”) and have included the results of operations

of KushCo in our consolidated statements of operations and comprehensive loss from that date forward.

In connection with the merger with

KushCo, the Greenlane Certificate of Incorporation was amended and restated (the “A&R Charter”) in order to (i) increase

the number of authorized shares of Greenlane Class B common stock, $ 0.0001 par value per share (the “Class B Common stock”),

from 10 million shares to 30 million shares in order to effect the conversion of each outstanding share of Class C common stock, $ 0.0001

par value per share (the “Class C common stock”), into one-third of one share of Class B common stock, (ii) increase the

number of authorized shares of Class A common stock from 125 million shares to 600 million shares, and (iii) eliminate references to

the Class C common stock.

Pursuant to the terms of an Agreement and Plan of Merger, dated as of March 31, 2021 (the “Merger Agreement”)

with KushCo, immediately prior to the consummation of the business combination, holders of Class C common stock received one-third of

one share of Class B common stock for each share of Class C common stock held immediately prior to the closing of the merger.

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

The Up-C structure allows the Operating Company to continue

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

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

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

Additionally, because

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

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

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

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

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

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

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

other tax benefits attributable to payments made under the TRA.

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

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

their Common Units.

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

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

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

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

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

by the non-founder members of the Operating Company.

of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common stock,

and we owned 100 % of the voting and economic interests in Greenlane through the holders’ ownership of Class A common stock.

“Note 9 - Stockholder’s Equity.”

June 2, 2023, 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-ten reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse Stock

Split, the “Reverse Stock Splits”) of our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 5,

As a result of the 2023 Reverse Stock Split, every ten shares of common stock issued and outstanding were converted into one share

of common stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the

2023 Reverse Stock Split.

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

of the State of Delaware, which became effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening of trading on the Nasdaq.

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

All outstanding

options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our

Common Stock have been adjusted as a result of the Reverse Stock Splits, 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.

10 — Compensation Plans” for more information.

share and per share amounts in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods

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

Stock to additional paid-in capital.

and Going Concern

to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether

there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue

as a going concern for one year after the date that these condensed consolidated financial statements are issued.

In accordance with

ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been

fully implemented as of the issuance date if (a) it is probable that management’s plans will be effectively implemented on a timely

basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial

doubt about the Company’s ability to continue as a going concern.

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

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds

from other equity issuances.

believe that our cash on hand and the cash flow that we generate from our operations will not be sufficient to fund our working capital

and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations,

for the next 12 months.

Based on our cash on hand and working capital at September 30, 2024, we may have insufficient cash to fund planned

operations into the fourth quarter of 2024.

This is evident from our continued efforts to raise capital and leverage external funding

to fulfil our capital needs.

Program and Shelf Registration Statement

formerly used a shelf registration statement on Form S-3 (the “Shelf Registr ation

Statement”) to conduct securities offerings from time to time in order to meet our liquidity needs.

In August 2021, we filed a

prospectus supplement and established an “at-the-market” equity offering program (the “ATM Program”) that provided

for the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time.

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

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

Due to the untimely

filing of certain of our Quarterly and Annual Reports, we are unable to issue additional shares of Class A common stock pursuant to the

ATM Program or otherwise use the Shelf Registration Statement, which will limit our liquidity options in the capital markets.

Stock and Warrant Offerings.

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

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

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

“July 2023 Standard Warrants”).

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

2023 Offering”).

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

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

See “Note 9 – Stockholders’ Equity” for further information.

On August 12, 2024, the Company entered into a securities

purchase agreement with a single institutional investor for aggregate gross cash proceeds of $ 6.5 million.

In connection with the private

placement, the Company will issue an aggregate of 2,363,637 units and pre-funded units.

The pre-funded units will be sold at the same

purchase price as the units, less the pre-funded warrant exercise price of $ 0.00001 .

Each unit and pre-funded unit will consist of one

share of common stock (or one pre-funded warrant) and two common warrants, each exercisable for one share of common stock at an exercise

price of $ 2.50 per share.

The common warrant will be exercisable on the initial exercise date described in the common warrant and will

expire 5.0 years from such date.

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

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

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

2 to the Loan Agreement,

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

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

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

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

outstanding under the terms of the Loan Agreement.

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

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

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

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

a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.9 million in cash, an economic participation

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

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

Receivables Financing

Greenlane Holdings, Inc.

and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, “we”,

“us”, and “our”) was formed as a Delaware corporation on May 2, 2018.

We are a holding company that was formed

for the purpose of completing an underwritten initial public offering (“IPO”) of shares of our Class A common stock, $ 0.01

par value per share (“Class A common stock”), in order to carry on the business of Greenlane Holdings, LLC (the “Operating

The Operating Company was organized under the laws of the state of Delaware on September 1, 2015, and is based in Boca

Raton, Florida.

Unless the context otherwise requires, references to the “Company” refer to us, and our consolidated subsidiaries,

including the Operating Company.

We merchandise premium cannabis accessories, child-resistant

packaging, specialty vaporization solutions and lifestyle products in the United States, Canada, Europe and Latin America, serving a diverse

and expansive customer base with thousands of retail locations, licensed cannabis dispensaries, smoke shops, multi-state operators (“MSOs”),

specialty retailers, and retail consumers.

We have been developing a portfolio of our own proprietary

brands (the “Greenlane Brands”) that we believe will, over time, deliver higher margins and create long-term value for our

customers and shareholders.

Our wholly-owned Greenlane Brands includes Groove – our more affordable product line and Higher Standards

– our premium smoke shop and ancillary product brand, and our award winning Vapor.com website and brand.

We also have category exclusive

licenses for the premium Marley Natural branded products, as well as the K.Haring branded products.

We are the sole manager of the Operating Company and

our principal asset is Common Units of the Operating Company (“Common Units”).

As the sole manager of the Operating Company,

we operate and control all of the business and affairs of the Operating Company, and we conduct our business through the Operating Company

and its subsidiaries.

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

All of our assets are held and all of the

employees are employed by wholly owned subsidiaries of the Operating Company.

We have the sole voting interest in, and control the

management of, the Operating Company, and we have the obligation to absorb losses of, and receive benefits from the Operating Company

that could be significant.

We determined that the Operating Company is a variable interest entity (“VIE”) and that we are

the primary beneficiary of the Operating Company.

Accordingly, pursuant to the VIE accounting model, beginning in the fiscal quarter ended

June 30, 2019, we consolidated the Operating Company in our consolidated financial statements and reported a non-controlling interest

related to the Common Units held by the members of the Operating Company (other than the Common Units held by us) on our consolidated

financial statements.

Our corporate structure is commonly referred to as

an “Up-C” structure.

The Up-C structure allows the Operating Company to continue to realize tax benefits associated with owning

interests in an entity that is treated as a partnership, or “pass-through” entity.

One of these benefits is that future taxable

income of the Operating Company that is allocated to its members will be taxed on a flow-through basis and therefore will not be subject

to corporate taxes at the Operating Company entity level.

Additionally, because a member may redeem their Common Units for shares of Class

A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the member with potential liquidity

that holders of non-publicly traded limited liability companies are not typically afforded.

In connection with the IPO, we entered into a Tax

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

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

The TRA provides for the payment

by us to the Operating Company’s member(s) of 85.0% of the amount of tax benefits, if any, that we may actually realize (or in some

cases, are deemed to realize) as a result of (i) the step-up in tax basis in our share of the Operating Company’s assets resulting

from the redemption of Common Units under the mechanism described above and (ii) certain other tax benefits attributable to payments made

under the TRA.

Pursuant to the Registration Rights Agreement, we have agreed to register the resale of shares of Class A common stock

that are issuable to the Operating Company’s members upon redemption or exchange of their Common Units.

The A&R Charter and the Fourth Amended and Restated

Operating Agreement of the Operating Company (the “Operating Agreement”) require that (a) we at all times maintain a ratio

of one Common Unit owned by us for each share of our Class A common stock issued by us (subject to certain exceptions), and (b) the Operating

Company at all times maintains (i) a one-to-one ratio between the number of shares of our Class A common stock issued by us and the number

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

members of the Operating Company and the number of Common Units owned by the non-founder members of the Operating Company.

Liquidity and Going Concern

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

primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from other

equity issuances.

The Company has incurred net losses of $ 3.9 million and $ 4.5 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, cash used in operating activities were $ 3.4 million and $ 0.1 million, respectively.

The recent macroeconomic environment has caused weaker demand than contemplated under the Company’s business plan, resulting in

a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

We believe that

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

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

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

Based on our cash on hand and working capital at March 31,

2025, we expect to have sufficient cash to fund planned operations through the second quarter of 2026.

This is largely due to the Company’s

Private Placement that occurred on February 19, 2025.

See Note 9 for more information.

forward, the Company’s ability to continue as a going concern is contingent upon successful execution of management’s intended

plan over the next twelve months to improve the Company’s liquidity and profitability, which includes, without limitation:

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

revenue by introducing new products and acquiring new customers.

on strategic partnerships accretive to margins and operating cash

additional capital through the issuance of debt or equity securities.

consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty.

For a more complete description of our initiatives, see below and the Management Discussion and Analysis.

Common Stock and Warrant Offerings.

On August 7, 2024, the Company

issued a note (the “Note”) in the principal amount of $ 3,237,269

The Note was due the earlier of (i) February 5, 2025;

or (ii) the Company’s receipt of at least $ 3,500,000

of gross proceeds from an offering of their securities (a “Qualified Offering”) and contain a 20 %

original issue discount.

The Notes were convertible into common stock after maturity if not paid prior.

In connection with the

issuance of the Note, the Company issued the Investor warrants to purchase up to 1,618,635

shares at the Qualified Offering Price.

The Note was repaid in full in February 2025 in the amount of $ 4.0

On August 12, 2024, the Company

entered into a securities purchase agreement with a single institutional investor for aggregate gross cash proceeds of $ 6.5

In connection with the private placement, the Company issued an aggregate of 2,363,637

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 $ 2.50

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

In February 2025, the Company exchanged 4,587,274

two and one-half ( 2.5 )

year warrants with an exercise price of $ 2.98

See Note 9 for more information.

Receivables Financings

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

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

At September 30, 2024, $ 4.6 million of such financing remained outstanding.

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

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

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

to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a six -month bridge loan

of $ 2.2 million in new funds.

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

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

to existing agreements during the term of the September 2023 Loan Agreement.

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

as collateral.

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

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

2023 Loan Agreement.

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

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

Synergy acquired certain assets from the Company

in exchange for the reduction in overall principal owed.

At September 30, 2024, $ 2.7 million of such financing remained outstanding.

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

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

As of September 30,

2024, the Company has been loaned $ 3.1

million with net cash proceeds of $ 2.6

the “Future Receivables Financings”).

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

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

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

fees of approximately $ 2.8 million.

During the year ended December 31, 2024,

the Future Receivables Financings were purchased by the Senior Subordinated Lender and paid down to $ 0 during the October 29, 2024 restructuring.

On October 29, 2024, the Company

entered into an Exchange Agreement with its Senior Subordinated Lender, whereby the Company agreed to exchange an aggregate of

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

in the principal amount of $ 4,000,000

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

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

In connection with the Exchange, the Company issued an aggregate of 1,261,830 five

year warrants with an exercise price of $ 3.04

per share (the “Exchange Warrants”).

In February 2025 the Company repaid the Senior Subordinated Lender in full in the

amount of $ 4.0 million.

In February 2025, the Company exchanged 1,541,830

two and one-half ( 2.5 )

year warrants with an exercise price of $ 2.98

per share for the Series B warrants issued in the February 2025 private placement.

See Note 9 for more information.

On February 18, 2025, the Company entered into definitive

agreements with institutional investors for the purchase and sale of approximately $ 25.0 million of shares of the Company’s Class

A common stock (“Common Stock”) and investor warrants at a price of $ 1.19 per Common Unit (“the 2025 Offering”).

The entire transaction has been priced at the market under Nasdaq rules.

The offering consisted of the sale of Common Units

(or “Pre-Funded Units”), each consisting of (i) one (1) share of Common Stock or one (1) Pre-Funded Warrant, (ii) one (1)

Series A PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $ 1.4875 (“Series A Warrant”)

and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $ 2.975 (“Series

B Warrant” and together with the Series A Warrant, the “Warrants”).

The initial exercise price of each Series A Warrant

is $ 1.4875 per share of Common Stock.

The Series A Warrants are exercisable following stockholder approval and expire five (5) years thereafter.

The number of securities issuable under the Series A Warrant is subject to adjustment as described in more detail in the Series A Warrant.

The initial exercise price of each Series B Warrant is $ 2.975 per share of Common Stock or pursuant to an alternative cashless exercise

The Series B Warrants are exercisable following stockholder approval and expire two and one-half ( 2.5 ) years thereafter.

of securities issuable under the Series B Warrant is subject to adjustment as described in the Series B Warrant.

Also, on February 18, 2025, the Company entered into

an Exchange Agreement with certain holders (the “Holders”) of three tranches of warrants to purchase Common Stock previously

issued by the Company in August 2024 and October 2024.

Under such Exchange Agreement, such Holders exchanged with the Company

such existing warrants for approximately 6.1 million new warrants to purchase common stock, substantially in the form of the Series B

Secured Bridge Loan

On September 22, 2023, the Company entered into a

secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023

with Synergy Imports, LLC (the “Secured Bridge Loan Lender”).

Pursuant to the September 2023 Loan Agreement,

the Secured Bridge Loan Lender agreed to make available to the Company a six 6 -month

bridge loan of $ 2.2

million in new funds.

Additionally, the Secured Bridge Loan Lender agreed to defer payments totaling $ 2,028,604

already owed by the Company under existing payment obligations and potentially defer up to an additional $ 2,655,778

which may become due pursuant to existing agreements during the term of the September 2023 Loan Agreement.

Subject to certain exceptions, the Company agreed

to pledge all of its assets, with the exception of deposit accounts and accounts receivable, as collateral.

Additionally, the Company

agreed to transfer one US patent and two related foreign patents and a related trademark in exchange for an exclusive license back of

such assets in the area of smoking products and accessories in connection with the September 2023 Loan Agreement.

In May 2024, the Company modified its debt agreement

with Synergy to reduce the principal balance due by $ 2.7 million from $ 5.1 million as part of the Loan Modification Agreement concurrent

with the Asset Purchase Agreement.

Synergy acquired certain assets from the Company in exchange for the reduction in overall principal

During 2024 Cobra acquired the Secured Bridge Loan from the Secured Bridge Loan Lender which was restructured as part of the Note

Amendment on October 29, 2024.

On June 7, 2024, the Company entered into a subscription

agreement with Cobra Alternative Capital Strategies, LLC (the “Subscription Agreement”).

As of December 31, 2024, the Company

has been loaned $ 3.1 million with net cash proceeds of $ 2.6 million pursuant to the Subscription Agreement.

The note was issued with a

1 unchanged sentence

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

During the three months ended September 30, 2024,

the Company repaid $ 2.1

million and the remaining outstanding balance was approximately $ 1.0

The Company has elected to measure these notes using the fair value option under ASC 825, Financial Instruments.

Given the short-term duration of the notes, the carrying value of the notes at September 30, 2024 approximate the fair value and as such

no fair value adjustment was recorded in the statement of operations.

have completed several initiatives to optimize our working capital requirements due to our inability to access capital markets on equitable

terms and stock-outs and shortages of higher velocity inventory.

In the fourth quarter of 2022, we launched Groove, a new, innovative

Greenlane Brands product line, and we also rationalized and improved our third-party brands product offering, which enabled us to reduce

inventory carrying costs and working capital requirements while increasing our offerings.

April 2023, we entered into two

strategic partnerships.

First, we entered into a strategic

partnership (the “MJ Packaging Partnership”) with A&A Global Imports d/b/a MarijuanaPackaging.com (“MJ Pack”),

a leading provider of packaging solutions to the cannabis industry.

On August 8, 2024 the Company terminated its strategic partnership

with MJ Packaging and is resuming its business as a direct provider of packaging solutions to the cannabis industry.

however, remains a distribution customer of the Company.

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

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

As part of the Vape Partnership,

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

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

If our Vape Partner and key customer(s) enter

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

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

In exchange we would

earn quarterly and annual commission payments from our strategic partner.

While the strategic partnership may result in a decrease

in top line revenue for these vape products, this partnership combined with some of our other restructuring initiatives

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

have successfully renegotiated many of our vendor and supplier partnership terms and are continuing to improve working capital arrangements

with our vendors and suppliers.

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

We have reduced our workforce significantly to reduce costs and align with our revenue projections.

Company has incurred net losses of $ 8.9 million and $ 27.8 million for

the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024 and 2023, cash (used in)

provided by operating activities were $ ( 5.2 ) million and $ 1.2 million, respectively.

The recent macroeconomic environment has caused weaker

demand than contemplated under the Company’s business plan, resulting in a reduction in projected revenue and cash flows for the

twelve-month period included in the going concern evaluation.

a result of our losses and our projected cash needs, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern

is contingent upon successful execution

of management’s intended plan over the next twelve months to improve the Company’s liquidity and profitability, which includes,

without limitation:

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

revenue by introducing new products, acquiring new customers, and enhancing our sales force

on strategic partnerships accretive to margins and operating cash

additional capital through the issuance of debt or equity securities.

unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this going concern

For a more complete description of our initiatives, see the Management Discussion and Analysis.

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

On August 7, 2024, the Company

issued a note (the “Note”) in the principal amount of $ 3,237,269

The Note is due the earlier of (i) February 5, 2025;

or (ii) the Company’s receipt of at least $ 3,500,000

of gross proceeds from an offering of their securities (a “Qualified Offering”) and contain a 20 %

original issue discount.

The Notes are convertible into common stock after maturity if not paid prior.

In connection with the

issuance of the Note, the Company issued the Investor warrants to purchase up to 1,618,635

shares at the Qualified Offering Price.

On October 29, 2024, the Company entered into the

First Amendment to Amended and Restated Secured Promissory Note (the “Note Amendment”) with Cobra.

Pursuant to the Note Amendment,

Cobra agreed to extend the Maturity Date of its Secured Bridge Loan and the Subscription Agreement (together the “Notes”).

The new Maturity Date was changed to October 29, 2025 .

In consideration for the extension, the Company (i) agreed to make such Notes convertible

at the option of Cobra with a conversion price of $ 3.17 per share, (ii) agreed to prepay Cobra’s debt with 50 % of any money raised

by the Company from warrant exercise proceeds and from capital raise transactions, and (iii) issued Cobra an aggregate of 500,000 five

year warrants with an exercise price of $ 3.04 per share which are identical to the Exchange Warrants.

This loan was repaid in full as

part of the February 2025 Private Placement.

Management Initiatives

We have completed several initiatives to optimize

our working capital requirements.

We launched Groove, a new, innovative Greenlane Brands product line, and we also rationalized our third-party

brands product offering, which enables us to reduce inventory carrying costs and working capital requirements.

In April 2023, we entered into two strategic partnerships.

First, we entered into a strategic partnership (the “MJ Packaging Partnership”) with A&A Global Imports d/b/a MarijuanaPackaging.com

(“MJ Pack”), a leading provider of packaging solutions to the cannabis industry.

Second, we entered into a strategic partnership with

an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods

and services (the “Vape Partnership”).

As part of the Vape Partnership, we will introduce our Vape Partner to certain key

customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage

and distribution of such vaporizer products.

If our Vape Partner and key customer(s) enter into a direct relationship, the customers would

directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need

to purchase such vape inventory on behalf of such key customer(s).

In exchange we would earn quarterly and annual commission payments

from our strategic partner.

While the strategic partnership may result in a decrease in top line revenue for these packaging and vape

products, this partnership combined with some of our other restructuring initiatives should allow us to reduce our overall cost-structure

and enhance our margins, thereby improving our balance sheet.

We have successfully renegotiated many of our vendor

and supplier partnership terms and are continuing to improve working capital arrangements with our vendors and suppliers.

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

We have reduced our workforce significantly

to reduce costs and align with our revenue projections.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission

(“SEC”) regarding interim financial reporting.

Certain information and note disclosures normally included in the financial

statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes

included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The condensed consolidated results of operations for

the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December

31, 2024, or any other future annual or interim period.

In the opinion of management, the unaudited condensed consolidated financial

statements reflect all adjustments necessary for a fair statement of the Company’s financial position and operating results.

reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year.

of Consolidation

condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating

Company’s consolidated subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

GAAP requires the use of estimates and judgments that affect the reported amounts in our consolidated financial statements

and accompanying notes.

These estimates form the basis for judgments we make about the carrying values of our assets and liabilities,

which are not readily apparent from other sources.

We base our estimates and judgments on historical information and on various other

assumptions that we believe are reasonable under the circumstances.

GAAP requires us to make estimates and judgments in several

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

Basis of Presentation

Our unaudited condensed consolidated financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S.

GAAP have been

condensed or omitted pursuant to such rules and regulations.

As such, the information included in this Form 10-Q should be read in conjunction

with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December

The condensed consolidated results of operations for the three months ended March 31, 2025 are not necessarily indicative of

the results that may be expected for the year ending December 31, 2025, or any other future annual or interim period.

In the opinion of

management, the unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair statement of the Company’s

financial position and operating results.

Certain reclassifications have been made to prior year amounts or balances to conform to the

presentation adopted in the current year.

Principles of Consolidation

Our condensed consolidated financial statements include

our accounts, the accounts of the Operating Company, and the accounts of the Operating Company’s consolidated subsidiaries.

significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Conformity with U.S.

GAAP requires

the use of estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes.

These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily

apparent from other sources.

We base our estimates and judgments on historical information and on various other assumptions that we

believe are reasonable under the circumstances.

GAAP requires us to make estimates and judgments in several areas.

include, but are not limited to the following:

the collectability of accounts receivable;

the allowance for slow-moving

or obsolete inventory;

the allowance for slow-moving or obsolete

the realizability of deferred tax assets;

the fair value of contingent consideration arrangements;

lives property and equipment;

the calculation of our VAT taxes receivable and VAT taxes, fines, and penalties payable;

our loss contingencies,

including our TRA liability;

and the valuation and assumptions underlying equity-based compensation.

These estimates are based on management’s

knowledge about current events and expectations about actions we may undertake in the future.

The actual results could differ materially

from those estimates.

manage our global business operations through our operating and reportable business segments.

As of September 30, 2024, we

determined that we have one remaining and reportable operating business segment.

Our reportable segment has been identified based on

how our chief operating decision maker (“CODM”), which is a committee comprised of our Chief Executive Officer

(“CEO”) and our Chief Financial and Legal Officer (“CFO”), manages our business, makes resource allocation

and operating decisions, and evaluates operating performance.

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

Revenue is measured based on the amount of consideration

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

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

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

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

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

our retail store sales.

the useful lives of property and equipment;

the calculation of our VAT taxes

receivable and VAT taxes, fines, and penalties payable;

our loss contingencies, including our TRA liability;

and the valuation and

assumptions underlying equity-based compensation.

These estimates are based on management’s knowledge about current events and

expectations about actions we may undertake in the future.

The actual results could differ materially from those estimates.

Segment Reporting

We manage our global business operations through our

operating and reportable business segments.

As of March 31, 2025, we determined that we have one reportable operating business segment.

Our reportable segment has been identified based on how our chief operating decision maker (“CODM”), which is a committee

comprised of our Chief Executive Officer (“CEO”) and our Chief Financial and Legal Officer (“CFO”), manages our

business, makes resource allocation and operating decisions, and evaluates operating performance.

Revenue Recognition

Revenue is recognized when customers obtain control

of goods and services promised by us.

Revenue is measured based on the amount of consideration that we expect to receive in exchange for

those goods or services, reduced by promotional discounts and estimates for return allowances and refunds.

Taxes collected from customers

for remittance to governmental authorities are excluded from net sales.

We generate revenue primarily from the sale of finished

products to customers, whereby each product unit represents a single performance obligation.

We recognize revenue from product sales when

the customer has obtained control of the products, which is either at point of sale or delivery to the customer, depending upon the specific

terms and conditions of the arrangement, or at the point of sale for our retail store sales.

We provide no warranty on products sold.

Product warranty is provided by the manufacturers.

For certain product

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

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

is placed by a customer.

We typically complete these orders within one to six months from the date of order, depending on the complexity

of the customization and the size of the order, but the completion timeline can vary by product type and terms of sales with each customer.

See “Note 8—Supplemental Financial Statement Information” for a summary of changes to our customer deposits liability

balance during the nine months ended September 30, 2024 and the year ended December 31, 2023.

estimate product returns based on historical experience and record them as a refund liability that reduces the net sales for the period.

We analyze actual historical returns, current economic trends and changes in order volume when evaluating the adequacy of our sales returns

allowance in any reporting period.

Our liability for returns, which is included within “Accrued expenses and other current liabilities”

in our consolidated balance sheet, was approximately $ 0.1 million December 31, 2023.

There were no liabilities related to refunds as

of September 30, 2024.

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

activity in cost of sales.

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

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

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

We also apply the practical expedient provided by the applicable

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

one year or less.

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

statements of operations and comprehensive loss.

Company transitioned to a commission revenue model for the majority of the sales for the Industrial segment.

The company operates as

a sales agent servicing vape customers and receives a commission for these services.

The company was previously working directly with

these customers and recognizing gross revenue versus straight commission revenue.

The Company recognizes this fee on a periodic basis

when the products have been shipped for the end consumer.

In working with their partner, the Company is not responsible for fulfilling

a promise to provide the specified goods, does not establish the pricing with its partners customers, and does not have control over

the goods that will be shipped.

As such, the Company is an agent and recognizes its revenue on a net basis for its service.

company pays Greenlane a negotiated percentage-based fee on a quarterly basis.

customer s represented approximately 36 %

and 27 % , respectively,

of net sales for the three months ended September 30, 2024.

Two customers represented approximately 16 % and 16 %, respectively, of net sales for the nine months ended September

For the three and nine months ended September 30, 2023, one customer

represented approximately 13 %

of net sales.

As of September 30, 2024 and December 31, 2023, the Company has a concentration of credit risk with its accounts receivable

balance as one customer represented approximately 15 %

respectively, of accounts receivable.

the third quarter of 2020, as part of a global tax strategy review, we determined that our European subsidiaries based in the Netherlands,

which we acquired on September 30, 2019, had historically collected and remitted value added tax (“VAT”) payments, which

related to direct-to-consumer sales to other European Union (“EU”) member states, directly to the Dutch tax authorities.

In connection with our subsidiaries’ payment of VAT to Dutch tax authorities rather than other EU member states, we may become

subject to civil or criminal enforcement actions in certain EU jurisdictions, which could result in penalties.

performed an analysis of the VAT overpayments to the Dutch tax authorities, which we expected to be refunded to us, and VAT payable to

other EU member states, including potential fines and penalties.

Based on this analysis, we recorded VAT payable of approximately $ 0.6

and $ 0.4 million, respectively, relating to this matter within “Accrued expenses and other current liabilities” in our condensed

consolidated balance sheets as of September 30 , 2024 and December 31, 2023.

to the purchase and sale agreement by which we acquired our European subsidiaries, the sellers are required to indemnify us against certain

specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by us in connection

with non-compliance with tax laws in relation to activities of the sellers.

The indemnity (or indemnification receivable) is limited

to an amount equal to the purchase price under the purchase and sale agreement.

noted above, we have voluntarily disclosed VAT owed to several relevant tax authorities in the EU member states and believe in doing

so we will reduce our liability for penalties and interest.

Nonetheless, we may incur expenses in future periods related to such matters,

including litigation costs and other expenses to defend our position.

The outcome of such matters is inherently unpredictable and subject

to significant uncertainties.

Refer to “Note 7—Commitments and Contingencies” for additional discussion regarding our

contingencies.

Issued Accounting Guidance Not Yet Adopted

June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ,

which clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity

holding the equity security and is not included in the equity security’s unit of account.

This standard is effective for fiscal

years beginning after December 15, 2023, with early adoption permitted.

The Company is currently evaluating the impact of adopting the

November 2023, the FASB issued ASU No.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which

improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments

in this update require public companies to disclose on an annual and interim basis, significant segment expenses that are regularly provided

to the chief operating decision maker (CODM) and require that a public entity disclose, on an annual and interim basis, an amount for

other segment items by reportable segment and a description of its composition.

In addition, the amendment requires that a public entity

provide all annual disclosures about a reportable segment’s profit or loss and assets currently required in interim periods and

require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s)

of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Early adoption is permitted.

is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

This amendment will

go into effect for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

December 2023, the FASB issued ASU No.

For certain product offerings such as child-resistant packaging, closed-system vaporization

solutions and custom-branded retail products, we may receive a deposit from the customer (generally 25 % - 50 % of the total order cost,

but the amount can vary by customer contract) when an order is placed by a customer.

We typically complete these orders within one to

six months from the date of order, depending on the complexity of the customization and the size of the order, but the completion timeline

can vary by product type and terms of sales with each customer.

See “Note 8—Supplemental Financial Statement Information”

for a summary of changes to our customer deposits liability balance during the three months ended March 31, 2025 and the year ended December

We estimate product returns based on historical experience

and record them as a refund liability that reduces the net sales for the period.

We analyze actual historical returns, current economic

trends and changes in order volume when evaluating the adequacy of our sales returns allowance in any reporting period.

Our liability

for returns, which is included within “Accrued expenses and other current liabilities” in our consolidated balance sheets,

was approximately $ 0.1 million and $ 0.1 million as of March 31, 2025 and December 31, 2024, respectively.

We elected to account for shipping and handling expenses

that occur after the customer has obtained control of products as a fulfillment activity in cost of sales.

Shipping and handling fees

charged to customers are included in net sales upon completion of our performance obligations.

We apply the practical expedient provided

for by the applicable revenue recognition guidance by not adjusting the transaction price for significant financing components for periods

less than one year.

We also apply the practical expedient provided by the applicable revenue recognition guidance based upon which we

generally expense sales commissions when incurred because the amortization period is one year or less.

Sales commissions are recorded

within “Salaries, benefits and payroll tax expenses” in the consolidated statements of operations and comprehensive loss.

The Company transitioned to a commission revenue model

for the majority of the sales for the Industrial segment.

The company operates as a sales agent servicing vape customers and receives

a commission for these services.

The company was previously working directly with these customers and recognizing gross revenue versus

straight commission revenue.

The Company recognizes this fee on a periodic basis when the products have been shipped for the end consumer.

In working with their partner, the Company is not responsible for fulfilling a promise to provide the specified goods, does not establish

the pricing with its partners customers, and does not have control over the goods that will be shipped.

As such, the Company is an agent

and recognizes its revenue on a net basis for its service.

The partner company pays Greenlane a negotiated percentage-based fee on a quarterly

customers represented approximately 51 %

and one customer represented 28 %

of net sales for the three months ended March 31, 2025 and 2024 , respectively .

Recently Adopted Accounting Guidance

In December 2023, the FASB issued ASU No.

Income Taxes (Topic 740) :

Improvements To Income Tax Disclosures, to enhance

the transparency and decision usefulness of income tax disclosures.

The amendments in this Update address investor requests for more

transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation

and income taxes paid information.

amendments in this Update require that entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2)

provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is

equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax

In addition, public business entities are required to provide certain qualitative disclosure about the rate reconciliation.

amendments in this Update require that all entities disclose on an annual basis the amount of income taxes paid (net of refunds received)

disaggregated (1) by federal (national), state, and foreign taxes and (2) by individual jurisdictions in which income taxes paid (net

of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).

Update also includes certain other amendments to improve the effectiveness of income tax disclosures, such as requiring that all entities

disclose the following information:

(or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign.

tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

amendments in this ASU require a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components

of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments.

Early adoption

is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

This amendment will go into effect for annual periods beginning after December 15, 2024.

Improvements To Income Tax Disclosures, to enhance the transparency and decision usefulness of

income tax disclosures.

The amendments in this Update address investor requests for more transparency about income tax information through

improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The adoption of

this standard did not have a material impact on the Company’s consolidated financial statements.

Recently issued Accounting Pronouncements Not Yet

In November 2024, the FASB issued ASU No.

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

Disaggregation of Income Statement Expenses.

The amendments in ASU 2024-03 require a public business entity to disclose specific information about certain costs and expenses in the

notes to its financial statements for interim and annual reporting periods.

The objective of the disclosure requirements is to provide

disaggregated information about a public business entity’s expenses to help investors (i) better understand the entity’s performance,

(ii) better assess the entity’s prospects for future cash flows, and (iii) compare an entity’s performance over time and with

that of other entities.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal

years beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU

The FASB and other entities issued new or modifications

to, or interpretations of, existing accounting guidance during 2024.

Management has carefully considered the new pronouncements that altered

generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on

the Company’s reported financial position or operations in the near term.

BUSINESS ACQUISITIONS AND DISPOSITIONS

Subsidiary Purchase Agreement

the Company entered into an agreement with a group of individuals to sell 100 % equity interests of one of the Company’s wholly-owned

subsidiaries, Shavita B.V.

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

As of the date that these financial statements were

available to be issued, the close of the transaction is in dispute as there was pending consideration obligations due to be transferred

to the Company not met, as well as other monetary obligations of the purchasers that remain unsatisfied.

The Company intends to

vigorously pursue its claims against Shavita and the purchaser group.

The Company does not believe any circumstances arising from the

ARI and Shavita transactions will have a material adverse effect on the Company, its financial condition or results of operations.

EU Subsidiary Purchase Agreement

In May 2024, the Company entered into an agreement

with a group of individuals to sell 100 % equity interests of one of the Company’s wholly-owned subsidiaries, Shavita B.V.

and substantially

all of the assets of ARI Logistics B.V.

As of March 31, 2025, the close of the transaction is in dispute as there was pending consideration

obligations due to be transferred to the Company not met, as well as other monetary obligations of the purchasers that remain unsatisfied.

As a result the Company did not record a sale of the business under ASC 805.

Business Combinations .

The Company intends to vigorously

pursue its claims against Shavita and the purchaser group.

As of March 31, 2025, the Company continues to run the operations, however sales were not material for the three months ended March 31,

2025 and 2024.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

carrying amounts for certain of our financial instruments, including cash, accounts receivable, accounts payable and certain accrued

expenses and other assets and liabilities, approximate fair value due to the short-term nature of these instruments.

of December 31, 2023, we had contingent consideration that is required to be measured at fair value on a recurring basis.

SCHEDULE OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS

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

(in thousands)

Condensed Consolidated

Balance Sheet Caption

Fair Value at

December 31, 2023

(in thousands)

Contingent consideration - current

Accrued expenses and other current liabilities

Total Liabilities

were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three and nine

months ended September 30 , 2024 and 2023, respectively.

Consideration

period we revalue our contingent consideration obligations associated with business acquisitions to their fair value.

We estimate the

fair value of the Product Launch Contingent Payments using a form of the scenario-based method, which includes significant unobservable

inputs such as management’s identification of probability-weighted outcomes and a risk-adjusted discount rate over the earn-out

Significant increases or decreases in these inputs could result in a significantly lower or higher fair value measurement of

the contingent consideration liability.

Changes in the fair value of contingent consideration are included within “Other income

(expense), net” in our condensed consolidated statements of operations and comprehensive loss.

reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs

(Level 3) is as follows:

SCHEDULE OF FAIR VALUE, LIABILITIES MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

(in thousands)

Nine Months Ended

September 30, 2024

Balance at December 31, 2023

Cash payments for earned contingent consideration

Transfer to notes payable

Gain from fair value adjustments included in results of operations

Balance September 30, 2024

(in thousands)

Nine Months Ended

September 30, 2023

Balance at December 31, 2022

Beginning balance

Cash payments for earned contingent consideration

Transfer to notes payable

Loss (gain) from fair value adjustments included in results of operations

Balance at September 30, 2023

Ending balance

Securities Without a Readily Determinable Fair Value

investment in equity securities without readily determinable fair value consist of ownership interests in Airgraft Inc., Sun Grown Packaging,

LLC (“Sun Grown”) and Vapor Dosing Technologies, Inc.

We determined that our ownership interests do

not provide us with significant influence over the operations of these investments.

Accordingly, we account for our investments in these

entities as equity securities.

Inc., Sun Grown, and VIVA are private entities and their equity securities do not have a readily determinable fair value.

to measure these securities under the measurement alternative election at cost minus impairment, if any, with adjustments through earnings

for observable price changes in orderly transactions for the identical or similar investment of the same issuer.

We acquired our investments

in Sun Grown and VIVA as part of our merger with KushCo, which we completed in August 2021.

Equity Securities Without a Readily Determinable

Our investment in equity securities without readily

determinable fair value consist of ownership interests in Airgraft Inc., Sun Grown Packaging, LLC (“Sun Grown”) and Vapor

Dosing Technologies, Inc.

We determined that our ownership interests do not provide us with significant influence

over the operations of these investments.

Accordingly, we account for our investments in these entities as equity securities.

Airgraft Inc., is a private entity

and their equity securities do not have a readily determinable fair value.

We elected to measure these equity securities under the

measurement alternative election at cost minus impairment, if any, with adjustments through earnings for observable price changes in

orderly transactions for the identical or similar investment of the same issuer.

We did not identify any fair value adjustments

related to these equity securities during the three and nine months ended September 30 , 2024

and 2023, respectively.

of September 30 , 2024 and December 31, 2023, the carrying value of our investment in equity

securities without a readily determinable fair value was approximately $ 1.9 million, respectively, included within “Other assets”

in our condensed consolidated balance sheets.

of September 30 , 2024, we had facilities financed under operating leases consisting of warehouses

and offices with lease term expirations between 2023 and 2027.

Lease terms are generally three to seven years for warehouses and

office space.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated

balance sheet as of September 30 , 2024.

The table below does not include commitments that

are contingent on events or other factors that are currently uncertain or unknown.

SCHEDULE OF LESSEE OPERATING LEASE LIABILITY MATURITY

related to these equity securities during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, the carrying

value of our investment in equity securities without a readily determinable fair value was approximately $ 1.9 million, respectively, included

within “Other assets” in our condensed consolidated balance sheets.

Greenlane as a Lessee

As of March 31, 2025, we had facilities

financed under operating leases consisting of warehouses and offices with lease term expirations in 2026.

Lease terms are generally three 3

to seven years for warehouses and office space.

Our lease agreements do not contain any material residual value guarantees or material

restrictive covenants.

The following table provides details of our future

minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of March 31, 2025.

table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

OF LESSEE OPERATING LEASE LIABILITY MATURITY

(in thousands)

1 unchanged sentence

Remainder of 2025

2028 and thereafter

Total minimum lease payments

3 unchanged sentences

Long-term portion

expense under operating leases was approximately $ 0.3 million and $ 0.8

million for the three and nine months ended September 30, 2024, respectively, and approximately $ 0.4 million and $ 1.5 million for the

three and nine months ended September 30, 2023, respectively.

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

consolidated statements of operations and comprehensive loss:

SCHEDULE OF LEASE COST

Rent expense under operating leases was approximately

$ 0.5 million and $ 0.3 million for the three months ended March 31, 2025 and 2024, respectively.

The following expenses related to our operating leases

were included in “general and administrative” expenses within our condensed consolidated statements of operations and comprehensive

OF LEASE COST

(in thousands)

For the nine months ended September 30,

For the three months ended

(in thousands)

2 unchanged sentences

Total lease cost

table below presents lease-related terms and discount rates as of September 30 , 2024:

average remaining lease terms

average discount rate

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

SCHEDULE OF DEBT

The table below presents lease-related terms and discount rates as of March

Operating Leases

Weighted average remaining lease terms

Weighted average discount rate

Our debt balance, excluding operating lease liabilities

and finance lease liabilities, consisted of the following amounts at the dates indicated:

(in thousands)

September 30, 2024

December 31, 2023

(in thousands)

September 30, 2024

December 31, 2023

Future Receivables Financing

Secured Bridge Loan

Exchange Note

Total long term debt

2 unchanged sentences

Debt, net, excluding operating and finance leases and liabilities

Receivables Financings

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

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

The Company will make weekly payments under the Future Receivables Financings and is scheduled to repay the amounts due under the Future

Receivables Financings in full in approximately six to eight months .

The total amount to be repaid under the initial Future Receivables

Financings was approximately $ 4.5 million.

In connection with the Future Receivables Financings, the Company granted the lenders security

interests in Company’s accounts receivable equal to the amounts due thereunder, and in connection with any event of default, the

lenders may file financing statements evidencing the security interests.

During the nine months ended September 30, 2024, the Company’s financings

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

As such the refinancings restructured the payment schedule and the total balance increased

to $ 4.6 million which included deferred financing fees of approximately $ 2.8 million.

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

of September 30, 2024, the Company had been loaned $ 3.1 million with net cash proceeds of $ 2.6 million, with an remaining balance due of $ 1.0 million.

The note was issued with a 20 % original

issue discount and is due in full on December 7, 2024 .

Upon default, the note can be converted at a variable price equal to 30 % discount

to the average daily volume weighted average price (“VWAP”) for the 20 trading days preceding the date of conversion.

of September 30, 2024, the note is not considered convertible.

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

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

to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a six-month bridge loan

of $ 2.2 million in new funds.

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

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

to existing agreements during the term of the September 2023 Loan Agreement.

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

as collateral.

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

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

2023 Loan Agreement.

May 6, 2024, the Company, Warehouse Goods and Synergy entered into an asset purchase agreement, dated May 1, 2024 (the “Asset Purchase

Agreement”) pursuant to which Synergy purchased all of the intellectual property, a specified amount of inventory, and other assets

related to the Eyce and DaVinci brands.

In consideration for the acquisition, all parties entered into a loan modification agreement,

effective May 1, 2024 (the “Loan Modification Agreement”) and an amended and restated secured promissory note, effective

May 1, 2024 (the “Amended and Restated Secured Promissory Note”), an amendment to the original Eyce and Davinci Asset Purchase

Agreements, a distribution agreement, the termination of a license granted by Eyce, and the termination of certain consulting and employment

As part of the overall modification, the principal balance with Synergy decreased by $ 2.7 million from $ 5.1 million.

acquired certain assets from the Company in exchange for the reduction in overall principal owed and as part of the transaction, the

Company recognized a gain on the debt modification of $ 2.2 million.

This amount is included in the accompanying financial statements

within the statement of operations for the three and nine months ended September 30, 2024 within other income (expense).

At September 30,

2024, $ 2.5 million of such financing remained outstanding.

The updated date of maturity will be through the end of 2024.

Minimum Principal Payments

following table summarizes future scheduled minimum principal payments of debt at September 30, 2024.

Future debt principal payments

are presented based upon the stated maturity dates in the respective debt agreement.

SCHEDULE OF MATURITIES OF LONG-TERM DEBT

(in thousands)

Remainder 2024

Year Ending December 31,

(in thousands)

Remainder 2024

Future Receivables Financing

Future Receivables Financings

In July, August, October, and November 2023, the Company

received an aggregate of approximately $ 3.9 million in cash pursuant to the terms of future receivables financings (collectively, the

“Future Receivables Financings”) entered into with two private lenders the “Future Receivables Financings”).

the year ended December 31, 2024, the Company’s financings were in a series of transactions refinanced as they were not able to

make the proscribed monthly payments for the repayment of cash advances.

As such the refinancings and the payment schedule was restructured

and the total balance increased to $ 4.6 million which included deferred financing fees of approximately $ 2.8 million.

During the year ended December 31, 2024, the Future

Receivables Financings were purchased by the Senior Subordinated Lender and paid down to $ 0 during the October 29, 2024 restructuring.

On October 29, 2024, the Company entered into an Exchange

Agreement with its Senior Subordinated Lender, whereby the Company agreed to exchange an aggregate of $ 4,617,307 of debt originally owed

to Agile Capital Funding LLC and Cedar Advance LLC in a 3(a)(9) exchange for new Senior Subordinated Notes in the principal amount of

$ 4,000,000 due one year from issuance (the “Exchange Note”), reducing outstanding indebtedness by approximately $ 617,000 .

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

In connection with the Exchange, the Company issued an

aggregate of 1,261,830 five year warrants with an exercise price of $ 3.04 per share (the “Exchange Warrants”).

The Company evaluated the Exchange Agreement under

ASC 470-50, Debt – Modifications and Extinguishment.

As a result, the Company determined that the Exchange Agreement should be accounted

for as an extinguishment and the Company recorded the Exchange Agreement debt instrument at fair value which included the consideration

in common stock warrants transferred.

The resulting loss on extinguishment of $ 2.0 million is included in loss on extinguishment of debt

in the accompanying consolidated statement of operations for the year ended December 31, 2024.

As noted above, the Company issued 1,261,830 common

stock warrants which were deemed to classified as equity as the warrants were exercisable for a fixed price of $ 3.04 and for a fixed number

of shares with no potential for cash redemption.

The Company determines the value of the warrants using an appropriate valuation method,

including a Black-Scholes.

As part of the debt extinguishment the 1,261,830 Exchange Warrants were valued at $ 2.6 million using the Black-Scholes

As part of the 2025 Offering, the Company used a portion of the proceeds

to pay off the Exchange Note in full in the amount of $ 4.0 million during the three months ended March 31, 2025.

On June 7, 2024, the Company entered into a subscription

agreement for a note payable with Cobra Alternative Capital Strategies, LLC (“Cobra”).

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

The Note is due the earlier of (i) February 5, 2025;

or (ii) the Company’s receipt of at least $ 3,500,000

of gross proceeds from an offering of their securities (a “Qualified Offering”) and contain a 20 %

original issue discount.

The Notes were convertible into common stock after maturity if not paid prior.

In connection with the

issuance of the Note, the Company issued the Investor warrants to purchase up to 1,618,635

shares at the Qualified Offering Price .

On October 29, 2024, the Company entered into the

First Amendment to Amended and Restated Secured Promissory Note (the “Note Amendment”) with Cobra.

Pursuant to the Note Amendment,

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

The new Maturity Date

was October 29, 2025 .

In consideration for the extinguishment of the Secured

Bridge Loan, Cobra paid off the $ 2.7 million balance owed to Synergy as part of the Secured Bridge Loan.

In exchange for paying off the

Secured Bridge Loan, the Company (i) agreed to make the Cobra Notes convertible at the option of Cobra with a conversion price of $ 3.17

per share, (ii) agreed to prepay Cobra’s debt with 50 % of any money raised by the Company from warrant exercise proceeds and from

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

which are identical to the Exchange Warrants.

The Exchange common stock warrants which were deemed to classified as equity as the warrants

were exercisable for a fixed price of $ 3.04 and for a fixed number of shares with no potential for cash redemption.

The Company determines

the value of the warrants using an appropriate valuation method, including a Black-Scholes.

As part of the debt extinguishment the 500,000

Exchange Warrants were valued at $ 1.0 million using the Black-Scholes model.

As part of the 2025 Offering, the

Company used a portion of the proceeds to pay off the Note in full in the amount of $ 4.0

million during the three months ended March 31, 2025.

Secured Bridge Loan

On September 22, 2023, the Company entered into a

secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023

with Synergy Imports, LLC (the “Secured Bridge Loan Lender”).

Pursuant to the September 2023 Loan Agreement, the

Secured Bridge Loan Lender agreed to make available to the Company a six-month bridge loan of $ 2.2 million in new funds.

Additionally,

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

and potentially defer up to an additional $ 2,655,778 which may become due pursuant to existing agreements during the term of the September

2023 Loan Agreement.

On May 6, 2024, the Company, Warehouse Goods and Synergy

entered into an asset purchase agreement, dated May 1, 2024 (the “Asset Purchase Agreement”) pursuant to which Synergy purchased

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

In consideration

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

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

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

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

The Company evaluated the extinguishment of the Secured

Bridge Loan under ASC 470-50, Debt – Modifications and Extinguishment.

As a result, the Company determined that the Secured Bridge

Loan should be accounted for as an extinguishment and the Company recorded the resulting gain on extinguishment of $ 2.1 million in the

accompanying consolidated statement of operations for the year ended December 31, 2024 As part of the overall modification, the principal

balance with Synergy decreased to $ 2.7 million from $ 5.1 million.

Synergy acquired certain assets from the Company in exchange for the

reduction in overall principal owed and as part of the transaction, the Company recognized a gain on the debt modification of $ 2.2 million.

This amount is included in the accompanying financial statements within the statement of operations for year ended December 31, 2024 within

other income (expense).

The Secured Bridge Loan balance of $ 2.7 million was paid in full by Cobra as part of the October 29, 2024 First

Amendment to Amended and Restated Secured Promissory Note.

The First Amendment to Amended and Restated Secured Promissory Note was repaid

in full in February 2025 with proceeds from the Private Placement.

The Company evaluated the extinguishment of the Secured

Bridge Loan under ASC 470-50, Debt – Modifications and Extinguishment.

As a result, the Company determined that the Secured Bridge

Loan should be accounted for as an extinguishment and the Company recorded the Cobra debt instrument at fair value which included the

consideration in common stock warrants transferred.

The resulting loss on extinguishment recorded of $ 1.0 million is included in loss

on extinguishment of debt in the accompanying consolidated statement of operations for the year ended December 31, 2024.

As noted above, the company issued 500,000 common

stock warrants which were deemed to classified as equity as the warrants were exercisable for a fixed price of $ 3.04 and for a fixed number

of shares with no potential for cash redemption.

The Company determines the value of the warrants using an appropriate valuation method,

including a Black-Scholes.

As part of the debt extinguishment the 500,000 Exchange Warrants were valued at $ 1.0 million using the Black-Scholes

COMMITMENTS AND CONTINGENCIES

Legal Proceedings

the ordinary course of business, we are involved in various legal proceedings involving a variety of matters.

3 unchanged sentences

However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

We have not taken any reserves for litigation for the nine months ended September 30, 2024 and 2023, respectively.

Contingencies

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

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

If the relevant taxing authorities

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

“Note 5—Leases” for details of our future minimum lease payments under operating lease liabilities.

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

November 13, 2024, Pryor Cashman made a demand for arbitration for unpaid legal invoices in the amount of $ 320,511.48 .

The Company intends

to dispute these claims in arbitration as it contends the services were not authorized or rendered and expects the case to be resolved

at a significant discount (Arbitration, S.D.

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

25-Cv-1428 (N.D.

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

Distributors of Ccell products, including Greenlane Holdings.

The Company believes the case is baseless and without merit,

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

December 17, 2024, Crossmark, Inc.

brought a breach of contract suit against our subsidiary, Warehouse Goods, LLC, in the amount of $ 297,181.90 .

The Company intends to defend this breach of contract suit vigorously (Case No.

502024CA011856XXXAM B AI).

February 25, 2025, the Company received a Civil Investigation Demand regarding an investigation to determine whether there is or has

been a violation of 31 U.S.C.

372 the False Claims Act concerning allegations of false claims submitted to federal programs for approval,

payment, and subsequent forgiveness of a Kim International LLC (a subsidiary of Kushco which the Company acquired in 2021) 2020 Federal

Payment Protection Program (“PPP) loan of approximately $1.9 million dollars.

At this stage, it is only a request for information

which the Company has provided.

The False Claims Act allows for the DOJ to recoup any PPP loans as well as potential treble damages for

any violation.

At this time, the Company cannot assess the likely outcome of the investigation.

December 16, 2024, S.K et al brought a consumer class action antitrust action against four U.S.

distributions of Ccell products, including

Greenlane Holdings, Inc., alleging antitrust violations.

The Company believes the case is baseless and without merit and is currently

jointly defending these claims with the other named defendants in the case.

November 15, 2024, Vaporous Technologies, Inc.

brought a suit for liquidated damages in the amount of $ 664,289.43 under the September

2020 Manufacturing Agreement by Vaporous against Warehouse Goods.

The Company believes they have strong defenses against this suit.

We have not taken any reserves for litigation

for the three months ended March 31, 2025 and 2024, respectively.

Other Contingencies

We are potentially subject to claims related to various

non-income taxes (such as sales, value added, consumption, and similar taxes) from various tax authorities, including in jurisdictions

in which we already collect and remit such taxes.

If the relevant taxing authorities were successfully to pursue these claims, we could

be subject to significant additional tax liabilities.

See “Note 5—Leases” for details

of our future minimum lease payments under operating lease liabilities.

See “Note 11—Incomes Taxes” for information

regarding income tax contingencies.

SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

of December 31, 2022, we had recorded an Employee Retention Credit (“ERC”) receivable of $ 4.9 million within “Other

current assets” on our consolidated balance sheets, and a corresponding amount was included in “Other income (expense), net”

in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2022.

On February 16, 2023, two of

Greenlane Holdings, Inc.’s subsidiaries, Warehouse Goods LLC and KIM International LLC (collectively, the “Company”),

entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.9

million in cash, an economic participation interest, at a discount, in all of the Company’s rights to payment from the United States

Internal Revenue Service with respect to the employee retention credits filed by the Company under the ERC program.

Current Assets

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

SCHEDULE OF OTHER CURRENT ASSETS

Property and Equipment, net

The following is a summary of our property and equipment,

at costs less accumulated depreciation and amortization:

OF PROPERTY PLANT AND EQUIPMENT LESS DEPRECIATION AND AMORTIZATION

(in thousands)

September 30, 2024

Estimated useful life

March 31, 2025

December 31, 2024

(in thousands)

September 30, 2024

Estimated useful life

March 31, 2025

December 31, 2024

Furniture, equipment and software

Leasehold improvements

Lesser of lease term or 5 years

Work in process

Property and equipment, gross

accumulated depreciation

Property and equipment, net

Depreciation expense for property and equipment was

approximately $ 0.1 million and $ 0.3 million for the three months ended March 31, 2025 and 2024, respectively.

Other Current Assets

The following table summarizes the composition of

other current assets as of the dates indicated:

OF OTHER CURRENT ASSETS

(in thousands)

March 31, 2025

December 31, 2024

(in thousands)

March 31, 2025

December 31, 2024

Other current assets:

VAT refund receivable (Note 2)

3 unchanged sentences

Other current assets

Expenses and Other Current Liabilities

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

Accrued Expenses and Other Current Liabilities

The following table summarizes the composition of

accrued expenses and other current liabilities as of the dates indicated:

OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

(in thousands)

September 30, 2024

March 31, 2025

December 31,2024

(in thousands)

September 30, 2024

March 31, 2025

December 31,2024

Accrued expenses and other current liabilities:

VAT payable (including amounts related to VAT matter described in Note 2)

Contingent consideration

Accrued employee compensation

Accrued professional fees and other expenses

Refund liability (including accounts receivable credit balances)

Sales tax payable

Accrued expenses and

other current liabilities

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

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

We typically complete orders related to customer deposits within one

to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion

timeline can vary by product type and terms of sale with each customer.

Changes in our customer deposits liability balance during the nine

months ended September 30, 2024 were as follows:

SCHEDULE OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

Accrued professional fees

Other accrued expenses

expenses and other current liabilities

Customer Deposits

For certain product offerings we may receive a deposit

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

by a customer.

We typically complete orders related to customer deposits within one to six months from the date of order, depending on

the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of

sale with each customer.

Changes in our customer deposits liability balance during the three months ended March 31, 2025 were as follows:

OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

(in thousands)

4 unchanged sentences

Revenue recognized

Balance as of September 30, 2024

Other Comprehensive Income

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

SCHEDULE OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS

Balance as of March 31, 2025

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive

income (loss) for the periods presented were as follows:

OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS

(in thousands)

Foreign Currency Translation

Unrealized Gain or (Loss) on Derivative Instrument

Currency Translation

Unrealized Gain

or (Loss) on Derivative Instrument

Balance at December 31, 2023

Other comprehensive income

Other comprehensive income (loss)

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

Balance at September 30, 2024

(in thousands)

Foreign Currency Translation

Unrealized Gain or (Loss) on Derivative Instrument

Balance at December 31, 2024

1 unchanged sentence

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

Balance at September 30, 2023

Concentration

four largest vendors accounted for an aggregate of approximately 43.8 % and 18.2 % of our total purchases for the three and nine months

ended September 30, 2024, respectively, and an aggregate of approximately 89.9 % and 82.2 % of our total purchases for the three and nine

months ended September 30, 2023, respectively.

Party Transactions

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

to Blum totaled approximately $ 0.4

million for the year ended December 31, 2022.

Total accounts receivable due from Blum were approximately $ 0.4

million as of September 30, 2024 and December 31, 2023, respectively.

On February 8, 2023, we filed a lawsuit against Blum in

Superior Court of California, Orange County, seeking to compel the repayment of Blum’s open balance due to us.

As of the date

of these financial statements were available to be issued, there has been a judgement received in favor of the Company.

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

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

Balance at March 31, 2025

Supplier Concentration

Our four largest vendors accounted for an aggregate

of approximately 78.8 % and 24.5 % of our total purchases for the three months ended March 31, 2025 and 2024, respectively.

Related Party Transactions

Renah Persofsky, a Greenlane Director, is also a Principal

Owner of Green Gruff USA Inc, (“Green Gruff”).

As of December 31, 2024, there have been no transactions between the Company

and Green Gruff.

Nicholas Kovacevich, our former Chief Corporate Development

Officer owns capital stock of Blum Holdings Inc.

(“Blum”) and serves on the Blum board of directors.

Total accounts receivable

due from Blum were approximately $ 0.4 million as of December 31, 2024 and 2023, respectively.

On February 8, 2023, we filed a lawsuit

against Blum in Superior Court of California, Orange County, seeking to compel the repayment of Blum’s open balance due to us.

of the date of these financial statements were available to be issued, there has been a judgement received in favor of the Company.

Three individuals who were employees of the Company

at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan taken out on September 22, 2023, however, none

are executive officers or directors of the Company.

STOCKHOLDERS’ EQUITY

of our Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends,

whether cash or stock, and proceeds upon dissolution, winding up or liquidation), while shares of our Class B common stock have voting

interests but no economic interests.

Each share of our Class A common stock, and except as otherwise required in the A&R Charter,

the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled

to vote together with the holders of Common Stock, as a single class with such holders of preferred stock).

June 5, 2023, we completed a one-for-10 reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse

Stock Split, the “Reverse Stock Splits”) of our issued and outstanding shares of Common Stock, as further described in “Note

2 - Summary of Significant Accounting Policies.” As a result of the 2023 Reverse Stock Split, every 10 shares of Common Stock issued

and outstanding were converted into one share of Common Stock.

We paid cash in lieu of fractional shares, and accordingly, no fractional

shares were issued in connection with the 2023 Reverse Stock Split.

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

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

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

Approval of the Proposed 2024 Reverse Stock Split at the 2024 Special Meeting granted the Board the authority, but not the obligation, to file the 2024 Amendment to effect the Proposed 2024 Reverse Stock Split

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

of the Board.

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

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

of trading on the Nasdaq.

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

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

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

All share and

per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for

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

of Common Stock to additional paid-in capital.

Non-Controlling

discussed in “Note 1—Business Operations and Organization”, we consolidate the financial results of the Operating Company

in our consolidated financial statements and report a non-controlling interest related to the Common Units held by non-controlling interest

As of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged for Class A common

stock, and we owned 100.0 % of the economic interests in the Operating Company.

The non-controlling interest in the accompanying consolidated

statements of operations and comprehensive loss represents the portion of the net loss attributable to the economic interest in the Operating

Company previously held by the non-controlling holders of Common Units calculated based on the weighted average non-controlling interests’

ownership during the periods presented.

At-the-Market

Equity Offering

August 2021, we established an “at-the-market” equity offering program (the “ATM Program”) that provides for

the sale of shares of our Class A common stock having an aggregate offering price of up to $ 50 million, from time to time, through Cowen

and Company, LLC (“Cowen”), as the sales agent.

Net proceeds from sales of our shares of Class A common stock under the ATM

Program are expected to be used for working capital and general corporate purposes.

of our Class A common stock under the ATM Program may be made by means of transactions that are deemed to be an “at the market

offering” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Nasdaq Capital Market or

sales made to or through a market maker or through an electronic communications network.

We are under no obligation to offer and sell

shares of our Class A common stock under the ATM Program.

of our Class A common stock will be issued pursuant to our effective shelf registration statement on Form S-3 (File No.

and a prospectus supplement relating to the Class A common stock that was filed with the Securities and Exchange Commission on April

Pursuant to Instruction I.B.6, in no event will the Company sell Class A common stock through the ATM Program with a value

exceeding more than one-third of the Company’s “public float” (the market value of the Company’s Class A common

stock and any other equity securities that it issues in the future that are held by non-affiliates) in any twelve-month period so long

as the Company’s public float remains below $ 75.0 million.

April 18, 2022, we entered into Amendment No.

1 (the “ATM Amendment”) to the sales agreement dated August 2, 2022 with Cowen.

The purpose of the Amendment was to add the limitations imposed on the ATM Program by Instruction I.B.6 to the sales agreement.

time of our entry into the ATM Amendment, approximately $ 37.3 million in shares remained available for issuance under the ATM Program.

to the untimely filing of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 we are unable to issue additional

shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement for a period of 12 months,

which will limit our liquidity options in the capital markets.

table below summarizes sales of our Class A common stock under the ATM program:

SUMMARIZES SALES OF OUR CLASS A COMMON STOCK

($ in thousands)

August 2021 (Inception) through

September 30, 2024

Class A shares sold

Gross proceeds

Fees paid to sales agent

Stock and Warrant Offerings

2023 Offering

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

aggregate of 50,952 shares of our Class A common stock, pre-funded warrants to purchase up to 317,013 shares of our Class A common stock

(the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 735,931 shares of our Class A common stock (the “July

2023 Standard Warrants”).

The July 2023 units each consisted of one share of Class A common stock or a July 2023 Pre-Funded Warrant

and two July 2023 Standard Warrants to purchase one share of our Class A common stock.

The July 2023 units were offered pursuant to an

effective Registration Statement on Form S-1.

The July 2023 Standard Warrants are exercisable immediately at an exercise price equal

to $ 1.05 per share of Class A common stock for a period of five years .

Each July 2023 Pre-Funded Warrant is exercisable immediately with

no expiration date for one share of Class A common stock at an exercise price of $ 0.0001 .

The July 2023 Offering generated gross proceeds

of approximately $ 4.3 million and net proceeds to the Company of approximately $ 3.8 million.

of the date of this Quarterly Report on Form 10-Q, all July 2023 Pre-Funded Warrants have been exercised, based upon which we issued

additional shares of our Class A common stock, for de minimis net proceeds.

connection with the July 2023 Offering, the Company entered into privately negotiated agreements with holders participating in the offering

to amend existing outstanding warrants to purchase up to 122,215 shares of Class A common stock that were previously issued in connection

with the June 2022 and October 2022 Offerings at exercise prices per share of $ 50.00 and $ 9.00 , respectively, and expire on December

29, 2027 and November 1, 2029 , respectively (collectively, the “Prior Warrants”), effective upon the closing of the July

2023 Offering to reduce the exercise price of the Prior Warrants to $ 1.05 , the exercise price of the warrants to purchase shares of Class

A common stock offered in the July 2023 Offering.

All other terms of the Prior Warrants remained unchanged.

2024 Private Placement

August 12, 2024, the Company entered into a securities purchase agreement with a single institutional investor pursuant to which we agreed to issue and sell an aggregate of 58,000 shares

of our Class A common stock, pre-funded warrants to purchase up to 2,305,637 shares of our Class A common stock (the “August 2024

Pre-Funded Warrants”) and warrants to purchase up to 4,727,274 shares of our Class A common stock (the “August 2024 Standard

for aggregate gross cash

proceeds of $ 6.5 million.

In connection with the private placement, the Company will issue an aggregate of 2,363,637 units and pre-funded

The pre-funded units will be sold at the same purchase price as the units, less the pre-funded warrant exercise price of $ 0.00001 .

Each unit and pre-funded unit will consist of one share of common stock (or one pre-funded warrant) and two common warrants, each exercisable

for one share of common stock at an exercise price of $ 2.50 per share.

The common warrant will be exercisable on the initial exercise

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

of September 30, 2024, there were 2,176,647 warrants that remained unexercised.

Loss Per Share

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

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

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

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

to potentially dilutive instruments.

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

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

Shares of our Class A common stock have both voting

interests and economic interests (i.e., the right to receive distributions or dividends, whether cash or stock, and proceeds upon dissolution,

winding up or liquidation), while shares of our Class B common stock have voting interests but no economic interests.

Each share of our

Class A common stock and Class B common stock entitles the record holder thereof to one vote on all matters on which stockholders generally

are entitled to vote, and except as otherwise required in the A&R Charter, the holders of Common Stock will vote together as a single

class on all matters (or, if any holders of our preferred stock are entitled to vote together with the holders of Common Stock, as a single

class with such holders of preferred stock).

Common Stock and Warrant Offerings

August 2024 Private Placement

On August 12, 2024, the Company

entered into a securities purchase agreement with certain holders (the “Holders”) pursuant to which we agreed to issue and sell an aggregate of 58,000

shares of our Class A common stock, pre-funded warrants to purchase up to 2,305,637

shares of our Class A common stock (the “August 2024 Pre-Funded Warrants”) and warrants to purchase up to 4,727,274

shares of our Class A common stock (the “August 2024 Standard Warrants”).

for aggregate gross cash proceeds of $ 6.5

In connection with the private placement, the Company issued an aggregate of 2,363,637

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 $ 2.50

The common warrant were exercisable on the initial exercise date described in the common warrant and will expire 5.0

years from such date.

On February 18, 2025, the Company

entered into an Exchange Agreement with Holders of three tranches of warrants to purchase Common Stock previously issued by the

Company in August 2024 and October 2024.

Under such Exchange Agreement, such Holders exchanged with the Company such existing

warrants for approximately 6.1 million new warrants to purchase common stock, substantially in the form of the Series B Warrants.

The Company exchanged 4,587,274

warrants not previously exercised into two and one-half ( 2.5 )

year warrants in the form of the Series B Warrants with an exercise price of $ 2.98

October 2024 Private Placement

On October 29, 2024, the Company

entered into an Exchange Agreement with its Senior Subordinated Lender and with Cobra.

In connection with the Exchange, the Company

issued an aggregate of 1,761,830 five

year warrants with an exercise price of $ 3.04

per share (the “Exchange Warrants”).

The Exchange Warrants which were deemed to be classified as equity as the warrants

were exercisable for a fixed price of $ 3.04

and for a fixed number of shares with no potential for cash redemption.

The Company determines the value of the warrants using an

appropriate valuation method, including a Black-Scholes.

As part of the debt extinguishments, the 1,761,830

Exchange Warrants were valued at $ 3.7

million using the Black-Scholes model.

In February 2025, the Company

exchanged the remaining 1,541,830

warrants not previously exercised into warrants which were substantially equivalent to the Series B Warrants which were two and

one-half ( 2.5 )

year warrants in the form of the Series B Warrants with an exercise price of $ 1.19

February 2025 Private Placement

On February 19, 2025, the Company

consummated a private placement pursuant to a securities purchase agreement (“Purchase Agreement”) with institutional

investors (the “Purchasers”) for the purchase and sale of approximately $ 25.0

million of shares of the Company’s Class A common stock and investor warrants at a price of $ 1.19

per Common Unit.

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

The offering consisted of the sale of Common

Units (or Pre-Funded Units), each consisting of (i) one (1) share of Common Stock or one (1) Pre-Funded Warrant, (ii) one (1) Series

A PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $ 1.4875

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

warrant at an exercise price of $ 2.975

(the “Series B Warrant” and together with the Series A Warrant, the “Warrants”).

The initial exercise price of each Series B Warrant is $ 2.975 per share of Common Stock or pursuant to an alternative

cashless exercise option

The initial exercise price of each Series A Warrant

is $ 1.4875 per share of Common Stock.

The Series A Warrants are exercisable following stockholder approval and expire five (5) years thereafter.

The number of securities issuable under the Series A Warrant is subject to adjustment as described in more detail in the Series A Warrant.

The initial exercise price of each Series B Warrant is $ 2.975 per share of Common Stock or pursuant to an alternative cashless exercise

The Series B Warrants are exercisable following stockholder approval and expire two and one-half (2.5) years thereafter.

of securities issuable under the Series B Warrant is subject to adjustment as described in the Series B Warrant.

In connection with the Private Placement, the Company

entered into a registration rights agreement with the Purchasers on February 18, 2025 (the “Registration Rights Agreement”),

pursuant to which the Company is required to file a registration statement covering the resale of the Securities within 30 calendar days

of the closing of the offering.

As part of the Purchase Agreement

the Company agreed to place $ 2.5

million into an escrow account to ensure there were no misrepresentations were made by the Company as part of the private placement.

As of March 31, 2025.

the escrow balance was $ 1.7 million due to $ 0.8 million being credited back to the Purchasers as a result of

late filings made by the Company.

The Company expects to settle the escrow receivable amount owed by December 31, 2025.

Net Loss Per Share

Basic net loss per share of Class A common stock is

computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding during

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

number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive instruments.

A reconciliation of the numerator and denominator

used in the calculation of basic and diluted net loss per share of our Class A common stock is as follows (in thousands, except per share

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

Three months ended September 30,

Nine months ended September 30,

(in thousands, except per share data)

Net income (loss) attributable to non-controlling interests

Deemed Dividend on “October 2022 Standard Warrants”

(in thousands, except share and per share data)

Three months ended March 31,

(in thousands, except share and per share data)

Net loss attributable to non-controlling interests

Net loss attributable to Class A common stockholders

1 unchanged sentence

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

of September 30, 2024, there were 2,245,629 warrants that remained unexercised which we used in determining the weighted average shares

the three and nine months ended September 30, 2024 and 2023, respectively, stock options and warrants to purchase Class A common stock

were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock because the effect would

have been anti-dilutive.

The June 2022 Pre-Funded Warrants, October 2022 Pre-Funded

Warrants, July 2023 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class

A common stock for the three months ended March 31, 2025 and 2024, respectively, beginning with their issuance date, as their stated exercise

price of $ 0.001 was non-substantive and their exercise was virtually assured.

The August 2024 Pre-Funded Warrants were included

in the weighted-average in the computation of basic net loss per share of Class A commons stock for the year ended December 31, 2024,

beginning with their issuance date, as their stated exercise price of $ 0.001 was non-substantive and their exercise was virtually assured.

The February 2025 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class A

commons stock for the three months ended March 31, 2025, beginning with their issuance date, as their stated exercise price of $ 0.001

was non-substantive and their exercise was virtually assured.

For the three months ended March 31, 2025 and 2024,

respectively, shares of Class B common stock and stock options and warrants to purchase Class A common stock were excluded from the weighted-average

in the computation of diluted net loss per share of Class A common stock because the effect would have been anti-dilutive.

Shares of our Class B common stock do not share in

our earnings or losses and are therefore not participating securities.

As such, separate calculations of basic and diluted net loss per

share for each of our Class B common stock under the two-class method have not been presented for the three months ended March 31, 2025

and 2024, respectively.

As of December 31, 2022, all Common Units of the Operating Company and Class B common stock had been exchanged

for Class A common stock, and we owned 100.0% of the economic interests in the Operating Company.

The following table sets forth the outstanding potentially

dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive

(in common stock equivalent shares):

of Outstanding Potentially Dilutive Securities

March 31, 2025

March 31, 2024

Three Months Ended March 31,

Stock options to purchase common stock

Warrants to purchase common stock

Antidilutive Securities, value

COMPENSATION PLANS

and Restated 2019 Equity Incentive Plan

April 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”).

In August 2021, we adopted, and our shareholders

approved, the Amended and Restated 2019 Equity Incentive Plan (the “Amended 2019 Plan”), which amends and restates the 2019

Plan in its entirety.

At our 2022 Annual Meeting of Stockholders on August 4, 2022, stockholders approved the Second Amended and Restated

2019 Equity Incentive Plan (the “Second Amended 2019 Plan”) which, among other things, increased the number of shares of

Class A common stock authorized for issuance under the Amended 2019 Plan.

Following the effect of the Reverse Stock Splits, the total

number of shares of Class A common stock authorized for issuance is 10,000 shares.

Second Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards.

The Second Amended 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive

officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders.

June 2, 2023, the Company’s stockholders approved a third amendment and restatement of the 2019 Plan (the “Third Amended

The Third Amended Plan, among other things, increases the number of shares of Class A common stock authorized for issuance

under the Second Amended 2019 Plan by 19,078 shares to an aggregate of 29,078 shares.

As of the date of this Quarterly Report on Form

10-Q, we have not filed a Registration Statement on Form S-8 with the Securities and Exchange Commission to register the additional shares

authorized under the Third Amended Plan.

Compensation Expense

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

operations and comprehensive loss.

We recognized equity-based compensation expense as follows:

Amended and Restated 2019 Equity Incentive Plan

In April 2019, we adopted the 2019 Equity Incentive

Plan (the “2019 Plan”).

In August 2021, we adopted, and our shareholders approved, the Amended and Restated 2019 Equity Incentive

Plan (the “Amended 2019 Plan”), which amends and restates the 2019 Plan in its entirety.

At our 2022 Annual Meeting of Stockholders

on August 4, 2022, stockholders approved the Second Amended and Restated 2019 Equity Incentive Plan (the “Second Amended 2019 Plan”)

which, among other things, increased the number of shares of Class A common stock authorized for issuance under the Amended 2019 Plan.

Following the effect of the Reverse Stock Splits, the total number of shares of Class A common stock authorized for issuance is 10,000

The Second Amended 2019 Plan provides eligible participants

with compensation opportunities in the form of cash and equity incentive awards.

The Second Amended 2019 Plan is designed to enhance our

ability to attract, retain and motivate our employees, directors, and executive officers, and incentivizes them to increase our long-term

growth and equity value in alignment with the interests of our stockholders.

On June 2, 2023, the Company’s stockholders

approved a third amendment and restatement of the 2019 Plan (the “Third Amended Plan”).

The Third Amended Plan, among other

things, increases the number of shares of Class A common stock authorized for issuance under the Second Amended 2019 Plan by 19,078 shares

to an aggregate of 29,078 shares.

As of the date of this Annual Report on Form 10-K, we have not filed a Registration Statement on Form

S-8 with the Securities and Exchange Commission to register the additional shares authorized under the Third Amended Plan.

Equity-Based Compensation Expense

Equity-based compensation expense is included within

“salaries, benefits and payroll taxes” in our condensed consolidated statements of operations and comprehensive loss.

We recognized

equity-based compensation expense as follows:

SCHEDULE OF EQUITY BASED COMPENSATION EXPENSE

(in thousands)

For the three months ended

September 30,

For the nine months ended

September 30,

Three months ended

(in thousands)

2 unchanged sentences

Total equity-based compensation expense

of September 30, 2024, there was no remaining unrecognized compensation expense.

a result of the IPO and the related transactions completed in April 2019, we owned a portion of the Common Units of the Operating Company,

which is treated as a partnership for U.S.

federal and most applicable state and local income tax purposes.

As a partnership, the Operating

Company was generally not subject to U.S.

federal and certain state and local income taxes.

Any taxable income or loss generated by the

Operating Company was passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata

basis, in accordance with the terms of the Operating Agreement.

As of March 31, 2025, there was no remaining unrecognized

compensation expense.

As a result of the IPO and the related transactions

completed in April 2019, we owned a portion of the Common Units of the Operating Company, which is treated as a partnership for U.S.

and most applicable state and local income tax purposes.

As a partnership, the Operating Company was generally not subject to U.S.

and certain state and local income taxes.

Any taxable income or loss generated by the Operating Company was passed through to and included

in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating

The Operating Company was also subject to taxes in foreign jurisdictions.

We are a corporation subject to U.S.

federal income taxes, in addition to state and local income taxes, based on our share of the Operating

Company’s pass-through taxable income.

on December 31, 2022, the Operating Company became wholly owned by us.

As a result, the Operating Company’s tax status was converted

from a partnership to a disregarded entity.

federal income

taxes, in addition to state and local income taxes, based on our share of the Operating Company’s pass-through taxable income.

Effective on December 31, 2022, the Operating Company

became wholly owned by us.

As a result, the Operating Company’s tax status was converted from a partnership to a disregarded entity.

Starting in 2023, 100% of the Operating Company’s U.S.

income and expenses is included

in our US and state tax returns.

the three and nine months ended September 30, 2024 and 2023, respectively, management performed an assessment of the realizability of

our deferred tax assets based upon which management determined that it is not more likely than not that the results of operations will

generate sufficient taxable income to realize portions of the net operating loss benefits.

Consequently, we established a full valuation

allowance against our deferred tax assets and reflected a carrying balance of $ 0 as of September 30, 2024 and December 31, 2023, respectively.

In the event that management determines that we would be able to realize our deferred tax assets in the future in excess of their net

recorded amount, an adjustment to the valuation allowance will be made, which would reduce December the provision for income taxes.

Tax Positions

the three and nine months ended September 30, 2024 and 2023, respectively, we did no t have any unrecognized tax benefits as a result

of tax positions taken during a prior period or during the current period.

No interest or penalties have been recorded as a result of

tax uncertainties.

The Company is subject to audit examination for federal and state purposes for the years 2019 – 2023.

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

Receivable Agreement (TRA)

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

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

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

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

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

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

The TRA payments

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

The rights of each noncontrolling interest holder

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

The timing and amount of aggregate payments due

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

each year and the applicable tax rate.

noted above, we evaluated the realizability of the deferred tax assets resulting from the IPO and the related transactions completed

in April 2019 and established a full valuation allowance against those benefits.

As a result, we determined that the amount or timing

of payments to noncontrolling interest holders under the TRA are no longer probable or reasonably estimable.

Based on this assessment,

our TRA liability was $ 0 as of September 30, 2024 and December 31, 2023.

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

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

the three and nine months ended September 30, 2024 and 2023, respectively, we did not make any payments, inclusive of interest, to members

of the Operating Company pursuant to the TRA.

SUBSEQUENT EVENTS

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

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

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

indebtedness by approximately $ 617,000 .

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

In connection

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

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

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

The Exchange Inducement Warrants

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

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

The Exchange Inducement Warrants are initially

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

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

exercised for cash during such inducement period.

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.

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

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

which is currently due.

The new Maturity Date will be October 29, 2025 .

In consideration for the extension, the Company (i) agreed to

make such Notes convertible at the option of Cobra with a conversion price of $ 3.17 per share, (ii) agreed to prepay Cobra’s debt

with 50 % of any money raised by the Company from warrant exercise proceeds and from capital raise transactions, and (iii) issued Cobra

an aggregate of 500,000 five year warrants with an exercise price of $ 3.04 per share which are identical to the Exchange Warrants.

income and expenses is included in our US and state tax returns.

During the three months ended March 31, 2025 and 2024,

respectively, management performed an assessment of the realizability of our deferred tax assets based upon which management determined

that it is not more likely than not that the results of operations will generate sufficient taxable income to realize portions of the

net operating loss benefits.

Consequently, we established a full valuation allowance against our deferred tax assets and reflected a carrying

balance of $ 0 as of March 31, 2025 and December 31, 2024, respectively.

In the event that management determines that we would be able

to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance will

be made, which would reduce December the provision for income taxes.

Uncertain Tax Positions

For the three months ended March 31, 2025 and 2024,

respectively, we did no t have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current

No interest or penalties have been recorded as a result of tax uncertainties.

The Company is subject to audit examination for

federal and state purposes for the years 2019 – 2023.

As of the date these financial statements were issued, there were not any

ongoing income tax audits.

Tax Receivable Agreement (TRA)

We entered into the TRA with the Operating Company

and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment by the Operating Company to the members of

85 % of the amount of tax benefits, if any, that we may actually realize (or in some circumstances are deemed to realize) as a result of

(i) increases in tax basis resulting from any future redemptions of Common Units as described in “Note 1—Business Operations

and Organization” and (ii) certain other tax benefits attributable to payments made under the TRA.

The annual tax benefits are computed by calculating

the income taxes due, including such tax benefits, and the income taxes due without such benefits.

The Operating Company expects to benefit

from the remaining 15 % of any tax benefits that it may actually realize.

The TRA payments are not conditioned upon any continued ownership

interest in the Operating Company.

The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its

interest in the Operating Company.

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors,

including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate.

As noted above, we evaluated the realizability of

the deferred tax assets resulting from the IPO and the related transactions completed in April 2019 and established a full valuation allowance

against those benefits.

As a result, we determined that the amount or timing of payments to noncontrolling interest holders under the

TRA are no longer probable or reasonably estimable.

Based on this assessment, our TRA liability was $ 0 as of March 31, 2025 and December

If utilization of the deferred tax assets subject

to the TRA becomes more likely than not in the future, we will record a liability related to the TRA, which would be recognized as expense

within our condensed consolidated statements of operations and comprehensive (loss) income.

During the three months ended March 31, 2025 and 2024,

respectively, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA.

SEGMENT REPORTING

We define our segments as those operations whose results

are regularly reviewed by our CODM to analyze performance and allocate resources.

Therefore, segment information is prepared on the same

basis that management reviews financial information for operational decision-making purposes.

Our CODM is a committee comprised of our

CEO and our CFO.

We determined we had one operating segment as of March

This operating segment aligns with how we manage our business as of the fourth quarter of 2024.

The accounting policies of the

reportable segments are the same as those described in “Note 2 - Summary of Significant Accounting Policies.”

Our CODM assesses the performance of our one operating

segment based on the operating segments’ net sales and gross profit.

The following table sets forth information by reportable segment

for the three months ended March 31, 2025 and 2024.

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

(in thousands)

Three Months Ended March 31,

(in thousands)

Cost of sales

The following table sets forth specific asset categories

which are reviewed by our CODM in the evaluation of operating segments:

(in thousands)

March 31, 2025

December 31, 2024

(in thousands)

March 31, 2025

December 31, 2024

Accounts receivable, net

Vendor deposits

The following table sets forth net sales disaggregated

by geography:

OF NET SALES DISAGGREGATED BY GEOGRAPHY

(in thousands)

Three Months Ended March 31,

(in thousands)

United States

Total net sales

The following table sets forth our long-lived assets

by geographic area, which consist of property and equipment, net, and operating lease right-of-use assets:

SCHEDULE OF LONG-LIVED ASSETS BY GEOGRAPHIC AREA

(in thousands)

March 31, 2025

December 31, 2024

(in thousands)

March 31, 2025

December 31, 2024

United States

Total long-lived assets

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

What changed 10-Q

Item 1. Financial Statements