What changed in this filing

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Item 1. Financial Statements

2024-01-08 compared with 2023-05-16 · 335 added, 177 removed, 545 unchanged (48% of the section changed)

4 unchanged sentences

2023 December 31,

(As restated) (As restated)

ASSETS (Unaudited)

2 unchanged sentences

Restricted cash — 5,718

Accounts receivable, net of allowance of $4,767 and $4,826 at March 31, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowance of $ 4,529 and $ 4,826 at June 30, 2023 and December 31, 2022, respectively

Inventories, net 29,840 40,643

Vendor deposits 5,013 6,296

Other current assets (Note 8) 6,724 11,120

Other current assets 6,893 11,120

Total current assets 49,486 76,703

Property and equipment, net 3,587 3,962

Intangible assets, net 47,949 49,268

Operating lease right-of-use assets 2,505 3,442

19 unchanged sentences

Class A common stock, $ 0.01 par value per share, 600,000 shares authorized;

15,985 shares issued and outstanding as of March 31, 2023;

1,598 shares issued and outstanding as of June 30, 2023;

1,599 shares issued and outstanding as of December 31, 2022*

Class B common stock, $ 0.0001 par value per share, 30,000 shares authorized;

0 shares issued and outstanding as of March 31, 2023;

0 shares issued and outstanding as of June 30, 2023;

0 shares issued and outstanding as of December 31, 2022*

1 unchanged sentence

Accumulated deficit ( 242,839 ) ( 225,114 )

Accumulated other comprehensive income (loss) 233 55

Accumulated other comprehensive income 260 55

Total stockholders’ equity attributable to Greenlane Holdings, Inc.

3 unchanged sentences

Total liabilities and stockholders’ equity $ 61,117 $ 89,685

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

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

GREENLANE HOLDINGS, INC.

1 unchanged sentence

(in thousands, except per share amounts)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

(As restated) (As restated)

Net sales $ 19,625 $ 39,916 $ 43,584 $ 86,450

14 unchanged sentences

Net loss ( 9,024 ) ( 14,481 ) ( 17,771 ) ( 33,230 )

Net loss attributable to non-controlling interest

Net income (loss) attributable to non-controlling

8 ( 2,357 ) ( 46 ) ( 5,774 )

Net loss attributable to Greenlane Holdings, Inc.

3 unchanged sentences

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

Other comprehensive income:

1,599 534 1,599 493

Other comprehensive income (loss):

Foreign currency translation adjustments 27 ( 62 ) 205 26

Unrealized gain on derivative instrument — 358

Unrealized gain (loss) on derivative instrument — — — 358

Comprehensive loss

1 unchanged sentence

Comprehensive loss attributable to non-controlling interest

( 8 ) ( 2,357 ) ( 8 ) ( 5,688 )

Comprehensive loss attributable to Greenlane Holdings, Inc.

$ ( 8,989 ) $ ( 12,186 ) $ ( 17,558 ) $ ( 27,158 )

*After giving effect to the one-for-20 2022 Reverse Stock Split effective August 9, 2022.

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

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

11 unchanged sentences

Shares* Amount* Shares* Amount*

Balance December 31, 2022 15,985 $ 152 — $ — $ 266,516 $ (171,365) $ 55 $ 1 $ 95,359

Net loss — — — — — (10,194) — (54) (10,248)

Balance 12/31/2022 (As restated) 1,599 $ 15 — $ — $ 264,017 $ ( 225,114 ) $ 55 $ 18 $ 38,991

Net loss (As restated) — — — — — ( 8,693 ) — ( 54 ) ( 8,747 )

Equity-based compensation — — — — 110 — — 110

1 unchanged sentence

Other comprehensive income — — — — — — 178 — 178

Balance March 31, 2023 15,985 $ 152 — $ — $ 266,721 $ (181,559) $ 233 $ (53) $ 85,494

Balance 3/31/2023 (As restated) 1,599 15 — — 264,222 ( 233,807 ) 233 ( 36 ) 30,627

Net loss (As restated) — — — — — ( 9,032 ) — 8 ( 9,024 )

Equity-based compensation forfeiture, net ( 1 ) — — — ( 11 ) — — — ( 11 )

Issuance of Class A shares - Amended Eyce APA (Note 3) — — — — 65 — — — 65

Other comprehensive income (loss) — — — — — — 27 — 27

Balance 6/30/2023 (As restated) 1,598 $ 15 — $ — $ 264,276 $ ( 242,839 ) $ 260 $ ( 28 ) $ 21,684

Common Stock Class B

15 unchanged sentences

Balance March 31, 2022 513 5 106 — 241,303 ( 70,876 ) 685 18,133 189,250

*After giving effect to the one-for-20 2022 Reverse Stock Split effective August 9, 2022.

Net loss — — — — — ( 12,124 ) — ( 2,357 ) ( 14,481 )

Equity-based compensation — — — — 371 — — 75 446

Issuance of Class A shares, net of costs - ATM Program 30 — — — 2,224 — — — 2,224

Issuance of Class A shares, net of costs - June 2022 Offering 59 1 — — 5,039 — — — 5,040

Issuance of Class A shares - Amended Eyce APA (Note 3) 7 — — — 310 — — — 310

Reclassification adjustment for gain included in net loss (Note 4) — — — — — — ( 332 ) — ( 332 )

Other comprehensive income (loss) — — — — — — ( 62 ) — ( 62 )

Balance June 30, 2022 609 $ 6 106 $ — $ 249,247 $ ( 83,000 ) $ 291 $ 15,851 $ 182,395

* After giving effect to the Reverse Stock Splits - See Note 9 - Stockholders' Equity.

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

2 unchanged sentences

(in thousands)

For the three months ended March 31,

Six months ended June 30,

(As restated)

Cash flows from operating activities:

3 unchanged sentences

Equity-based compensation expense 260 1,630

Change in fair value of contingent consideration 103 92

Change in provision for doubtful accounts ( 10 ) 1,982

Gain related to indemnification asset — ( 1,798 )

Unrealized (gain) loss on equity investments — 302

Other 222 (183)

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

Unrealized loss on equity investments — 556

Unrealized gain on interest rate swap contract — ( 449 )

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable 3,389 ( 2,841 )

9 unchanged sentences

Proceeds from sale of assets held for sale — 75

Proceeds from the sale of equity investments 53 —

Purchase of intangible assets, net — —

Net cash provided by (used in) investing activities ( 253 ) ( 1,197 )

2 unchanged sentences

Payments on Eyce and DaVinci promissory notes ( 1,601 ) ( 1,974 )

Purchase consideration paid for Eyce LLC and DaVinci acquisitions ( 300 ) ( 875 )

Repayments of Asset-Based Loan ( 9,452 ) —

3 unchanged sentences

Effects of exchange rate changes on cash 205 85

Net (decrease) in cash (6,304) (6,913)

Net increase (decrease) in cash ( 7,525 ) ( 3,727 )

Cash and restricted cash, as of beginning of the period 12,176 12,857

2 unchanged sentences

GREENLANE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Reconciliation of cash and restricted cash to consolidated balance sheets

For the three months ended March 31,

For the six months ended June 30,

Beginning of the period

7 unchanged sentences

Supplemental disclosures of cash flow information

Cash paid during the period for interest $ 1,155 $ 411

Cash paid for amounts included in the measurement of lease liabilities $ 447 $ 1,452

19 unchanged sentences

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 a wholly owned subsidiary of the Operating Company.

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.

22 unchanged sentences

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 31, 2022.

The condensed consolidated results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other future annual or interim period.

The condensed consolidated results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, 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.

2 unchanged sentences

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

2022 Reverse Stock Split

On August 4, 2022, we filed a Certificate of Amendment (the "Certificate of Amendment") to the A&R Charter with the Secretary of State of the State of Delaware, which effected a one-for-20 reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (the "Common Stock") at 5:01 PM Eastern Time on August 9, 2022.

Restatement of Previously Issued Financials Statements

As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2023, on November 10, 2023, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company, after consultation with management and discussions with Marcum LLP, the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2022, concluded that the sequence it used in applying the guidance in ASC 360-10-35 and ASC-350-10 was done out of order in determining whether an impairment of its definite-lived intangible assets existed as of September 30, 2022.

Under the guidance provided by ASC 360-10-35, the carrying amounts of any assets that are not within the scope of ASC 360-10, other than goodwill, should be adjusted for impairment, as necessary, prior to testing long-lived assets for impairment under ASC-350-10 and the carrying amount of assets within the scope of ASC 360-10 should be adjusted for impairment prior to testing goodwill for impairment under ASC 350-10.

Additionally, on January 2, 2024, the Audit Committee, after consultation with management and discussions with Marcum LLP, concluded that the that the Company's ERP system capitalized cost was impaired due to the system not being able to be sold separately from the business, and the current enterprise value of the business does not support the carrying value of the ERP system.

As a result, the carrying balance of definite-lived intangible assets and property and equipment was overstated in the Company’s previously issued unaudited consolidated financial statements for the quarterly period ended September 30, 2022, which also impacted the audited consolidated financial statements for the annual period ended December 31, 2022, and the quarterly unaudited consolidated financial statements for the quarterly periods ended March 31, 2023 and June 30, 2023 (collectively, the “Affected Periods”), as well as the relevant portions of any communication or filings which describe or are

based on such financial statements, and therefore these financial statements for the Affected Periods should no longer be relied upon and are to be restated.

Management prepared a quantitative and qualitative analysis of these errors in accordance with the U.S.

SEC Staff's Accounting Bulletin Nos.

99 and 108, Materiality, and concluded the aggregate impact of the error is material to the Company's previously reported financial statements for the Affected Periods.

As a result, the accompanying financial statements and related notes hereto, as of and for the three and six months ended June 30, 2023, respectively, have been restated to correct these errors.

These changes are to non-cash items and do not change the Company’s reported operating revenues or costs of goods sold, however, the Company determined that these changes have a material impact on the as-filed financial statements for the Affected Periods, and as a result, the restatement of the Affected Periods is required.

There was no impact to net cash flows related to operating, financing or investing activities for any of the Affected Periods.

The following tables present the net impact of the restatement described above on our previously reported unaudited condensed financial statements for three and six months ended June 30, 2023.

The previously reported amounts presented in the tables below have been derived from our Quarterly Report on Form 10-Q filed on August 14, 2023.

GREENLANE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2023

(in thousands, except par value per share amounts) As previously reported Corrections

(a) As restated

Property and equipment, net

$ 10,323 $ ( 6,736 ) $ 3,587

Intangible assets, net $ 46,630 $ ( 46,630 ) $ —

Total assets $ 114,483 $ ( 53,366 ) $ 61,117

STOCKHOLDERS’ EQUITY

Additional paid-in capital

$ 266,912 $ ( 2,636 ) $ 264,276

Accumulated deficit $ ( 192,092 ) $ ( 50,747 ) $ ( 242,839 )

Total stockholders’ equity attributable to Greenlane Holdings, Inc.

$ 75,095 $ ( 53,383 ) $ 21,712

Non-controlling interest $ ( 45 ) $ 17 $ ( 28 )

Total stockholders’ equity $ 75,050 $ ( 53,366 ) $ 21,684

Total liabilities and stockholders’ equity $ 114,483 $ ( 53,366 ) $ 61,117

GREENLANE HOLDINGS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the three months ended June 30, 2023 For the six months ended June 30, 2023

(in thousands, except share and per share amounts) As previously reported Corrections (a) As restated As previously reported Corrections (a) As restated

Operating expenses:

Depreciation and amortization 1,978 ( 1,501 ) 477 3,970 ( 3,002 ) 968

Total operating expenses 14,103 ( 1,501 ) 12,602 29,273 ( 3,002 ) 26,271

Loss from operations ( 9,529 ) 1,501 ( 8,028 ) ( 19,180 ) 3,002 ( 16,178 )

Loss before income taxes ( 10,532 ) 1,501 ( 9,031 ) ( 20,779 ) 3,002 ( 17,777 )

Net loss ( 10,525 ) 1,501 ( 9,024 ) ( 20,773 ) 3,002 ( 17,771 )

Net loss attributable to Greenlane Holdings, Inc.

$ ( 10,533 ) $ 1,501 $ ( 9,032 ) $ ( 20,727 ) $ 3,002 $ ( 17,725 )

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

$ ( 6.56 ) $ 0.91 $ ( 5.65 ) $ ( 12.96 ) $ 1.88 $ ( 11.08 )

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

1,599 — 1,599 1,599 — 1,599

Comprehensive loss

( 10,498 ) 1,501 ( 8,997 ) ( 20,568 ) 3,002 ( 17,566 )

Comprehensive loss attributable to Greenlane Holdings, Inc.

$ ( 10,490 ) $ 1,501 $ ( 8,989 ) $ ( 20,560 ) $ 3,002 $ ( 17,558 )

*After giving effect to the Reverse Stock Splits - see Note 2 - Summary of Significant Accounting Policies.

GREENLANE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

Common Stock Class B

Common Stock Additional

Capital* Accumulated

Deficit Accumulated

Comprehensive

Income (Loss) Non-

Interest Total

Stockholders’

(in thousands) Shares

Balance As previously reported

Balance December 31, 2022 1,599 $ 15 — $ — $ 266,653 $ ( 171,365 ) $ 55 $ 1 $ 95,359

Net loss for the three months ended March 31, 2023 — $ — — $ — $ — $ ( 10,194 ) $ — $ ( 54 ) $ ( 10,248 )

Balance Balance March 31, 2023 1,599 $ 15 — $ — $ 266,858 $ ( 181,559 ) $ 233 $ ( 53 ) $ 85,494

Net loss for the three months ended June 30, 2023 — $ — — $ — $ — $ ( 10,533 ) $ — $ 8 $ ( 10,525 )

Balance Balance June 30, 2023 1,598 $ 15 — $ — $ 266,912 $ ( 192,092 ) $ 260 $ ( 45 ) $ 75,050

Balance Restatement impacts (a)

Balance December 31, 2022 — $ — — $ — $ ( 2,636 ) $ ( 53,749 ) $ — $ 17 $ ( 56,368 )

Net loss for the three months ended March 31, 2023 — $ — — $ — $ — $ 1,501 $ — $ — $ 1,501

Balance Balance March 31, 2023 — $ — — $ — $ ( 2,636 ) $ ( 52,248 ) $ — $ 17 $ ( 54,867 )

Net loss for the three months ended June 30, 2023 — $ — — $ — $ — $ 1,501 $ — $ — $ 1,501

Balance Balance June 30, 2023 — $ — — $ — $ ( 2,636 ) $ ( 50,747 ) $ — $ 17 $ ( 53,366 )

Balance As restated

Balance 12/31/2022 (As restated) 1,599 $ 15 — $ — $ 264,017 $ ( 225,114 ) $ 55 $ 18 $ 38,991

Net loss for the three months ended March 31, 2023 (As restated) — $ — — $ — $ — $ ( 8,693 ) $ — $ ( 54 ) $ ( 8,747 )

Balance Balance March 31, 2023 (As restated) 1,599 $ 15 — $ — $ 264,222 $ ( 233,807 ) $ 233 $ ( 36 ) $ 30,627

Net loss for the three months ended June 30, 2023 (As restated) — $ — — $ — $ — $ ( 9,032 ) $ — $ 8 $ ( 9,024 )

Balance Balance June 30, 2023 (As restated) 1,598 $ 15 — $ — $ 264,276 $ ( 242,839 ) $ 260 $ ( 28 ) $ 21,684

*After giving effect to the Reverse Stock Splits - see Note 2 - Summary of Significant Accounting Policies.

GREENLANE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2023

(in thousands) As previously reported Corrections

(a) As restated

Cash flows from operating activities:

Net loss (including amounts attributable to non-controlling interest) $ ( 20,773 ) $ 3,002 $ ( 17,771 )

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

Depreciation and amortization $ 3,970 $ ( 3,002 ) $ 968

Net cash provided by operating activities $ 4,656 $ — $ 4,656

Cash flows from investing activities:

Net cash used in investing activities $ ( 253 ) $ — $ ( 253 )

Cash flows from financing activities:

Net cash used in financing activities $ ( 12,133 ) $ — $ ( 12,133 )

Net (decrease) in cash and restricted cash $ ( 7,525 ) $ — $ ( 7,525 )

Cash and restricted cash, as of beginning of the period $ 12,176 $ — $ 12,176

Cash and restricted cash, as of end of the period $ 4,651 $ — $ 4,651

(a) To reflect the reversal of amortization expense recognized during the three and six months ended June 30, 2023.

Reverse Stock Splits

On August 4, 2022, we filed a Certificate of Amendment to the A&R Charter with the Secretary of State of the State of Delaware (the "SSSD"), which effected a one-for-20 reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock") at 5:01 PM Eastern Time on August 9, 2022.

As a result of the 2022 Reverse Stock Split, every 20 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 2022 Reverse Stock Split.

The 2022 Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock.

All outstanding options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our Common Stock were adjusted as a result of the 2022 Reverse Stock Split, as required by the terms of each security.

The number of shares available to be awarded under our Amended and Restated 2019 Equity Incentive Plan were appropriately adjusted.

On June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected 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 at 5:01 PM Eastern Time on June 5, 2023.

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.

The 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.

See "Note 10 — Compensation Plans" for more information.

All 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 2022 Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital.

Proposed 2023 Reverse Stock Split and Series A Preferred Stock Issuance

On April 11 , 2023, our board of directors (the "Board") unanimously approved and declared advisable, and recommended that our stockholders (including holders of Series A Preferred Stock, as discussed below) approve at our annual meeting of shareholders the adoption of, an amendment (the “2023 Amendment”) to our A&R Charter to effect a reverse stock split of our Common Stock (the “Proposed 2023 Reverse Stock Split”) at any whole number between, and inclusive of, one-for-five to one-for-fifteen.

Approval of the proposal at our annual meeting, which is scheduled to occur on May 26, 2023 (the "2023 Annual Meeting"), will grant the Board the authority, but not the obligation, to file the 2023 Amendment to effect the Proposed 2023 Reverse Stock Split no later than November 20, 2023, with the exact ratio and timing of the Proposed 2023 Reverse Stock Split to be determined at the discretion of the Board.

The exact split ratio selected by the Board will be publicly announced prior to the effectiveness of the Proposed 2023 Reverse Stock Split.

In connection with the Proposed 2023 Reverse Stock Split, on April 26, 2023, the Board declared a dividend of one one-thousandth (1/1,000 th ) of a share of Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), for each outstanding share of Class A common stock to holders of record of Class A common stock as of 5:00 p.m.

Eastern Time on April 26, 2023.

The holders of Series A Preferred Stock have 1,000,000 votes per whole share of Series A Preferred Stock (i.e., 1,000 votes per one one-thousandth of a share of Series A Preferred Stock held) and are entitled to vote with the holders of Class A common stock, together as a single class, on the proposal to approve the 2023 Amendment in connection with the Proposed 2023 Reverse Split Proposal and to vote on a proposal to adjourn the annual meeting under certain circumstances, but holders of Series A Preferred Stock are otherwise not entitled to vote on the other proposals being presented at the annual meeting of stockholders.

Holders of Series A Preferred Stock are not entitled to receive dividends of any kind and such shares are subject to redemption no later than the time the Proposed 2023 Reverse Stock Split is approved by our stockholders.

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.

Liquidity and Going Concern

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with U.S.

GAAP applicable to a going concern.

This presentation contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described below.

Pursuant to ASC 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”) , management must evaluate whether there are conditions and events, considered in 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.

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

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from equity issuances, such as our June 2022 and October 2022 offerings, and our ATM program, each as described and defined below.

Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from equity issuances, such as our June 2022, October 2022 and July 2023 Offerings, and our ATM program, each as described and defined below.

ATM Program and Shelf Registration Statement

While we have an effective shelf registration statement on Form S-3 (the "Shelf Registr ation Statement") to conduct securities offerings from time to time, for so long as our public float is less than $75 million, our ability to utilize the Shelf Registration Statement to raise capital is limited, as further described below.

While we have an effective shelf registration statement on Form S-3 (the "Shelf Registration Statement") to conduct securities offerings from time to time, for so long as our public float is less than $75 million, our ability to utilize the Shelf Registration Statement to raise capital is limited, as further described below.

The Shelf Registration Statement registers the offer and sale of shares of our Class A common stock, preferred stock, $ 0.0001 par value per share (the "preferred stock"), depository shares representing our preferred stock, warrants to purchase shares of our Class A common stock, preferred stock or depository shares, and rights to purchase shares of our Class A common stock or preferred stock that may be issued by us in a maximum aggregate amount of up to $ 200 million.

6 unchanged sentences

We have sold $ 2.2 million in securities pursuant to Instruction I.B.6 in the 12 calendar months preceding the date of filing of this Quarterly Report on Form 10-Q.

Following the completion of the June 2022 Offering (as defined below) 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 time due to the restrictions under Instruction I.B.6 to Form S-3, which will limit our liquidity options in the capital markets for a period of time.

Due 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.

Common Stock and Warrant Offerings

On June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and sell an aggregate of 58,500 shares of our Class A common stock, pre-funded warrants to purchase up to 49,500 shares of our Class A common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 108,000 shares of our Class A common stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”), in a registered direct offering (the “June 2022 Offering”).

The June 2022 Offering generated gross

proceeds of approximately $5.4 million and net proceeds to the Company of approximately $5.0 million.

The June 2022 Offering generated gross proceeds of approximately $ 5.4 million and net proceeds to the Company of approximately $ 5.0 million.

All June 2022 Pre-Funded Warrants were exercised in July 2022, for de minimis net proceeds.

2 unchanged sentences

The October 2022 Offering generated gross proceeds of approximately $ 7.5 million and net proceeds to the Company of approximately $ 6.8 million.

On February 3, 2023, we filed a Registration Statement on Form S-1 (the "February 2023 S-1") seeking to register the public offering of up to $8.0 million in units (each comprised of one share of Class A common stock and two warrants to purchase Class A common stock), which has not yet become effective.

We can provide no assurances as to whether the February 2023 S-1 will become effective, or whether we will undertake this public offering following the filing of this Quarterly Report on Form 10-Q.

Entry into Asset-Based Loan

On 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.

Asset-Based Loan

On 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.

1 unchanged sentence

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.

On 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 13 - Subsequent Events" for more information.

On February 16, 2023, two of our wholly owned subsidiaries, Warehouse Goods and Kim International LLC, entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $ 4.85 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.

Future Receivables Financings

On July 31, 2023 and August 3, 2023, the Company received an aggregate of approximately $ 3.0 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 .

See "Note 13 - Subsequent Events" for more information.

Management Initiatives

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We launched Groove, a new, innovative Greenlane Brands product line, which is accretive to gross profit, 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 successfully entered into two strategic partnerships which management believes will help significantly reduce our overall cost structure, enhance our margins and further support our faciliti es consolidation initiatives while also servicing and providing solutions to our customers.

In April 2023, we successfully entered into two strategic partnerships which management believes will help significantly reduce our overall cost structure, enhance our margins and further support our facilities consolidation initiatives while also servicing and providing solutions to our customers.

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.

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We have reduced our workforce by approximately 49 % throughout fiscal year 2022 to reduce costs and align with our revenue projections.

We believe tha t our cash on hand and cash flow from operating activities 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 at least the next 12 months.

Our opinions concerning liquidity are based on currently available information.

To the extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources of financing may be reduced and our

liquidity could be adversely affected.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all.

The Company has incurred net losses of 17.8 million and $ 182.2 million for the six months ended June 30, 2023 and the year ended December 31, 2022, respectively.

For the six months ended June 30, 2023, cash provided by operating activities was 4.7 million, which included $ 4.85 million of cash from the ERC sale discussed above, and cash used in operating activities for the year ended December 31, 2022 was $ 26.4 million.

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.

As 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:

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

▪ Increasing revenue by introducing new products and acquiring new customers.

▪ Execute on strategic partnerships accretive to margins and operating cash

▪ Seeking additional capital through the issuance of debt or equity securities.

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

Use of Estimates

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the collectability of accounts receivable;

the allowance f or slow-moving or obsolete inventory;

the allowance for slow-moving or obsolete inventory;

the realizability of deferred tax assets;

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

As of March 31, 2023, we had two reportable operating business segments:

As of June 30, 2023, we had two reportable operating business segments:

Industrial Goods and Consumer Goods.

Our reportable segments have 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, manages our business, makes resource allocation and operating decisions, and evaluates operating performance.

Our reportable segments have 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.

See “Note 12—Segment Reporting.”

Revenue Recognition

Our liability for returns, which is included within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheets, was approximately $0.3 million and $0.3 million as of March 31, 2023 and December 31, 2022.

One customer represented approximately 26% of our net sales for the three months ended March 31, 2023.

For the three months ended March 31, 2022, one customer represented approximately 17% of our net sales.

As of March 31, 2023, two customers represented approximately 21% and 15% of accounts receivable, respectively.

Our liability for returns, which is included within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheets, was approximately $ 0.1 million and $ 0.3 million as of June 30, 2023 and December 31, 2022, respectively.

For the three and six months ended June 30, 2023, one customer represented approximately 38 % and 32 % of our net sales.

For the three and six months ended June 30, 2022, one customer represented approximately 21 % and 19 % of our net sales.

As of June 30, 2023, two customers represented approximately 16 % and 16 % of accounts receivable, respectively.

As of December 31, 2022, the Company had three customers who individually represented approximately 31 %, 17 % and 15 % of accounts receivable, respectively.

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We 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 $0.4 million relating to this matter within "Accrued expenses and other current liabilities” in our condensed consolidated balance sheet as of March 31, 2023 and December 31, 2022.

Based on this analysis, we recorded VAT payable of approximately $ 0.4 million relating to this matter within "Accrued expenses and other current liabilities” in our condensed consolidated balance sheet as of June 30, 2023 and December 31, 2022.

Pursuant 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.

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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.

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.

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Adoption of this standard did not impact our condensed consolidated financial statements, as we did not complete any transactions to which this standard was applicable during the current reporting period.

Recently Issued Accounting Guidance Not Yet Adopted

In 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 standard.

BUSINESS ACQUISITIONS

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The 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.

As of March 31, 2023 and December 31, 2022, we had contingent consideration that is required to be measured at fair value on a recurring basis.

As of June 30, 2023 and December 31, 2022, we had contingent consideration that is required to be measured at fair value on a recurring basis.

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

Condensed Consolidated

Balance Sheet Caption Fair Value at March 31, 2023

Balance Sheet Caption Fair Value at June 30, 2023

(in thousands) Level 1 Level 2 Level 3 Total

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Total Liabilities $ — $ — $ 2,738 $ 2,738

There were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three months ended March 31, 2023 and 2022.

There were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three and six months ended June 30, 2023 and 2022, respectively.

Derivative Instrument and Hedging Activity

On July 11, 2019, we entered into an interest rate swap contract to manage our risk associated with the interest rate fluctuations on the Company’s floating rate Real Estate Note described in “ Note 6 - Debt.

” The counterparty to this instrument was a reputable financial institution.

Our interest rate swap contract was designated as a cash flow hedge at the inception date and was previously reflected at its fair value in our consolidated balance sheets.

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During the second quarter of 2022, we also reclassified the related accumulated other comprehensive income balance of $ 0.3 million to "interest expense" in our condensed consolidated statement of income and comprehensive loss.

Refer to “ Note 8 — Supplemental Financial Information ” for further details on the components of accumulated other comprehensive income (loss) for the three months ended March 31, 2023 and 2022 .

Refer to “Note 8 — Supplemental Financial Information” for further details on the components of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022, respectively.

The unrealized loss on the derivative instrument prior to the discontinuation of hedge accounting was included within “Other comprehensive income (loss)” in our condensed consolidated statement of operations and comprehensive loss.

There was no measure of hedge ineffectiveness and no reclassifications from other comprehensive loss into interest expense for the three months ended March 31, 2023 and 2022 .

There was no measure of hedge ineffectiveness and no reclassifications from other comprehensive loss into interest expense for the three months ended June 30, 2022.

In August 2022, we terminated the interest swap contract.

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A 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:

(in thousands) Three months ended

March 31, 2023

(in thousands) Six Months Ended

June 30, 2023

Balance at December 31, 2022 $ 2,738

Cash payments for earned contingent consideration ( 300 )

Loss (gain) from fair value adjustments included in results of operations 103

Balance March 31, 2023 $ 2,738

(in thousands) Three months ended

March 31, 2022

Balance at June 30, 2023 $ 2,541

(in thousands) Six Months Ended

June 30, 2022

Balance at December 31, 2021 $ 6,857

Eyce 2021 Contingent Payment settlement in Class A common stock ( 875 )

Eyce 2021 Contingent Payment settlement in cash ( 875 )

DaVinci 2021 Contingent Payment settlement in Class A common stock ( 2,611 )

Gain from fair value adjustments included in results of operations (5)

Balance March 31, 2022 $ 3,366

Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA ( 267 )

Loss from fair value adjustments included in results of operations 359

Balance June 30, 2022 $ 2,588

Equity Securities Without a Readily Determinable Fair Value

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

We did not identify any fair value adjustments related to these equity securities during the three months ended March 31, 2023 and 2022.

As of March 31, 2023 and December 31, 2022, the carrying value of our investment in equity securities without a readily determinable fair value was approximately $2.5 million, respectively, included within "Other assets" in our condensed consolidated balance sheets.

We did not identify any fair value adjustments related to these equity securities during the three and six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, the carrying value of our investment in equity securities without a readily determinable fair value was approximately $ 2.5 million, respectively, included within "Other assets" in our condensed consolidated balance sheets.

The carrying value included a fair value adjustment of $ 1.5 million due to an observable price change recognized during the year ended December 31, 2019.

Greenlane as a Lessee

As of March 31, 2023, we had facilities financed under operating leases consisting of warehouses, offices, and a retail store, with lease term expirations from 2023 to 2027.

As of June 30, 2023, we had facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2023 and 2027.

Lease terms are generally three to seven years for warehouses, office space and retail store locations.

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 finance and operating lease liabilities recorded in our condensed consolidated balance sheet as of March 31, 2023.

The following table provides details of our future minimum lease payments under finance and operating lease liabilities recorded in our condensed consolidated balance sheet as of June 30, 2023.

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

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Long-term portion $ 1,473

Rent expense under operating leases was approximately $ 0.6 million and $ 1.2 million for three and six months ended June 30, 2023, respectively, and approximately $ 0.7 million and $ 1.4 million for the three and six months ended June 30, 2022, 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 loss:

For the three months ended

For the six months ended

(in thousands) 2023 2022

Operating lease cost

$ 1,041 $ 1,406

Variable lease cost

Total lease cost $ 1,184 $ 1,453

The table below presents lease-related terms and discount rates as of March 31, 2023:

Operating Leases

Operating leases 2.4 years

The table below presents lease-related terms and discount rates as of June 30, 2023:

Operating Leases

Weighted average remaining lease terms 2.4 years

Weighted average discount rate 2.3 %

Greenlane as a Lessor

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2024 and thereafter —

Total $ 96,000

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

(in thousands) March 31, 2023 December 31, 2022

(in thousands) June 30, 2023 December 31, 2022

Line of Credit $ 5,548 $ 15,000

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Eyce Promissory Note — 647

10,705 18,185

Less unamortized debt issuance costs ( 2,207 ) ( 1,960 )

Less current portion of debt ( 2,334 ) ( 3,185 )

Debt, net, excluding operating leases and finance leases $ 5,535 $ 13,040

Debt, net, excluding operating and finance leases $ 2,591 $ 13,040

Real Estate Note

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On the closing date, the Company used a portion of the proceeds from the transaction to repay the remainder of the Real Estate Note in full.

There was no remaining balance related to the Real Estate Note on our consolidated balance sheet as of March 31, 2023 or December 31, 2022.

There was no remaining balance related to the Real Estate Note on our consolidated balance sheet as of June 30, 2023 or December 31, 2022.

Eyce Promissory Note

In March 2021, one of the Operating Company's wholly-owned subsidiaries financed the acquisition of Eyce through the issuance of an unsecured promissory note (the “Eyce Promissory Note”) in the principal amount of $2.5 million.

Principal payments plus accrued interest at a rate of 4.5% were due quarterly through April 2023.

In March 2021, one of the Operating Company's wholly-owned subsidiaries financed a portion of the consideration of the acquisition of Eyce through the issuance of an unsecured promissory note (the "Eyce Promissory Note") in the principal amount of $ 2.5 million.

Principal payments plus accrued interest at a rate of 4.5 % are due quarterly through April 2023.

As of June 30, 2023, the Eyce Promissory Note was repaid in full, and there was no remaining balance on our condensed consolidated balance sheet.

DaVinci Promissory Note

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Asset-Based Loan

On August 9, 2022, we entered into an asset-based loan pursuant to that certain Loan and Security Agreement, dated as of August 8, 2022 (the “Loan Agreement”), by and among the Company, certain subsidiaries of the Company (the “Guarantors”), the parties thereto from time to time as lenders (the “Lenders”), and WhiteHawk Capital Partners LP, as the agent for the Lenders (the "Asset-Based Loan").

Pursuant to the Loan Agreement, the Lenders agreed to make available to us a term loan of up to $ 15.0 million on the terms and conditions set forth therein and the other Financing Agreements (as defined therein).

As of December 31, 2022, of the total term loan amount, $5.7 million was located in a blocked account, which was classified as “restricted cash” on our consolidated balance sheet, and which released the funds when permitted by the borrowing base certificate.

As of December 31, 2022, of the total term loan amount, $ 5.7 million was located in a blocked account, which was classified as “restricted cash” on our condensed consolidated balance sheet, and which released the funds when permitted by the borrowing base certificate.

Subject to certain exceptions described in the Loan Agreement, the Company and the Guarantors agreed to pledge all of their assets as collateral.

The maturity date of the Asset-Based Loan is the third anniversary of the closing date (the “Maturity Date”).

We incurred $1.5 million of debt issuance costs related to the Asset-Based Loan, as well as an original issue discount of $0.5 million, which were recorded as a direct deduction from the carrying amount of the Asset-Based Loan, and which are amortized over the term of the Asset-Based Loan through interest expense.

The Asset-Based Loan contains customary covenants and restrictions, including, without limitation, covenants that require us to comply with applicable laws, restrictions on our ability to incur additional indebtedness, and various customary remedies for the lender following an event of default, including the acceleration of repayment of outstanding amounts under the Asset-Based Loan and execution upon the collateral securing obligations under the Asset-Based Loan.

The Asset-Based Loan accrues interest at the prime rate plus 8.0% and interest payments are due monthly.

Based on the original terms, beginning with the fiscal quarter ending September 30, 2023, and for each fiscal quarter thereafter until the Maturity Date, quarterly payments of $0.3 million are due, with a final payment of all remaining outstanding principal and accrued interest due on the Maturity Date.

We incurred $ 1.5 million of debt issuance costs related to the Asset-Based Loan, as well as an original issue discount of $ 0.5 million, which were recorded as a direct deduction from the carrying amount of the Asset-Based Loan, and which were amortized through interest expense over the term of the Asset-Based Loan.

The Asset-Based Loan contained customary covenants and restrictions, including, without limitation, covenants that required us to comply with applicable laws, restrictions on our ability to incur additional indebtedness, and various customary remedies for the lender following an event of default, including the acceleration of repayment of outstanding amounts under the Asset-Based Loan and execution upon the collateral securing obligations under the Asset-Based Loan.

The Asset-Based Loan accrued interest at the prime rate plus 8.0 % and interest payments were due monthly.

Based on the original terms, beginning with the fiscal quarter ending September 30, 2023, and for each fiscal quarter thereafter until the Maturity Date, quarterly payments of $ 0.3 million would be due, with a final payment of all remaining outstanding principal and accrued interest due on the Maturity Date.

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

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Amendment No.

2 to the Loan Agreement also provides that we will make additional prepayments upon the occurrence of certain specified asset sales by the Company.

As of March 31, 2023, we were in compliance with the Loan Agreement covenants.

2 to the Loan Agreement also provided that we would make additional prepayments upon the occurrence of certain specified asset sales by the Company.

On 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 13 - Subsequent Events" for more information.

As of June 30, 2023, we were in compliance with the Loan Agreement covenants.

COMMITMENTS AND CONTINGENCIES

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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 three months ended March 31, 2023 and 2022.

We have not taken any reserves for litigation for the three and six months ended June 30, 2023 and 2022, respectively.

Other Contingencies

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

(in thousands) March 31, 2023 December 31, 2022

(in thousands) June 30, 2023 December 31, 2022

VAT payable (including amounts related to VAT matter described in Note 2) $ 3,258 $ 2,809

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Customer Deposits

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.

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, 2023 were as follows:

Changes in our customer deposits liability balance during the six months ended June 30, 2023 were as follows:

(in thousands) Customer Deposits

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Revenue recognized ( 3,832 )

Balance as of March 31, 2023 $ 3,224

Balance as of June 30, 2023 $ 2,938

Accumulated Other Comprehensive Income (Loss)

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Other comprehensive income (loss) 205 — 205

Balance at March 31, 2023 $ 233 $ — $ 233

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

Balance at June 30, 2023 $ 260 $ — $ 260

(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total

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Other comprehensive income (loss) 26 358 384

Reclassification adjustment for (gain) loss included in net loss (Note 4) — ( 332 ) ( 332 )

Other comprehensive (income) loss attributable to non-controlling interest ( 17 ) ( 68 ) ( 85 )

Balance at March 31, 2022 $ 353 $ 332 $ 685

Balance at June 30, 2022 $ 291 $ — $ 291

Supplier Concentration

Our four largest vendors accounted for an aggregate of approximately 79.7% and 67.0% of our total purchases for the three months ended March 31, 2023 and 2022, respectively.

Our four largest vendors accounted for an aggregate of approximately 89.9 % and 82.2 % of our total purchases for the three and six months ended June 30, 2023, respectively, and an aggregate of approximately 83.3 % and 74.0 %.

of our total purchases for the three and six months ended June 30, 2022, respectively.

We expect to maintain our relationships with these vendors.

Related Party Transactions

Nicholas Kovacevich, our Chief Corporate Development Officer, owns capital stock of Unrivaled Brands Inc.

Nicholas Kovacevich, our former Chief Corporate Development Officer, owns capital stock of Unrivaled Brands Inc.

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

Net sales to Unrivaled for the three months ended March 31, 2023 and 2022 were $0 and approximately $0.2 million, respectively.

Total accounts receivable due from Unrivaled were $0.4 million as of March 31, 2023 and December 31, 2022, respectively.

Net sales to Unrivaled for the three and six months ended June 30, 2023 and 2022 were $ 0 and approximately $ 0.2 million, respectively.

Total accounts receivable due from Unrivaled were $ 0.4 million as of June 30, 2023 and December 31, 2022, respectively.

On February 8, 2023, we filed a lawsuit against Unrivaled in Superior Court of California, Orange County, seeking to compel the repayment of Unrivaled's open balance due to us.

We can provide no assurances that we will be successful in this lawsuit, or that the amounts due to us, or any portion thereof, will be recovered.

Adam Schoenfeld, our co-founder and a former director who resigned from the Board on January 6, 2023, has a significant ownership interest in one of our customers, Universal Growing.

There were no net sales to Universal Growing for the three months ended March 31, 2023 and 2022.

Total accounts receivable due from Universal Growing as of March 31, 2023 and December 31, 2022 were de minimis.

STOCKHOLDERS’ EQUITY

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).

Our Class A common stock entitles the record holder thereof to one vote on all matters on which stockholders generally are entitled to vote, and except as otherwise required in the A&R Charter, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of preferred stock).

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).

Effective August 9, 2022, we completed a one-for-20 reverse stock split (the “2022 Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock"), as further described in "Note 2 - Summary of Significant Accounting Policies." As a result of the 2022 Reverse Stock Split, every 20 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 2022 Reverse Stock Split.

The 2022 Reverse Stock Split 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 2022 Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital.

Refer to "Note 13 — Subsequent Events" for additional details regarding the issuance of Preferred Series A Stock and the Proposed 2023 Reverse Stock Split.

Effective 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.

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

Non-Controlling Interest

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333-257654), and a prospectus supplement relating to the Class A common stock that was filed with the Securities and Exchange Commission on April 18, 2022.

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 12-month period so long as the Company’s public float remains below $75.0 million.

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.

On April 18, 2022, we entered into Amendment No.

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

Following the completion of the June 2022 Offering 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 time due to the restrictions under Instruction I.B.6 to Form S-3, which will limit our liquidity options in the capital markets.

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

($ in thousands) August 2021 (Inception) through

March 31, 2023

June 30, 2023

Class A shares sold* 97,262

Gross proceeds $ 12,684

Net proceeds $ 12,303

Fees paid to sales agent $ 381

*After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022.

Net proceeds $ 12,303

*After giving effect to the Reverse Stock Splits.

Common Stock and Warrant Offerings

June 2022 Offering

On June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and sell an aggregate of 585,000 shares of our Class A common stock, pre-funded warrants to purchase up to 495,000

shares of our Class A common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 1,080,000 shares of our Class A common stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”), in a registered direct offering (the “June 2022 Offering”).

The shares of Class A common stock and June 2022 Warrants were sold in Units (the “June 2022 Units”), with each unit consisting of one share of Class A common stock or a June 2022 Pre-Funded Warrant and a June 2022 Standard Warrant to purchase one share of our Class A common stock.

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The June 2022 Standard Warrants are exercisable six months from the date of issuance at an exercise price equal to $ 5.00 per share of Class A common stock for a period of five years .

Each June 2022 Pre-Funded Warrant was exercisable six months from the date of issuance (as modified by the June 2022 Pre-Funded Warrant Waiver discussed below) with no expiration date for one share of Class A common stock at an exercise price of $0.002.

Each June 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $ 0.001 .

The June 2022 Offering generated gross proceeds of approximately $ 5.4 million and net proceeds to the Company of approximately $ 5.0 million.

On July 27, 2022, pursuant to Section 9 of the June 2022 Pre-Funded Warrants, we waived the Initial Exercise Date (as defined in the June 2022 Pre-Funded Warrants and permitted the June 2022 Pre-Funded Warrants to be exercisable immediately to reflect the business understanding between us and the investors in the June 2022 Offering with respect to the exercisability of the June 2022 Pre-Funded Warrants (the "June 2022 Pre-Funded Warrant Waiver").

All June 2022 Pre-Funded Warrants were exercised in July 2022, based upon which we issued an additional 49,500 shares of our Class A common stock, for de minimis net proceeds.

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All October 2022 Pre-Funded Warrants were exercised in November 2022, based upon which we issued an additional 137,778 shares of our Class A common stock, for de minimis net proceeds.

February 2023 Form S-1

On February 3, 2023, we filed a Registration Statement on Form S-1 (the "February 2023 S-1") seeking to register the public offering of up to $8.0 million in units, which has not yet become effective as of the date of this Quarterly Report on Form 10-Q.

We can provide no assurances as to whether the February 2023 S-1 will become effective, or whether we will undertake this public offering following the filing of this Quarterly Report on Form 10-Q.

July 2023 Offering

On 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 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.

As of the date of this Quarterly Report on Form 10-Q, 498,143 July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an additional 498,143 shares of our Class A common stock, for de minimis net proceeds.

In 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 1,344,367 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.

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 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 elements.

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 amounts):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands, except per share data) 2023 2022 2023 2022

(As restated) (As restated)

Net loss $ ( 9,024 ) $ ( 14,481 ) $ ( 17,771 ) $ ( 33,230 )

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Net loss per share of Class A common stock - basic and diluted* $ ( 5.65 ) $ ( 22.70 ) $ ( 11.08 ) $ ( 55.70 )

*After giving effect to the one-for-20 2022 Reverse Stock Split effective August 9, 2022.

For the three months ended March 31, 2023 and 2022, 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.

*After giving effect to the Reverse Stock Splits.

The June 2022 Pre-Funded Warrants, October 2022 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 and six months ended June 30, 2022, respectively, 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 and six months ended June 30, 2023 and 2022, 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, 2022.

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 and six months ended 2022, 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.

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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 -one-for-20 Reverse Stock Split, the total number of shares of Class A common stock authorized for issuance is 1,100,000 shares.

Following the effect of the Reverse Stock Splits, the total number of shares of Class A common stock authorized for issuance is 110,000 shares.

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 April 26, 2023, the Board, subject to stockholder approval at the 2023 Annual Meeting, approved a third amendment and restatement of the 2019 Plan (the "Third Amended Plan").

If approved at the 2023 Annual Meeting, the Third Amended Plan would, among other things, increase the number of shares of Class A common stock authorized for issuance under the Second Amended 2019 Plan by 2,098,627 shares to an aggregate of 3,198,627 shares.

For additional information about the Third Amended Plan, please see the Company's Definitive Proxy Statement filed with the SEC on April 27, 2023.

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 209,862 shares to an aggregate of 319,862 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.

Equity-Based Compensation Expense

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For the three months ended

June 30, For the six months ended

(in thousands) 2023 2022 2023 2022

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Total equity-based compensation expense $ ( 11 ) $ 431 $ 100 $ 1,304

Total remaining unrecognized compensation expense as of March 31, 2023 was as follows:

Total remaining unrecognized compensation expense as of June 30, 2023 was as follows:

Remaining Unrecognized Compensation Expense

March 31, 2023 Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized

June 30, 2023 Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized

(in thousands) (in years)

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federal and most applicable state and local income tax purposes.

As a partnership, the Operating Company is generally not subject to U.S.

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 is passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating Agreement.

The Operating Company is also subject to taxes in foreign jurisdictions.

Any taxable income or loss generated by the Operating Company was passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating Agreement.

The Operating Company was also subject to taxes in foreign jurisdictions.

We are a corporation subject to U.S.

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Starting in 2023, 100% of the Operating Company’s US income and expenses will be included in our US and state tax returns.

During the three months ended March 31, 2023 and 2022, 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, 2023 and December 31, 2022, 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 the provision for income taxes.

We do not record U.S.

income taxes on the undistributed earnings of our foreign subsidiaries, except for the Canadian subsidiary, based upon our intention to permanently reinvest undistributed earnings into working capital and further expansion of existing operations outside the United States.

In the event we are required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences.

During the three and six months ended June 30, 2023 and 2022, 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 June 30, 2023 and December 31, 2022, 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 the provision for income taxes.

Uncertain Tax Positions

For the three months ended March 31, 2023 and 2022, we did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period.

For the three and six months ended June 30, 2023 and 2022, 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.

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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, 2023 and December 31, 2022, respectively.

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 consolidated statements of operations and comprehensive (loss) income.

During the three months ended March 31, 2023 and 2022, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA.

Based on this assessment, our TRA liability was $ 0 as of June 30, 2023 and December 31, 2022, respectively.

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 and six months ended June 30, 2023 and 2022, respectively, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA.

SEGMENT REPORTING

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Our CODM is a committee comprised of our CEO and our CFO.

We determined we had two operating segments as of March 31, 2023, which are the same as our reportable segments:

We determined we had two operating segments as of June 30, 2023, which are the same as our reportable segments:

(1) Consumer Goods and (2) Industrial Goods.

These operating segments align with how we manage our business as of the first quarter of 2023.

These operating segments align with how we manage our business as of the second quarter of 2023.

The accounting policies of the reportable segments are the same as those described in "Note 2 - Summary of Significant Accounting Policies."

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Our CODM allocates resources to, and assesses the performance of, our two operating segments 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, 2023 and 2022, respectively.

There were no material intersegment sales during the three months ended March 31, 2023 and 2022.

The following table sets forth information by reportable segment for the three and six months ended June 30, 2023 and 2022, respectively.

There were no material intersegment sales during the three and six months ended June 30, 2023 and 2022, respectively.

For the three months ended

March 31, 2023 For the three months ended

March 31, 2022

June 30, 2023 For the three months ended

June 30, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

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Gross profit $ 1,803 $ 2,771 $ 4,574 $ 3,064 $ 5,035 $ 8,099

For the six months ended

June 30, 2023 For the six months ended

June 30, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

Net sales $ 13,835 $ 29,749 $ 43,584 $ 33,053 $ 53,397 $ 86,450

Cost of sales 9,745 23,746 33,491 27,167 45,216 72,383

Gross profit $ 4,090 $ 6,003 $ 10,093 $ 5,886 $ 8,181 $ 14,067

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

As of March 31, 2023 As of December 31, 2022

As of June 30, 2023 As of December 31, 2022

(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total

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SUBSEQUENT EVENTS

Amendment to Second Amended and Restated Bylaws

On April 11, 2023, the Board approved an amendment (the “Bylaw Amendment”) to the Second Amended and Restated Bylaws of the Company (the “Bylaws”), effective as of April 11, 2023.

The Bylaw Amendment amended and restated Article I, Section 1.6 of the Bylaws in their entirety to lower the number of holders of the shares entitled to vote at a meeting of stockholders constituting a quorum, in person or by proxy, from a majority to one-third.

Additional information about the Bylaw Amendment can be found in the Company's Current Report on Form 8-K filed with the SEC on April 12, 2023.

Proposed 2023 Reverse Stock Split

On April 11 , 2023, the Board unanimously approved and declared advisable, and recommended that our stockholders (including holders of Series A Preferred Stock, as discussed below) approve at our annual meeting of stockholders the adoption of the 2023 Amendment to effect a reverse stock split of our Common Stock at any whole number between, and inclusive of, one-for-five to one-for-fifteen.

Approval of the Proposed 2023 Reverse Stock Split at the 2023 Annual Meeting will grant the Board the authority, but not the obligation, to file the 2023 Amendment to effect the Proposed 2023 Reverse Stock Split no later than November 20, 2023, with the exact ratio and timing of the Proposed 2023 Reverse Stock Split to be determined at the discretion of the Board.

The exact split ratio selected by the Board will be publicly announced prior to the effectiveness of the Proposed 2023 Reserve Stock Split.

For additional information about the 2023 Annual Meeting and the Proposed 2023 Reverse Stock Split, please see the Company's Definitive Proxy Statement filed with the SEC on April 27, 2023.

Issuance of Series A Preferred Stock

In connection with the Proposed 2023 Reverse Stock Split, on April 26, 2023, the Board declared a dividend of one one-thousandth (1/1,000 th ) of a share of Series A Preferred Stock for each outstanding share of Class A common stock to holders of record of Class A common stock as of 5:00 p.m.

Eastern Time on April 26, 2023.

The holders of Series A Preferred Stock have 1,000,000 votes per whole share of Series A Preferred Stock (i.e., 1,000 votes per one one-thousandth of a share of Series A Preferred Stock) and are entitled to vote with the holders of Class A common stock, together as a single class, on the proposal to approve the 2023 Amendment in connection with the Proposed 2023 Reverse Split Proposal and to vote on a proposal to adjourn the annual meeting under certain circumstances, but holders of Series A Preferred Stock are otherwise not entitled to vote on the other proposals being presented at 2023 Annual Meeting.

For additional information about the Series A Preferred Stock and the 2023 Annual Meeting, please see the Company's Form 8-A filed with the SEC on April 26, 2023 and the Company's Definitive Proxy Statement filed with the SEC on April 27, 2023.

Asset-Based Loan Repayment

On 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.

Future Receivables Financings

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/A

Item 1. Financial Statements