PART I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Greenlane Holdings, Inc.'s unaudited condensed consolidated financial statements, highlighting increased cash and equity despite declining net sales and rising net losses [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Asset/Liability Category | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Cash | $5,724 | $899 | | Accounts receivable, net | $3,795 | $4,262 | | Inventories, net | $14,352 | $14,215 | | Total current assets | $28,117 | $23,772 | | Total assets | $31,777 | $28,631 | | Accounts payable | $8,710 | $9,787 | | Current portion of notes payable | $— | $7,674 | | Total current liabilities | $11,826 | $22,266 | | Total liabilities | $11,831 | $22,349 | | Total stockholders' equity | $19,946 | $6,282 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statements of Operations (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $788 | $2,652 | $2,257 | $7,578 | | Cost of sales | $786 | $1,641 | $1,534 | $5,055 | | Gross profit | $2 | $1,011 | $723 | $2,523 | | Total operating expenses | $3,258 | $4,506 | $7,455 | $9,998 | | Loss from operations | $(3,256) | $(3,495) | $(6,732) | $(7,475) | | Total other income (expense), net | $41 | $2,863 | $(350) | $2,352 | | Net loss | $(3,215) | $(632) | $(7,082) | $(5,123) | | Net loss attributable to Greenlane Holdings, Inc. | $(3,215) | $(615) | $(7,082) | $(5,106) | | Net loss per share - basic and diluted | $(3.18) | $(997.50) | $(13.92) | $(10,267.50) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' Equity Changes (in thousands) | Item | Balance Dec 31, 2024 | Net Loss (Q1 2025) | Issuance of Shares/Warrants | Exercise of Warrants | Net Loss (Q2 2025) | Balance June 30, 2025 | | :-------------------------- | :------------------- | :----------------- | :-------------------------- | :------------------- | :----------------- | :-------------------- | | Additional Paid-In Capital | $281,095 | — | $20,730 | — | $3 | $301,841 | | Accumulated Deficit | $(274,929) | $(3,867) | — | — | $(3,215) | $(282,011) | | Total Stockholders' Equity | $6,282 | $(3,867) | $20,730 | $0 | $(3,215) | $19,946 | - The Company's Class A common stock shares outstanding increased significantly from 3,023 at December 31, 2024, to **1,386,551 at June 30, 2025**, primarily due to the exercise of pre-funded warrants and issuance of Class A shares and warrants[8](index=8&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(7,895) | $(379) | | Net cash used in investing activities | $(68) | $(151) | | Net cash provided by financing activities | $12,788 | $237 | | Net increase (decrease) in cash | $4,825 | $(294) | | Cash as of end of the period | $5,724 | $169 | - The significant increase in cash provided by financing activities in 2025 was primarily due to **$20.7 million in proceeds from the February 2025 private placement**, offset by **$8.0 million in debt payments**[18](index=18&type=chunk)[253](index=253&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1. Business Operations and Organization](index=9&type=section&id=NOTE%201.%20BUSINESS%20OPERATIONS%20AND%20ORGANIZATION) - Greenlane Holdings, Inc. operates as a holding company for Greenlane Holdings, LLC, merchandising **cannabis accessories, vaporization solutions, and lifestyle products globally**, and has developed proprietary brands like Groove and Higher Standards, while holding licenses for Marley Natural and K.Haring products[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The Company effected a **one-for-seven hundred and fifty reverse stock split** on June 25, 2025, retroactively adjusting all share and per share amounts[32](index=32&type=chunk)[34](index=34&type=chunk) - Despite incurring net losses and significant cash usage in operating activities, management believes current cash on hand, including proceeds from the February 2025 Private Placement, will be **sufficient for the next 12 months**, contingent on executing a plan to **reduce costs, increase revenue, form strategic partnerships, and seek additional capital**[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - In February 2025, the Company completed a private placement raising approximately **$25.0 million** through the sale of Class A common stock and investor warrants, which was crucial for its liquidity[43](index=43&type=chunk)[44](index=44&type=chunk) - Management initiatives include **strategic marketing partnerships** (Mainstem, Cannabis Creative Group), **exclusive distribution agreements** (Green Gruff, Greentank, ALD Group Limited), **sales team restructuring, renegotiating vendor terms, and consolidating operational and digital footprints** to improve efficiency and reduce costs[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=14&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The Company's unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim reporting, with certain information condensed or omitted[63](index=63&type=chunk) - As of June 30, 2025, the Company manages its global business operations through **one reportable operating business segment**[66](index=66&type=chunk) - Revenue is recognized when customers obtain control of goods, measured by expected consideration, and reduced by discounts and return allowances, with the Company transitioning its Industrial segment from a commission revenue model back to recognizing gross revenue[67](index=67&type=chunk)[71](index=71&type=chunk) - Two customers accounted for approximately **30% and 18% of net sales** for the three and six months ended June 30, 2025, respectively, indicating significant customer concentration[72](index=72&type=chunk) [NOTE 3. Business Acquisitions and Dispositions](index=16&type=section&id=NOTE%203.%20BUSINESS%20ACQUISITIONS%20AND%20DISPOSITIONS) - The sale of EU subsidiaries Shavita B.V. and ARI Logistics B.V. in May 2024 is currently in dispute due to unmet consideration and monetary obligations from the purchasers, leading the Company to continue operations and pursue claims[76](index=76&type=chunk) [NOTE 4. Fair Value of Financial Instruments](index=16&type=section&id=NOTE%204.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) - The Company's investment in equity securities without readily determinable fair value, specifically Airgraft Inc., was approximately **$1.9 million** as of June 30, 2025, and December 31, 2024, with no fair value adjustments recorded during the periods[78](index=78&type=chunk)[79](index=79&type=chunk) [NOTE 5. Leases](index=17&type=section&id=NOTE%205.%20LEASES) Operating Lease Commitments (in thousands) | Period | Operating Leases | | :---------------------- | :--------------- | | Remainder of 2025 | $483 | | 2026 | $81 | | Total minimum lease payments | $564 | | Present value of minimum lease payments | $553 | | Long-term portion | $5 | Operating Lease Expenses (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | | Operating lease cost | $736 | $457 | | Total lease cost | $736 | $457 | [NOTE 6. Debt](index=18&type=section&id=NOTE%206.%20DEBT) Debt Balance (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | Note Payable | $— | $3,674 | | Exchange Note | $— | $4,000 | | Total Debt | $— | $7,674 | - All outstanding debt, including the Exchange Note and Note Payable to Cobra, was **fully repaid** during the six months ended June 30, 2025, primarily using proceeds from the February 2025 Private Placement[90](index=90&type=chunk)[95](index=95&type=chunk) - In 2024, the Company recorded a **gain on extinguishment of $2.1 million** related to the modification of the Secured Bridge Loan with Synergy, where Synergy acquired certain assets in exchange for debt reduction[98](index=98&type=chunk) [NOTE 7. Commitments and Contingencies](index=20&type=section&id=NOTE%207.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is involved in several legal proceedings, including an arbitration demand for **$320 thousand in unpaid legal invoices**, multiple purchaser class action antitrust lawsuits regarding Ccell products, a breach of contract suit for **$297 thousand**, and a Civil Investigation Demand concerning a **$1.9 million PPP loan** under the False Claims Act[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - No reserves for litigation have been taken for the three and six months ended June 30, 2025 and 2024, as the outcomes are inherently unpredictable[110](index=110&type=chunk) [NOTE 8. Supplemental Financial Statement Information](index=21&type=section&id=NOTE%208.%20SUPPLEMENTAL%20FINANCIAL%20STATEMENT%20INFORMATION) Property and Equipment, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Furniture, equipment and software | $8,595 | $8,595 | | Leasehold improvements | $33 | $33 | | Work in process | $88 | $20 | | Less: accumulated depreciation | $(7,535) | $(7,228) | | Property and equipment, net | $1,181 | $1,420 | Other Current Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | VAT refund receivable | $61 | $43 | | Prepaid expenses | $199 | $301 | | Non-inventory deposits | $952 | $952 | | Customs bonds | $500 | $— | | Total | $1,719 | $1,305 | Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Accrued employee compensation | $223 | $1,052 | | Accrued professional fees | $704 | $166 | | Other accrued expenses | $175 | $— | | Total | $1,102 | $1,218 | Customer Deposits (in thousands) | Item | Amount | | :------------------------------------ | :----- | | Balance as of December 31, 2024 | $2,661 | | Customer adjustments | $(1,063) | | Revenue recognized | $132 | | Balance as of June 30, 2025 | $1,466 | - The four largest vendors accounted for approximately **38.6% of total purchases** for the three months ended June 30, 2025, and **57.4% for the six months ended June 30, 2025**, indicating significant supplier concentration[119](index=119&type=chunk) [NOTE 9. Stockholders' Equity](index=24&type=section&id=NOTE%209.%20STOCKHOLDERS%27%20EQUITY) - The Company completed a **one-for-750 reverse stock split** on June 25, 2025, which retroactively adjusted all share and per share amounts in the financial statements[124](index=124&type=chunk)[125](index=125&type=chunk) - In February 2025, the Company consummated a private placement of approximately **$25.0 million of Class A common stock and investor warrants**, significantly impacting additional paid-in capital[130](index=130&type=chunk) - During the three months ended June 30, 2025, investors exercised **1,353,658 Series B warrants and 21,777 additional pre-funded warrants**, with no cash collected as they were pre-funded[133](index=133&type=chunk) Potentially Dilutive Securities Excluded from EPS Calculation (in common stock equivalent shares) | Security Type | As of June 30, 2025 | As of June 30, 2024 | | :-------------------------- | :------------------ | :------------------ | | Stock options | 5 | 5 | | Warrants | 31,552 | 1,032 | | Total | 31,557 | 1,037 | [NOTE 10. Compensation Plans](index=27&type=section&id=NOTE%2010.%20COMPENSATION%20PLANS) - The total number of Class A common stock shares authorized for issuance under the Amended and Restated 2019 Equity Incentive Plan is **10,000 shares**, after giving effect to the reverse stock splits[143](index=143&type=chunk) Equity-Based Compensation Expense (in thousands) | Expense Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | | Stock options - Class A common stock | $— | $— | | Restricted shares - Class A common stock | $— | $86 | | Total equity-based compensation expense | $— | $86 | [NOTE 11. Income Taxes](index=29&type=section&id=NOTE%2011.%20INCOME%20TAXES) - Effective December 31, 2022, the Operating Company became wholly owned by Greenlane, converting its tax status to a disregarded entity, meaning **100% of its U.S. income and expenses are now included in Greenlane's U.S. and state tax returns**[150](index=150&type=chunk) - The Company has established a **full valuation allowance** against its deferred tax assets, resulting in a carrying balance of **$0** as of June 30, 2025, and December 31, 2024, due to uncertainty regarding the realization of net operating loss benefits[151](index=151&type=chunk) - The Tax Receivable Agreement (TRA) liability was **none** as of June 30, 2025, and December 31, 2024, because the amount or timing of payments to noncontrolling interest holders is no longer probable or reasonably estimable due to the full valuation allowance on deferred tax assets[155](index=155&type=chunk) [NOTE 12. Segment Reporting](index=29&type=section&id=NOTE%2012.%20SEGMENT%20REPORTING) - As of June 30, 2025, Greenlane Holdings, Inc. operates as a **single reportable operating segment**, aligning with how management reviews financial information and allocates resources[158](index=158&type=chunk) Net Sales by Geography (in thousands) | Geography | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $788 | $1,364 | $2,257 | $5,214 | | Canada | $— | $70 | $— | $157 | | Europe | $— | $1,218 | $— | $2,207 | | Total net sales | $788 | $2,652 | $2,257 | $7,578 | Long-Lived Assets by Geographic Area (in thousands) | Geography | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | United States | $1,768 | $2,459 | | Canada | $— | $4 | | Europe | $— | $— | | Total long-lived assets | $1,768 | $2,463 | Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Cash | $5,724 | $899 | $4,825 | 536.7% | | Total Current Assets | $28,117 | $23,772 | $4,345 | 18.3% | | Total Assets | $31,777 | $28,631 | $3,146 | 11.0% | | Total Current Liabilities | $11,826 | $22,266 | $(10,440) | (46.9)% | | Total Liabilities | $11,831 | $22,349 | $(10,518) | (47.1)% | | Total Stockholders' Equity | $19,946 | $6,282 | $13,664 | 217.5% | Condensed Consolidated Statements of Operations Highlights (in thousands, except EPS) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net Sales | $788 | $2,652 | $(1,864) | (70.3)% | | Gross Profit | $2 | $1,011 | $(1,009) | (99.8)% | | Loss from Operations | $(3,256) | $(3,495) | $239 | 6.8% | | Net Loss | $(3,215) | $(632) | $(2,583) | (408.7)% | | Net Loss per Share (Basic & Diluted) | $(3.18) | $(997.50) | $994.32 | 99.7% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net Sales | $2,257 | $7,578 | $(5,321) | (70.2)% | | Gross Profit | $723 | $2,523 | $(1,800) | (71.3)% | | Loss from Operations | $(6,732) | $(7,475) | $743 | 9.9% | | Net Loss | $(7,082) | $(5,123) | $(1,959) | (38.2)% | | Net Loss per Share (Basic & Diluted) | $(13.92) | $(10,267.50) | $10,253.58 | 99.9% | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net Cash Used in Operating Activities | $(7,895) | $(379) | $(7,516) | (1983.1)% | | Net Cash Used in Investing Activities | $(68) | $(151) | $83 | 55.0% | | Net Cash Provided by Financing Activities | $12,788 | $237 | $12,551 | 5295.8% | | Net Increase (Decrease) in Cash | $4,825 | $(294) | $5,119 | (1741.8)% | | Cash at End of Period | $5,724 | $169 | $5,555 | 3286.9% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, noting significant declines in net sales and gross profit, increased net losses, and ongoing profitability initiatives - Greenlane is a global platform for **cannabis accessories, vape devices, and lifestyle products**, serving a diverse customer base including multi-state operators (MSOs), single-state operators (SSOs), Canadian licensed producers (LPs), specialty retailers, and direct consumers through various e-commerce platforms[170](index=170&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) - The Company's plan to accelerate profitability includes **technology enhancements, facility footprint rationalization, headcount reduction, improved inventory management, sales force upgrades, product innovation, and securing additional capital investment**[176](index=176&type=chunk)[178](index=178&type=chunk) - The United States Postal Service (USPS) approved Greenlane's PACT Act Exemption, allowing it to ship vaporizers and accessories classified as electronic nicotine delivery systems (ENDS) products to other compliant businesses, which is expected to **reduce shipping costs and improve fulfillment times**[179](index=179&type=chunk)[180](index=180&type=chunk) Consolidated Results of Operations (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | $788 | $2,652 | $(1,864) | (70)% | | Gross profit | $2 | $1,011 | $(1,009) | (100)% | | Salaries, benefits and payroll taxes | $1,119 | $1,509 | $(390) | (26)% | | General and administrative | $1,938 | $2,801 | $(863) | (31)% | | Loss from operations | $(3,256) | $(3,495) | $239 | (7)% | | Interest expense | $— | $(289) | $(289) | (100)% | | Net loss | $(3,215) | $(632) | $(2,583) | (409)% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | $2,257 | $7,578 | $(5,321) | (70)% | | Gross profit | $723 | $2,523 | $(1,800) | (71)% | | Salaries, benefits and payroll taxes | $2,386 | $4,455 | $(2,069) | (46)% | | General and administrative | $4,762 | $5,093 | $(331) | (7)% | | Loss from operations | $(6,732) | $(7,475) | $743 | 10% | | Interest expense | $(391) | $(811) | $420 | 52% | | Net loss | $(7,082) | $(5,123) | $(1,959) | (38)% | - The Company's cash balance increased to **$5.7 million** as of June 30, 2025, from **$0.9 million** at December 31, 2024, and working capital increased to **$16.3 million** from **$1.5 million**, largely due to the **$25.0 million February 2025 Private Placement**[221](index=221&type=chunk)[222](index=222&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Quantitative and qualitative disclosures regarding market risk are not required for the Company - The Company is not required to provide quantitative and qualitative disclosures about market risk[257](index=257&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective due to un-remediated material weaknesses, with ongoing remediation efforts and ERP system adaptation - As of June 30, 2025, the Company's disclosure controls and procedures were **not effective** due to un-remediated material weaknesses in internal control over financial reporting, as described in its Annual Report on Form 10-K for the year ended December 31, 2024[259](index=259&type=chunk) - Remediation efforts are actively underway, including **enhancing company-wide risk assessment, improving control documentation, implementing additional review procedures, improving segregation of duties, and providing training to control owners**[261](index=261&type=chunk) - The Company completed a multi-year implementation of a new ERP system in 2023, which is expected to lead to ongoing changes in internal control over financial reporting as processes and procedures are adapted[264](index=264&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 7 for details on material pending legal proceedings, including various lawsuits and investigations - For a description of material pending legal proceedings, refer to Note 7 of the Notes to Condensed Consolidated Financial Statements[267](index=267&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, highlighting significant losses, going concern uncertainty, potential Nasdaq delisting, and adverse impacts from tariffs and trade disputes - The Company has incurred net losses of **$7.1 million and $5.1 million** for the six months ended June 30, 2025 and 2024, respectively, and anticipates continued significant losses, raising substantial doubt about its ability to continue as a going concern[269](index=269&type=chunk) - The Company's ability to continue as a going concern is contingent upon successful execution of management's plan to improve liquidity and profitability, including **reducing operating costs, increasing revenue, executing strategic partnerships, and seeking additional capital**[269](index=269&type=chunk)[270](index=270&type=chunk) - Greenlane received a delisting notification from Nasdaq on May 5, 2025, but demonstrated compliance with the Bid Price Rule by July 29, 2025, though it remains under a **one-year Discretionary Panel Monitor** due to its history of compliance issues[272](index=272&type=chunk)[273](index=273&type=chunk) - New tariffs, including a **145% tariff** on substantially all products of Chinese origin (some temporarily paused at **30%**), and the evolving trade policy dispute between the U.S. and China, may adversely affect demand for the Company's products and its costs[274](index=274&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales of equity securities or issuer purchases of equity securities occurred during the period - There were no unregistered sales of equity securities or issuer purchases of equity securities during the period[275](index=275&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No other information is reported in this section - No other information is reported in this section[276](index=276&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including agreements, certifications, and XBRL financial statements - The exhibits include forms of warrants, securities purchase agreements, loan and security agreements, asset purchase agreements, loan modification agreements, certifications of executive officers, and Inline XBRL formatted financial statements[278](index=278&type=chunk)

Industry Overview - The cannabis industry is experiencing volatility, yet consumer demand for cannabis is growing globally [2][3] - Over half of the United States has legalized cannabis, generating billions in revenue, but federal banking measures are still lacking due to its classification as a Schedule 1 narcotic [2] Company Highlights - **Jushi Holdings Inc.**: A vertically integrated cannabis company involved in cultivation, processing, retail, and distribution for medical and adult-use markets in the U.S. [4] - **Recent Financial Performance**: Jushi reported Q2 2025 earnings with total revenue of $65.0 million, gross profit of $28.9 million (44.5% margin), and a net loss of $12.3 million [9] - **Planet 13 Holdings Inc.**: Engages in cultivating and providing cannabis products for medical and retail markets. They announced the introduction of "Planet the 13th Night Market" to support local creators [8][11] - **Greenlane Holdings, Inc.**: Focuses on the development and distribution of cannabis accessories and vape devices. Recently selected JointCommerce for its B2C e-commerce digital marketing platform [12][14] Investment Opportunities - Investors are encouraged to keep an eye on specific marijuana stocks that may present profitable opportunities in the future [3][8]

Industry Overview - The cannabis industry has faced challenges, with the market value dropping from projections of $30 billion to below that figure, yet there remains optimism for future growth due to potential federal reforms [2] - Current market conditions have led to a decline in marijuana stock prices, presenting potential entry points for investors [3] Company Highlights - **Green Thumb Industries Inc.**: Engaged in manufacturing, distributing, and selling cannabis products for medical and adult-use markets in the U.S. The company is set to hold a Q2 2025 earnings conference call on August 6, 2025 [4][6] - **Greenlane Holdings, Inc.**: Focuses on the development and distribution of cannabis accessories and lifestyle products. Recently selected JointCommerce as its B2C e-commerce digital marketing platform to enhance growth [7][8] - **Planet 13 Holdings Inc.**: Cultivates and provides cannabis products for medical and retail markets in the U.S. The company will report its Q2 2025 earnings on August 13, 2025, with a conference call to discuss financial results and business strategy [9][11]

Industry Overview - The cannabis industry is projected to exceed $45 billion by 2025, with strong growth expected over the next five years as demand for accessories and digital services increases [1][4] - Ancillary sectors such as technology, packaging, and paraphernalia are becoming essential, providing support without directly handling cannabis [1][4] Legislative Environment - Momentum for cannabis legalization is building, with new bills being introduced in key states and some regions expanding medical access or softening penalties [2] - Federal reform remains slow, causing fluctuations in cannabis stocks in response to news events [2] Investment Opportunities - Ancillary cannabis companies are seen as a smart investment for exposure to the cannabis sector without the legal risks associated with growers or dispensaries [1][4] - Key ancillary stocks to monitor include Leafly Holdings Inc. (LFLY), WM Technology Inc. (MAPS), and Greenlane Holdings Inc. (GNLN) [4][6] Company Profiles Leafly Holdings Inc. (LFLY) - Leafly is a leading online cannabis marketplace, serving millions of users and listing inventory from over 10,000 licensed dispensaries [5][7] - The company is facing financial strain, having shifted to over-the-counter trading, with anticipated Q1 2025 revenue around $8.5 million [7] - Leafly's primary revenue source is advertising, but operational losses are a concern, necessitating improved monetization and cost management [7] WM Technology Inc. (MAPS) - WM Technology, known as Weedmaps, connects consumers with licensed retailers and provides digital tools for over 5,000 cannabis businesses [8] - In Q1 2025, Weedmaps reported revenue of $44.6 million, maintaining positive adjusted operating income of $2.6 million, indicating financial stability [8] - The company is focusing on improving platform features and retaining long-term clients, despite a slowdown in new customer growth [8] Greenlane Holdings Inc. (GNLN) - Greenlane is a supplier of cannabis accessories and packaging, specializing in vaporizers and safety packaging, with operations across North America and abroad [9] - The company raised $25 million through a private placement in February 2025 and executed a 1-for-750 reverse stock split to meet Nasdaq standards [11] - Greenlane is undergoing restructuring efforts to stabilize and return to profitability, with revenue figures for Q1 yet to be disclosed [11] Market Sentiment - Ancillary cannabis companies are viewed as strong entry points for investors seeking exposure without direct investment in cultivation or retail [12] - Each company presents unique advantages and challenges, with July 2025 being a critical time to monitor their progress and consider investment opportunities [12]

Industry Overview - The cannabis industry continues to attract optimism among investors due to strong financial results from many ancillary and multi-state operators (MSOs) in the U.S. [1][2] - Despite market challenges, companies that remain profitable are seen as long-term investment opportunities, suggesting a potential recovery in the sector [2][3] - Legislative changes, such as rescheduling cannabis or passing banking measures, are anticipated to positively impact market dynamics, given the significant revenue generated in the U.S. [3] Company Highlights - **Planet 13 Holdings Inc.**: Engages in the cultivation and provision of cannabis products for medical and retail markets in the U.S. Recently held its Annual General Meeting, with notable director election results [4][6][7]. - **Greenlane Holdings, Inc.**: Focuses on the development and distribution of cannabis accessories and lifestyle products across multiple regions. Recently appointed Mike Hinson as Executive Vice President of Sales to enhance sales and marketing initiatives [8][10]. - **Jushi Holdings Inc.**: A vertically integrated cannabis company involved in cultivation, processing, and retail. Recently launched a lifestyle cannabis brand named 'Shayo', in collaboration with a reality TV star, aiming to promote wellness [12][13].

Group 1 - The marijuana sector is currently experiencing a downturn in trading, with companies facing challenges in market performance impacting their stock prices [1][2] - Federal reform and the rescheduling of cannabis are seen as crucial for the industry's growth and for creating a safer investment environment [2][3] - Companies are strategizing and remaining patient, with optimism for future gains keeping investors engaged despite current market conditions [3] Group 2 - Greenlane Holdings, Inc. focuses on the development and distribution of cannabis accessories and vape devices across multiple regions including the U.S., Canada, Europe, and Latin America [4][6] - The company renewed its distribution agreement with PAX, which enhances its portfolio and strengthens its market position in the growing cannabis vaporizer market [7] - Jushi Holdings Inc. is a vertically integrated cannabis company involved in cultivation, processing, retail, and distribution for both medical and adult-use markets in the U.S. [9]

Financial Instruments and Debt Management - The Company issued a note in the principal amount of $3,237,269 with a 20% original issue discount, due by February 5, 2025, or upon receiving at least $3,500,000 from a Qualified Offering[36]. - The Company raised $6.5 million through a securities purchase agreement, issuing 2,363,637 units, each consisting of one share of common stock and two common warrants exercisable at $2.50 per share[37]. - The Company received approximately $3.9 million in cash from future receivables financings in 2023, which was restructured to a total balance of $4.6 million due to inability to make prescribed monthly payments[38]. - The Company entered into an Exchange Agreement to reduce outstanding indebtedness by approximately $617,000, issuing new Senior Subordinated Notes of $4,000,000[40]. - The Company modified its debt agreement to reduce the principal balance by $2.7 million as part of an asset purchase agreement[47]. - The company recorded a loss on extinguishment of debt of $2.0 million for the year ended December 31, 2024[83]. - The company issued 1,261,830 warrants valued at $2.6 million as part of the debt extinguishment[84]. - The company entered into a secured loan agreement for $2.2 million on September 22, 2023, with potential deferrals of existing payment obligations totaling $2.0 million[92]. - On May 1, 2024, the Company entered into an asset purchase agreement with Synergy, resulting in a gain on extinguishment of $2.1 million and a debt modification gain of $2.2 million[93]. - The principal balance of the Secured Bridge Loan decreased from $5.1 million to $2.7 million as part of the asset acquisition[93]. - The Company recorded a loss on extinguishment of debt amounting to $1.0 million for the year ended December 31, 2024[94]. - The Company issued 500,000 common stock warrants valued at $1.0 million using the Black-Scholes model as part of the debt extinguishment[95]. Revenue and Sales Performance - For the three months ended March 31, 2025, the company reported a net loss of $3.867 million, resulting in a basic and diluted net loss per share of $0.32[126]. - Net sales for the three months ended March 31, 2025, were $1.469 million, a decrease of 70.2% compared to $4.926 million in the same period of 2024[148]. - Gross profit for the same period was $721,000, down from $1.512 million in 2024, indicating a decline of 52.3%[148]. - Three customers represented approximately 51% of net sales for the three months ended March 31, 2025[64]. - The company transitioned to a commission revenue model for the Industrial segment, recognizing revenue on a net basis for its services[63]. Operational Changes and Cost Management - The Company plans to reduce operating costs and increase revenue through new product introductions and customer acquisitions[35]. - The Company launched a new product line called Groove and rationalized its third-party brands to reduce inventory carrying costs[51]. - The Company entered into strategic partnerships to enhance service offerings and reduce costs, potentially impacting top-line revenue[52][53]. - The Company has successfully renegotiated vendor and supplier terms to improve working capital arrangements and streamline operations[54]. - The company has not recognized any equity-based compensation expense for the three months ended March 31, 2025, compared to $86,000 in the same period of 2024[135]. Assets and Liabilities - As of March 31, 2025, the Company reported total property and equipment, net of accumulated depreciation, of $1.33 million[106]. - The company had no outstanding debt as of March 31, 2025, down from $7.7 million as of December 31, 2024[79]. - The company reported accounts receivable of $4.899 million, an increase from $4.262 million as of December 31, 2024[148]. - The company’s long-lived assets totaled $2.145 million as of March 31, 2025, slightly down from $2.463 million at the end of 2024[148]. - Customer deposits decreased from $2.66 million as of December 31, 2024, to $2.53 million as of March 31, 2025, due to revenue recognition of $132,000[110]. - The four largest vendors accounted for approximately 78.8% of total purchases for the three months ended March 31, 2025[112]. Legal and Regulatory Matters - The Company received a Civil Investigation Demand regarding a potential violation of the False Claims Act related to a $1.9 million PPP loan[100]. - The Company intends to dispute a demand for arbitration for unpaid legal invoices amounting to $320,511.48[97]. Future Plans and Capital Raising - The Company plans to seek additional capital through the issuance of debt or equity securities[35]. - The company completed a private placement of approximately $25.0 million, selling shares at a price of $1.19 per Common Unit[122]. - The Company issued an aggregate of 58,000 shares of Class A common stock and warrants for gross cash proceeds of $6.5 million in an August 2024 private placement[117]. Miscellaneous - The company had an escrow balance of $1.7 million as of March 31, 2025, after $0.8 million was credited back to purchasers due to late filings[124]. - The company expects to settle the escrow receivable amount owed by December 31, 2025[124]. - The company has established a full valuation allowance against its deferred tax assets, reflecting a carrying balance of $0 as of March 31, 2025[138]. - No quantitative or qualitative disclosures about market risk were required in the report[225].

Core Insights - 3WIN Corp. has appointed Craig Snyder as the new CEO and member of the Board of Directors, effective April 17, 2025, following his role as Chief Transformation Officer [1][3] - Christopher J. Sinacori has transitioned to Executive Chairman of the Board and President, while Jeffrey A. Sinacori becomes Chief Operating Officer [2] - The leadership changes are aimed at enhancing operational performance and preparing the company for its public offering [3][8] Company Overview - 3WIN Corp. is a global wholesale distributor of CCELL® vape products, serving the cannabis and hemp markets [9] - The company offers customization services and packaging solutions to help brands stand out in competitive markets [9] - 3WIN's subsidiary, 3Win Holdings (Canada) Corp., focuses on the development and distribution of controlled substances under Canadian licenses [10][11] Leadership Experience - Craig Snyder brings over 25 years of leadership experience in high-tech and consumer products, with a history of driving growth and executing strategies in new markets [5][6] - His previous roles include senior leadership positions at Fortune 100 companies and guiding Nasdaq-listed startups through successful IPOs [5] - Snyder has extensive M&A experience, having led over 25 acquisitions and successfully exited two companies as CEO [6] Strategic Focus - As CEO, Snyder will cultivate relationships in capital markets and oversee initiatives to maximize operational performance and customer experience [3][4] - His role will involve ensuring efficient growth while staying ahead of industry trends, optimizing the company's structure and market positioning [4] - The leadership believes Snyder's experience will be instrumental in scaling operations to meet evolving customer needs [7][8]

Core Viewpoint - The implementation of tariffs is expected to create a ripple effect throughout the cannabis industry, impacting production costs, market prices, and the trading of marijuana stocks [1][2]. Industry Impact - Increased tariffs will likely raise import costs for essential materials in cannabis production, such as hydroponic systems and lighting equipment, leading to higher operational costs for cannabis farmers [1][2]. - As operational costs rise, cannabis operators may need to increase prices for their products, which could negatively affect top marijuana stocks in the short term [2]. Investment Perspective - Despite the current downturn in the cannabis sector, there are opportunities to find top marijuana stocks at lower prices, with investors speculating on a potential future turnaround [3]. - Investors are looking for signs of a stronger industry and success in the long term, indicating a hopeful outlook among cannabis stock shareholders [3]. Companies to Watch - **Green Thumb Industries Inc. (OTC:GTBIF)**: Engages in the manufacturing, distribution, marketing, and sale of cannabis products for medical and adult use in the U.S., operating through Retail and Consumer Packaged Goods segments [4][8]. - **Greenlane Holdings, Inc. (NASDAQ:GNLN)**: Focuses on the development and distribution of cannabis accessories and lifestyle products across the U.S., Canada, and Europe, operating in Consumer Goods and Industrial Goods segments [6][8]. - Greenlane has announced its strategy to deliver quality and a diverse selection of cannabis products, emphasizing value for customers [9].

Market Growth and Trends - Greenlane's legal cannabis market generated $26.5 billion in 2022, increasing to $31.4 billion in 2023, reflecting an 18.5% growth[32] - The number of U.S. states with legalized cannabis rose from 18 in 2022 to 23 in 2023, a 27.8% increase[32] - The number of cannabis users in the U.S. grew from 47 million in 2023 to 52.5 million in 2024, an 11.7% increase[32] - The Canadian cannabis market declined from CAD 5.5 billion in 2023 to CAD 5.3 billion in 2024, marking a 3.27% decrease[37] - The European cannabis market is expected to grow from approximately $3.7 billion in 2023 to $6.2 billion in annual sales in 2024[38] - The ongoing trend of states legalizing medicinal and adult-use cannabis is expected to drive increased demand for the company's products[94] Company Operations and Strategy - Greenlane's vaporizer portfolio includes nearly 200 distinct products across 12 brands, with vaporizers being the largest product category by revenue[43][45] - The company has consolidated its warehouse and distribution operations, streamlining processes in 2023 and 2024[23] - Greenlane's proprietary brands include Groove, Higher Standards, and Pollen Gear, aimed at delivering higher margins and long-term value[21] - The company operates its own e-commerce platforms and utilizes third-party logistics to enhance distribution capabilities[22][23] - Greenlane's growth strategy focuses on scaling its higher-margin proprietary brands through direct-to-consumer channels[24] - The company launched a new B2B customer portal at Wholesale.Greenlane.com in 2022, providing business customers with 24/7 access to the product catalog[56] Financial Performance and Capital Management - In 2023 and 2024, the company optimized its working capital requirements and reduced costs due to challenges in accessing capital markets[63] - A private placement in February 2025 raised approximately $25.0 million through the sale of Class A common stock and investor warrants at a price of $1.19 per Common Unit[69] - The company aims to enhance operating margins through additional product purchasing discounts and increased efficiencies from technology platforms[75] - The company achieved approximately $10.1 million in annualized cash compensation cost savings through a series of reductions in force during 2023 and 2024[81] - The company has cash available of $0.9 million as of December 31, 2024, with revenue declining in recent quarters compared to prior years[103] Regulatory and Compliance Challenges - The company faces increased taxation on vaping products, with 30 states and the District of Columbia adopting such laws, which may adversely impact demand[95] - Regulatory developments, including potential reclassification of cannabis, could significantly impact the company's operating results and market confidence[93] - The company is subject to intense price competition, which may negatively impact its gross and operating margins[116] - The company has faced regulatory uncertainties regarding the enforcement of tobacco-related provisions by the FDA, which could impact its product offerings[126] - The FDA has mandated that manufacturers of ENDS products must submit a PMTA by September 9, 2020, or face enforcement actions, impacting the ability to distribute vaporizer hardware and accessories[132] - Non-compliance with the Tobacco Control Act and FDA regulations could lead to litigation, financial penalties, and impaired marketing capabilities for vaporizer products[135] Market Risks and Consumer Behavior - The market for vaporizer products is evolving and characterized by uncertainty, which poses risks to the company's ability to maintain market share[122] - The company faces risks from a shift in consumer purchasing from brick-and-mortar to online retail, potentially harming market share and revenues[157] - There is a significant risk of difficulty in collecting receivables due to customers' financial challenges and regulatory environments[158] - Negative trends in public acceptance of cannabis could materially affect the company's business and financial condition[194] - Federal enforcement against state-legal cannabis activities remains a risk, which could negatively impact revenues and profits[180] Supply Chain and Supplier Relationships - The company has established strong relationships with over 150 suppliers, with a significant percentage of net sales dependent on a small number of key suppliers[57] - The company relies on third-party suppliers for vaporization products, and any supply shortages could adversely affect its business operations and financial condition[123] - The lack of long-term agreements with suppliers may lead to inventory shortages or price increases, adversely affecting product offerings and business operations[150] Legal and Liability Risks - The company is exposed to personal injury, product liability, and environmental claims due to its position in the vaporization products supply chain[219] - Customers use distributed products in potentially hazardous applications, increasing the risk of lawsuits[219] - The company may be named as a defendant in lawsuits asserting large claims, regardless of product manufacturing[219] - The adequacy of the company's insurance coverage for underlying claims is not guaranteed[219] Employment and Workforce Management - As of March 17, 2025, the company had 49 full-time employees, with 47 in the U.S. and 2 in Canada[80] - The company has significantly reduced its headcount to align with revenue projections and optimize costs[67] - The company aims to be the employer of choice by offering competitive compensation and benefits, regularly reviewing these programs against the market to ensure competitiveness[85]