Will Investors See These Marijuana Stocks As A Buy Or Sell?In 2024 there is great anticipation of what will take place in the cannabis sector. This speculation has led to more people looking for the top marijuana stocks to buy. Over half of the USA and other global regions have already legalized cannabis. With legal cannabis becoming more successful and profitable globally what becomes the next step for investors? To begin you should learn about legal cannabis as well as the basics of investing and stock tr ...

Here 3 Marijuana Stocks To Watch In The Stock Market 2024Marijuana stocks have recently seen another increase in trading momentum. Much of which is based on the speculation of what’s to come. The cannabis industry is still young and there is more to be done to create a more productive sector. For one the ongoing fight to establish federal reform and other state-level regulations could help marijuana stocks. Any good news on either topic leads to speculation trading which can create a rise in trading.However ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-38875 (Commission file number) Greenlane Holdings, Inc. (Exact name of registrant as specified in its charter) | Delaware | 83-0806637 | | --- | -- ...

PART I. Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Greenlane Holdings, Inc.'s unaudited condensed consolidated financial statements for the quarter ended June 30, 2023, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining business operations, significant accounting policies, and specific financial instrument details [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2023 (Unaudited) | December 31, 2022 | | :------------------------------------------------------------------------------------------------ | :------------------------ | :------------------ | | **ASSETS** | | | | Cash | $4,651 | $6,458 | | Restricted cash | — | $5,718 | | Accounts receivable, net | $3,089 | $6,468 | | Inventories, net | $29,840 | $40,643 | | Total current assets | $49,486 | $76,703 | | Total assets | $114,483 | $146,053 | | **LIABILITIES** | | | | Accounts payable | $17,166 | $14,953 | | Total current liabilities | $35,289 | $35,659 | | Total liabilities | $39,433 | $50,694 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity attributable to Greenlane Holdings, Inc. | $75,095 | $95,358 | | Total stockholders' equity | $75,050 | $95,359 | - Total assets decreased by **$31.57 million** (**21.6%**) from **$146.05 million** at December 31, 2022, to **$114.48 million** at June 30, 2023, primarily driven by a decrease in current assets, including cash, restricted cash, accounts receivable, and inventories[9](index=9&type=chunk) - Total liabilities decreased by **$11.26 million** (**22.2%**) from **$50.69 million** at December 31, 2022, to **$39.43 million** at June 30, 2023, mainly due to a significant reduction in notes payable[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $19,625 | $39,916 | $43,584 | $86,450 | | Cost of sales | $15,051 | $31,817 | $33,491 | $72,383 | | Gross profit | $4,574 | $8,099 | $10,093 | $14,067 | | Total operating expenses | $14,103 | $21,773 | $29,273 | $45,952 | | Loss from operations | $(9,529) | $(13,674) | $(19,180) | $(31,885) | | Net loss attributable to Greenlane Holdings, Inc. | $(10,533) | $(12,124) | $(20,727) | $(27,456) | | Net loss per share - basic and diluted | $(6.56) | $(22.70) | $(12.96) | $(55.70) | - Net sales decreased by **50.8%** for the three months ended June 30, 2023, and by **49.6%** for the six months ended June 30, 2023, compared to the same periods in 2022[12](index=12&type=chunk) - Gross profit decreased by **43.5%** for the three months and **28.3%** for the six months ended June 30, 2023, year-over-year, despite an increase in gross margin percentage[12](index=12&type=chunk) - Net loss attributable to Greenlane Holdings, Inc. decreased by **13.1%** for the three months and **24.5%** for the six months ended June 30, 2023, compared to the same periods in 2022, indicating a reduction in losses[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Balance December 31, 2022 | Balance June 30, 2023 | | :------------------------------------------------ | :------------------------ | :-------------------- | | Total Stockholders' Equity | $95,359 | $75,050 | | Net loss | $(10,194) (Q1 2023) / $(10,533) (Q2 2023) | $(10,533) | | Equity-based compensation | $110 (Q1 2023) / $(11) (Q2 2023) | $(11) | | Issuance of Class A shares - Amended Eyce APA | $95 (Q1 2023) / $65 (Q2 2023) | $65 | | Other comprehensive income | $178 (Q1 2023) / $27 (Q2 2023) | $27 | - Total stockholders' equity decreased by **$20.31 million** from **$95.36 million** at December 31, 2022, to **$75.05 million** at June 30, 2023, primarily due to net losses[14](index=14&type=chunk) - The company issued Class A shares related to the Amended Eyce APA, contributing to additional paid-in capital[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $4,656 | $(13,730) | | Net cash provided by (used in) investing activities | $(253) | $(1,197) | | Net cash provided by (used in) financing activities | $(12,133) | $11,115 | | Net increase (decrease) in cash | $(7,525) | $(3,727) | | Cash and restricted cash, as of end of the period | $4,651 | $9,130 | - Net cash provided by operating activities significantly improved, moving from a use of **$13.73 million** in H1 2022 to a provision of **$4.66 million** in H1 2023, partly due to the ERC sale[17](index=17&type=chunk)[54](index=54&type=chunk) - Net cash used in financing activities increased substantially to **$12.13 million** in H1 2023, compared to a provision of **$11.12 million** in H1 2022, primarily due to debt repayments[17](index=17&type=chunk)[256](index=256&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1. Business Operations and Organization](index=10&type=section&id=NOTE%201.%20Business%20Operations%20and%20Organization) - Greenlane Holdings, Inc. is a Delaware corporation, a holding company for Greenlane Holdings, LLC, which merchandises cannabis accessories, packaging, vaporization solutions, and lifestyle products globally[22](index=22&type=chunk)[23](index=23&type=chunk) - The company has developed proprietary brands (Greenlane Brands) including Groove, Eyce, DaVinci, and Higher Standards, and holds exclusive licenses for Marley Natural and K.Haring branded products[24](index=24&type=chunk) - As of December 31, 2022, Greenlane owned **100%** of the voting and economic interests in the Operating Company, simplifying its corporate structure[31](index=31&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The company completed a **one-for-20** reverse stock split in August 2022 and a **one-for-10** reverse stock split in June 2023, retroactively adjusting all share and per share amounts[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - Management has identified substantial doubt about the company's ability to continue as a going concern due to net losses and projected cash needs, contingent on successful execution of liquidity and profitability plans[55](index=55&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - The company manages its global business through two reportable segments: Industrial Goods and Consumer Goods, based on how the CODM evaluates performance and allocates resources[57](index=57&type=chunk)[153](index=153&type=chunk) [NOTE 3. Business Acquisitions](index=15&type=section&id=NOTE%203.%20Business%20Acquisitions) - An amendment to the Eyce Asset Purchase Agreement (Amended Eyce APA) in April 2022 accelerated the issuance of **$0.9 million** in Class A common stock and provided for **$0.9 million** in cash payments contingent on deliverables and continued employment[68](index=68&type=chunk)[70](index=70&type=chunk) [NOTE 4. Fair Value of Financial Instruments](index=16&type=section&id=NOTE%204.%20Fair%20Value%20of%20Financial%20Instruments) Contingent Consideration Fair Value (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :------------------------- | :------------ | :---------------- | | Contingent consideration | $2,541 | $2,738 | - The company revalues contingent consideration obligations associated with business acquisitions to fair value each period, using scenario-based methods with unobservable inputs[78](index=78&type=chunk) - The balance of contingent consideration decreased from **$2.74 million** at December 31, 2022, to **$2.54 million** at June 30, 2023, after cash payments and fair value adjustments[79](index=79&type=chunk) [NOTE 5. Leases](index=17&type=section&id=NOTE%205.%20Leases) Future Minimum Lease Payments (in thousands) | Period | Operating Leases | | :------------------------ | :--------------- | | Remainder of 2023 | $637 | | 2024 | $914 | | 2025 | $942 | | 2026 | $81 | | Total minimum lease payments | $2,574 | | Present value of minimum lease payments | $2,478 | | Long-term portion | $1,473 | - Rent expense under operating leases decreased from **$0.7 million** to **$0.6 million** for the three months ended June 30, 2023, and from **$1.4 million** to **$1.2 million** for the six months ended June 30, 2023, compared to the same periods in 2022[85](index=85&type=chunk) [NOTE 6. Debt](index=19&type=section&id=NOTE%206.%20Debt) Debt Balance (in thousands) | Debt Type | June 30, 2023 | December 31, 2022 | | :------------------------ | :------------ | :---------------- | | Line of Credit | $5,548 | $15,000 | | DaVinci Promissory Note | $1,584 | $2,538 | | Eyce Promissory Note | — | $647 | | Total Debt (gross) | $7,132 | $18,185 | | Debt, net, excluding leases | $2,591 | $13,040 | - The company fully repaid the Eyce Promissory Note by June 30, 2023, and the Real Estate Note in September 2022[91](index=91&type=chunk)[92](index=92&type=chunk) - The Asset-Based Loan (Line of Credit) was significantly reduced from **$15.0 million** to **$5.55 million** by June 30, 2023, with the remaining **$4.3 million** repaid in August 2023[88](index=88&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [NOTE 7. Commitments and Contingencies](index=20&type=section&id=NOTE%207.%20Commitments%20and%20Contingencies) - The company is involved in various legal proceedings in the ordinary course of business but does not believe any pending matters will have a material adverse effect[104](index=104&type=chunk) - Potential claims related to non-income taxes (e.g., VAT) from various tax authorities could result in significant additional tax liabilities[105](index=105&type=chunk) [NOTE 8. Supplemental Financial Statement Information](index=20&type=section&id=NOTE%208.%20Supplemental%20Financial%20Statement%20Information) - In February 2023, the company sold its Employee Retention Credit (ERC) receivable for approximately **$4.9 million** in cash[108](index=108&type=chunk) Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :------------------------------------------ | :------------ | :---------------- | | VAT payable | $3,258 | $2,809 | | Contingent consideration | $2,541 | $2,738 | | Accrued employee compensation | $2,665 | $3,812 | | Total Accrued expenses and other current liabilities | $11,718 | $11,882 | - The four largest vendors accounted for approximately **89.9%** and **82.2%** of total purchases for the three and six months ended June 30, 2023, respectively, indicating high supplier concentration[113](index=113&type=chunk) [NOTE 9. Stockholders' Equity](index=22&type=section&id=NOTE%209.%20Stockholders'%20Equity) - The company completed a **one-for-20** reverse stock split in August 2022 and a **one-for-10** reverse stock split in June 2023, retroactively adjusting all share and per share amounts[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - As of December 31, 2022, Greenlane owned **100%** of the economic interests in the Operating Company, as all Common Units and Class B common stock were exchanged for Class A common stock[119](index=119&type=chunk) Class A Common Stock Sales under ATM Program (in thousands) | Metric | August 2021 (Inception) through June 30, 2023 | | :-------------------- | :-------------------------------------------- | | Class A shares sold | 97,262 | | Gross proceeds | $12,684 | | Net proceeds | $12,303 | - Due to untimely filing of its Q1 2023 10-Q, the company is unable to issue additional Class A common stock via its ATM Program or Shelf Registration Statement for **12 months**, limiting capital market liquidity[124](index=124&type=chunk) [NOTE 10. Compensation Plans](index=25&type=section&id=NOTE%2010.%20Compensation%20Plans) - The Third Amended Plan, approved in June 2023, increased the authorized Class A common stock for issuance under the equity incentive plan by **209,862 shares** to an aggregate of **319,862 shares**[141](index=141&type=chunk) Equity-Based Compensation Expense (in thousands) | Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | $28 | $261 | $79 | $935 | | Restricted shares | $(39) | $170 | $21 | $358 | | Total equity-based compensation expense | $(11) | $431 | $100 | $1,304 | [NOTE 11. Income Taxes](index=25&type=section&id=NOTE%2011.%20Income%20Taxes) - Effective December 31, 2022, the Operating Company converted from a partnership to a disregarded entity, meaning **100%** of its US income and expenses are now included in Greenlane's US and state tax returns[145](index=145&type=chunk) - A full valuation allowance was established against deferred tax assets as of June 30, 2023, and December 31, 2022, as management determined it was not more likely than not that sufficient taxable income would be generated to realize these benefits[146](index=146&type=chunk) - The Tax Receivable Agreement (TRA) liability was **$0** as of June 30, 2023, and December 31, 2022, because the amount or timing of payments to noncontrolling interest holders was no longer probable or reasonably estimable[150](index=150&type=chunk) [NOTE 12. Segment Reporting](index=26&type=section&id=NOTE%2012.%20Segment%20Reporting) - Greenlane operates two reportable segments: Consumer Goods (proprietary brands, lifestyle products) and Industrial Goods (packaging, vaporization solutions for cannabis operators)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) Segment Net Sales and Gross Profit (in thousands) | Segment | Net Sales (Q2 2023) | Net Sales (Q2 2022) | Gross Profit (Q2 2023) | Gross Profit (Q2 2022) | | :---------------- | :------------------ | :------------------ | :--------------------- | :--------------------- | | Consumer Goods | $6,025 | $15,912 | $1,803 | $3,064 | | Industrial Goods | $13,600 | $24,004 | $2,771 | $5,035 | | **Total** | **$19,625** | **$39,916** | **$4,574** | **$8,099** | - Both segments experienced significant declines in net sales year-over-year, with Consumer Goods decreasing by **62.1%** and Industrial Goods by **43.3%** for the three months ended June 30, 2023[157](index=157&type=chunk) [NOTE 13. Subsequent Events](index=27&type=section&id=NOTE%2013.%20Subsequent%20Events) - On August 7, 2023, the company repaid the remaining **$4.3 million** outstanding under the Asset-Based Loan, releasing it from its obligations[158](index=158&type=chunk) - In July and August 2023, Greenlane received approximately **$3.0 million** in cash from future receivables financings, with weekly payments scheduled for six to eight months[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Greenlane's financial performance and condition for the quarter ended June 30, 2023, highlighting significant revenue declines, cost reduction efforts, strategic partnerships, and ongoing liquidity challenges, including a going concern warning and Nasdaq listing deficiency [Overview](index=29&type=section&id=Overview) - Greenlane is a global platform for cannabis accessories, vape devices, and lifestyle products, strengthened by acquisitions of Eyce, DaVinci, and KushCo Holdings in 2021[167](index=167&type=chunk) - The company offers proprietary Greenlane Brands (Groove, Eyce, DaVinci, Higher Standards, Pollen Gear) and licensed products (Marley Natural, K.Haring) through wholesale, retail, and e-commerce channels[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - Business is managed through two segments: Consumer Goods (direct-to-consumer, retail, e-commerce) and Industrial Goods (packaging, vaporization solutions for cannabis operators)[172](index=172&type=chunk) [Plan to Accelerate Path to Profitability and Capitalize the Business](index=30&type=section&id=Plan%20to%20Accelerate%20Path%20to%20Profitability%20and%20Capitalize%20the%20Business) - Greenlane is focused on achieving profitability and improving capitalization through cost reduction, margin enhancement, and strategic partnerships[173](index=173&type=chunk) - Strategic partnerships with MJ Pack (packaging) and a Vape Partner aim to reduce cost structure, enhance margins, and convert inventory to cash by shifting direct purchasing to commission-based models[174](index=174&type=chunk) - Other initiatives include renegotiating supplier terms, consolidating operations, reducing workforce (**44.3%** decrease in salaries/benefits for H1 2023), and liquidating excess/obsolete inventory[175](index=175&type=chunk)[176](index=176&type=chunk) [USPS PACT Act Exemption](index=31&type=section&id=USPS%20PACT%20Act%20Exemption) - In January 2022, Greenlane received a USPS PACT Act Exemption, allowing it to ship vaporizers and accessories (ENDS products) to compliant businesses, making over **97%** of annual sales eligible for USPS and other major parcel carriers[180](index=180&type=chunk) - This exemption is expected to reduce shipping costs, decrease fulfillment times, and enhance customer experience for approved wholesale customers[181](index=181&type=chunk) [Reverse Stock Splits](index=31&type=section&id=Reverse%20Stock%20Splits) - The company executed a **one-for-20** reverse stock split in August 2022 and a **one-for-10** reverse stock split in June 2023, retroactively adjusting all share and per share amounts[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - These splits did not change the par value or authorized number of common stock shares, but adjusted outstanding options, restricted stock awards, and warrants[184](index=184&type=chunk) [Nasdaq Deficiency Letter](index=31&type=section&id=Nasdaq%20Deficiency%20Letter) - On August 3, 2023, Greenlane received a Nasdaq deficiency letter for failing to maintain a minimum market value of **$5.0 million** for publicly held Class A common stock for **30 consecutive business days**[185](index=185&type=chunk) - The company has a **180-calendar-day** grace period until January 30, 2024, to regain compliance, which requires meeting the **$5.0 million** minimum for at least **10 consecutive business days**[186](index=186&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Consolidated Operating Results (in thousands) | Metric | Q2 2023 | Q2 2022 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Net sales | $19,625 | $39,916 | $(20,291) | (50.8)% | | Gross profit | $4,574 | $8,099 | $(3,525) | (43.5)% | | Gross margin | 23.3% | 20.3% | +3.0% | | | Salaries, benefits and payroll taxes | $5,157 | $8,836 | $(3,679) | (41.6)% | | General and administrative | $6,968 | $10,588 | $(3,620) | (34.2)% | | Loss from operations | $(9,529) | $(13,674) | $4,145 | (30.3)% | | Net loss attributable to Greenlane | $(10,533) | $(12,124) | $1,591 | (13.1)% | - Net sales decreased by **50.8%** for Q2 2023 and **49.6%** for H1 2023, driven by a strategic shift to higher-margin in-house brands and rationalization of third-party offerings, as well as strategic partnerships in packaging and vape products[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Gross margin improved to **23.3%** in Q2 2023 (from **20.3%** in Q2 2022) and **23.2%** in H1 2023 (from **16.3%** in H1 2022), primarily due to reduced inventory write-offs[194](index=194&type=chunk)[196](index=196&type=chunk) - Operating expenses significantly decreased, with salaries, benefits, and payroll taxes down **41.6%** in Q2 2023 and **44.3%** in H1 2023, and general and administrative expenses down **34.2%** in Q2 2023 and **33.7%** in H1 2023, reflecting major restructuring and cost reduction efforts[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - Interest expense increased significantly by **245.1%** in Q2 2023 and **157.9%** in H1 2023, primarily due to the new Asset-Based Loan closed in Q3 2022[204](index=204&type=chunk)[205](index=205&type=chunk) [Segment Operating Performance](index=34&type=section&id=Segment%20Operating%20Performance) Segment Net Sales and Gross Profit (in thousands) | Segment | Net Sales (Q2 2023) | Net Sales (Q2 2022) | Gross Profit (Q2 2023) | Gross Profit (Q2 2022) | | :---------------- | :------------------ | :------------------ | :--------------------- | :--------------------- | | Consumer Goods | $6,025 | $15,912 | $1,803 | $3,064 | | Industrial Goods | $13,600 | $24,004 | $2,771 | $5,035 | | **Total** | **$19,625** | **$39,916** | **$4,574** | **$8,099** | - Consumer Goods net sales decreased by **62.1%** in Q2 2023 and **58.1%** in H1 2023, due to a strategic shift towards higher-margin in-house brands and rationalizing third-party offerings, and the sale of the Vibes brand minority interest[215](index=215&type=chunk)[216](index=216&type=chunk) - Industrial Goods net sales decreased by **43.3%** in Q2 2023 and **44.3%** in H1 2023, primarily due to transitioning out of the industry packaging business and entering strategic partnerships for vape products to reduce working capital and enhance margins[220](index=220&type=chunk)[221](index=221&type=chunk) - Consumer Goods gross margin increased to **29.9%** in Q2 2023 (from **19.3%** in Q2 2022) and **29.6%** in H1 2023 (from **17.8%** in H1 2022), largely due to reduced inventory write-offs[218](index=218&type=chunk)[219](index=219&type=chunk) - Industrial Goods gross margin increased to **20.2%** in H1 2023 (from **15.3%** in H1 2022), also attributed to lower inventory write-offs[223](index=223&type=chunk) [Net Sales by Geographic Regions](index=36&type=section&id=Net%20Sales%20by%20Geographic%20Regions) Net Sales by Geographic Region (in thousands) | Region | Q2 2023 Net Sales | Q2 2022 Net Sales | H1 2023 Net Sales | H1 2022 Net Sales | | :------------- | :---------------- | :---------------- | :---------------- | :---------------- | | United States | $18,560 | $37,601 | $40,952 | $80,592 | | Canada | $119 | $874 | $425 | $2,729 | | Europe | $946 | $1,441 | $2,207 | $3,129 | | **Total** | **$19,625** | **$39,916** | **$43,584** | **$86,450** | - United States net sales decreased by **50.6%** in Q2 2023 and **49.2%** in H1 2023, reflecting the company's strategic shift and restructuring efforts[226](index=226&type=chunk)[227](index=227&type=chunk) - Canadian net sales saw a significant decline of **86.4%** in Q2 2023 and **84.4%** in H1 2023, attributed to reduced sales and marketing spend, with the company evaluating distribution channels[228](index=228&type=chunk)[229](index=229&type=chunk) - European net sales decreased by **34.4%** in Q2 2023 and **29.5%** in H1 2023, primarily due to restructuring efforts aimed at improving profitability[230](index=230&type=chunk)[231](index=231&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Metrics (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :---------------- | :------------ | :---------------- | | Cash | $4,651 | $6,458 | | Working capital | $20,600 | $41,000 | - The company's cash position decreased from **$6.46 million** to **$4.65 million**, and working capital decreased from **$41.0 million** to **$20.6 million** between December 31, 2022, and June 30, 2023[232](index=232&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern due to net losses, projected cash needs, and current liquidity levels, contingent on successful execution of management's plans[247](index=247&type=chunk)[248](index=248&type=chunk) - Management's plan to improve liquidity and profitability includes further reducing operating costs, increasing revenue through new products and customers, executing strategic partnerships, and seeking additional capital[247](index=247&type=chunk)[248](index=248&type=chunk) - Recent capital raises include **$3.8 million** from the July 2023 Offering and **$3.0 million** from Future Receivables Financings in July/August 2023[237](index=237&type=chunk)[241](index=241&type=chunk) [Cash Flows](index=40&type=section&id=Cash%20Flows) Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $4,656 | $(13,730) | | Net cash provided by (used in) investing activities | $(253) | $(1,197) | | Net cash provided (used in) by financing activities | $(12,133) | $11,115 | - Operating activities generated **$4.7 million** in cash in H1 2023, a significant improvement from **$13.7 million** cash used in H1 2022, primarily due to a **$20.6 million** decrease in working capital and the ERC sale[251](index=251&type=chunk) - Financing activities used **$12.1 million** in cash in H1 2023, compared to **$11.1 million** provided in H1 2022, mainly due to **$11.8 million** in debt service payments, including **$10.2 million** for the Asset-Based Loan[256](index=256&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The company refers to its Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of critical accounting policies and estimates[258](index=258&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for the company - The company is not required to provide quantitative and qualitative disclosures about market risk[259](index=259&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Greenlane's disclosure controls and procedures were not effective as of June 30, 2023, due to un-remediated material weaknesses in internal control over financial reporting. The company is actively implementing a remediation plan, including a new ERP system, but expects limited efforts on legacy system controls - As of June 30, 2023, the CEO and CFO concluded that disclosure controls and procedures were not effective due to un-remediated material weaknesses in internal control over financial reporting[261](index=261&type=chunk) - The company is implementing a multi-year ERP system to replace existing core financial systems, expected to be completed in 2023, which will result in changes to internal control over financial reporting[263](index=263&type=chunk)[265](index=265&type=chunk) - Remediation efforts include enhancing risk assessment, improving documentation, strengthening review procedures, and educating control owners, but material weaknesses related to user access controls are not expected to be remediated until the new ERP system is fully implemented[263](index=263&type=chunk)[264](index=264&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for a description of the company's material pending legal proceedings - Information on material pending legal proceedings is detailed in Note 7 of the Condensed Consolidated Financial Statements[268](index=268&type=chunk) [Item 1A. Risk Factors](index=43&type=page&id=Item%201A.%20Risk%20Factors) This section highlights that there have been no material changes to the risk factors previously disclosed, except for the substantial doubt about the company's ability to continue as a going concern, driven by ongoing net losses, cash needs, and a challenging macroeconomic environment - No material changes to risk factors from the 2022 Annual Report on Form 10-K, except for the substantial doubt about the company's ability to continue as a going concern[269](index=269&type=chunk)[270](index=270&type=chunk) - The going concern risk is due to net losses (**$20.8 million** in H1 2023, **$125.9 million** in FY 2022), cash needs, current liquidity levels, and weaker demand in the macroeconomic environment[270](index=270&type=chunk) - The company's ability to continue as a going concern is contingent on successfully executing management's plan to improve liquidity and profitability, including cost reductions, revenue growth, strategic partnerships, and seeking additional capital[272](index=272&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report - There were no unregistered sales of equity securities or use of proceeds to report[273](index=273&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information is reported in this section[274](index=274&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to the certificate of incorporation, forms of warrants and purchase agreements related to the July 2023 Offering, and certifications required by the Sarbanes-Oxley Act - Exhibits include amendments to the Certificate of Incorporation, forms of July 2023 Standard and Pre-Funded Warrants, July 2023 Warrant Amendment, July 2023 Securities Purchase Agreement, and Placement Agency Agreement[276](index=276&type=chunk) - Certifications from the Chief Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[276](index=276&type=chunk)

Financial Data and Key Metrics Changes - Total net sales for Q1 2023 were approximately $24 million, an increase of $2 million or 9% compared to approximately $22 million for Q4 2022 [25] - Gross profit for Q1 2023 was $5.5 million, with a gross margin of 23%, compared to $5.9 million and a gross margin of 26.7% for Q4 2022 [27] - Net loss for Q1 2023 was $10.2 million, a reduction from a loss of $13.5 million in the prior quarter, indicating a significant improvement in financial performance [12] Business Line Data and Key Metrics Changes - The consumer goods segment revenue increased by $1.3 million or 19.3%, while the industrial segment saw an increase of $0.7 million or 4.6% compared to Q4 2022 [25] - The company launched 16 new products in Q1 2023, contributing positively to revenue growth [6][23] Market Data and Key Metrics Changes - The company reported a 33% expansion in market penetration due to an enhanced performance marketing platform [7] - Strategic partnerships across South America, Canada, Mexico, and Puerto Rico have enabled the company to scale its brands globally [7] Company Strategy and Development Direction - The company is focused on three key areas: profitability, product innovation, and advancing its global omnichannel strategy [4] - A strategic partnership with A&A Global Imports aims to enhance packaging solutions while allowing the company to invest in higher-margin consumer products [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the remainder of 2023, highlighting a path to profitability with reduced operating expenses and improved gross margins [21][14] - The company anticipates that the transition to an asset-light model will yield margin benefits in the latter half of 2023 [15][34] Other Important Information - Total operating expenses decreased by 32% to $15 million in Q1 2023 compared to $22 million in Q4 2022, driven by cost reduction initiatives [28] - The company ended Q1 2023 with $5.9 million in cash and a working capital of $25.7 million, down from $41 million as of December 31, 2022 [29] Q&A Session Summary Question: Progress on asset-light models for CCELL and packaging business - Management indicated that the timing for realizing margin benefits will largely affect Q3 and Q4, with strong performance expected in Q2 [15][34] Question: Expectations for the CPG business and consumer wallet impact - Management noted a shift towards more affordable products, with growth seen in the lower price segment, particularly with the new Groove brand [36][43]

● Founded in 2013 ● In 2015, launched our first silicone product, the revolutionary Eyce Rig ● In 2018, developed industry leading Lifetime Warranty ● In 2020, Eyce takes its first step into glass with the ProTeck Line ● Acquired by Greenlane in 2021 ● In 2021, launched ORAFLEX patented technology - double layer silicone with hand painted detailing that embodies the craft of artisanal glass GREENLANE NASDAQ: GNLN CONSUMERS RETAILERS SPECIALITY DISTRIBUTORS 15 $3.2M GNLN BRAND SALES Bringing over 25 years of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-38875 (Commission file number) Greenlane Holdings, Inc. (Exact name of registrant as specified in its charter) | Delaware | | 83-0806637 | | --- | --- ...

Financial Data and Key Metrics Changes - For the year ending December 31, 2022, total net sales were approximately $137.1 million, a decrease of $29 million or 17.4% compared to approximately $166.1 million for the previous year [35] - Gross profit was $24.9 million, down from $33.8 million, representing a decrease of $8.8 million or 26.1% due to declining revenue [16] - Net loss for fiscal year 2022 was $125.9 million, including a $71.4 million intangible asset impairment charge, compared to a loss of $53.4 million for the prior year [17] - Adjusted EBITDA for fiscal year 2022 was a loss of $31.8 million, compared to a loss of $22.3 million for the prior fiscal year [65] Business Line Data and Key Metrics Changes - The Consumer Goods segment saw a revenue decrease of $62 million or 56.3%, while the Industrial segment increased by $33 million or 59% due to contributions from the merger with KushCo [35] - SG&A expenses increased by $66.2 million or 76.5% for fiscal year 2022, totaling $152.7 million compared to $86.5 million for the prior fiscal year [36] - The company reported a gross margin of 26.7% for the three months ending December 31, 2022 [36] Market Data and Key Metrics Changes - The company ended the year with $40.6 million in net inventories, down from $67 million as of December 31, 2021 [37] - The gross margin decreased by 2.1% to 18.2% for the year ended December 31, 2022, compared to 20.4% for the same period in 2021 [64] Company Strategy and Development Direction - The company is engaged in a strategic shift to a higher margin, less capital-intensive business model aimed at profitability and sustainability [24] - A focus on enhancing and growing its position as a product innovator and disruptor in the segment is emphasized [53] - The company plans to reduce SG&A by another 40% from Q4 2022 to Q4 2023 through continued cost-cutting measures [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transformative efforts in 2022 beginning to positively impact 2023 financial results, with expectations of 5% to 10% revenue growth in Q1 [18][45] - The company anticipates gross margins to grow throughout the year, with Q1 expected at 24.5% and Q4 at 34.3%, leading to an aggregate of about 30.1% for the year [20] - Management acknowledged operational issues impacting revenue during the first half of the year related to new ERP and B2B systems [49] Other Important Information - The company reduced headcount by 49% throughout 2022, from 308 employees to 157 [12] - A non-dilutive capital of $4.8 million was received in Q1 from the sale of ERC Credits, which helped reduce total debt by 40% [11] - The company launched 13 products under the Groove brand, with plans for an additional 20 products in 2023 [38] Q&A Session Summary Question: Can you discuss the gross margin expectations related to the EBITDA target for Q4 2023? - Management indicated that gross margins are expected to improve as higher margin CPG products are shifted into focus [67] Question: What initiatives are in place for expanded channel distribution? - The company is focusing on mid-tier operators and small dispensary groups, aligning resources to meet their needs, and is seeing positive results early in 2023 [69]

[Note About Forward-Looking Statements](index=5&type=section&id=Note%20About%20Forward-Looking%20Statements) [Forward-Looking Statements Disclosure](index=5&type=section&id=Forward-Looking%20Statements%20Disclosure) Forward-looking statements in this report are subject to risks and uncertainties that may cause actual results to differ materially from expectations - The report contains forward-looking statements, identifiable by terms like 'anticipate,' 'estimate,' 'plan,' 'expect,' 'believe,' 'intend,' 'may,' 'will,' 'should,' and 'could'[12](index=12&type=chunk) - Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially[13](index=13&type=chunk) - Key areas covered by forward-looking statements include growth strategies, financial and operational results, industry trends, management's objectives, regulatory impacts, and projections of revenue and earnings[14](index=14&type=chunk) [Summary Risk Factors](index=6&type=section&id=Summary%20Risk%20Factors) Key risks include global economic conditions, supply chain, liquidity, regulatory uncertainties, and potential Nasdaq delisting - Global economic conditions, including inflation and supply chain disruptions, could materially and adversely affect the business[19](index=19&type=chunk) - The company is vulnerable to third-party transportation risks, including governmental laws and common carriers' policies restricting product shipments[19](index=19&type=chunk) - The business depends partly on continued market acceptance and legalization of cannabis, with legislative uncertainty posing a risk[19](index=19&type=chunk) - Increased regulatory compliance burdens, particularly concerning vaporizer products and ENDS, could significantly impact business development and operations[19](index=19&type=chunk) - Failure to meet Nasdaq listing standards could lead to delisting, adversely affecting stock liquidity and the ability to raise capital[18](index=18&type=chunk) [PART I](index=7&type=section&id=PART%20I) [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Greenlane Holdings, Inc. is a global platform for cannabis accessories and vape products, focused on profitability through cost reduction and divestitures [General](index=7&type=section&id=General) [Organization](index=8&type=section&id=Organization) [Our Business Relating to the Cannabis Industry](index=8&type=section&id=Our%20Business%20Relating%20to%20the%20Cannabis%20Industry) [Product Information](index=9&type=section&id=Product%20Information) [Our Competitive Strengths](index=10&type=section&id=Our%20Competitive%20Strengths) [Our Operating Strategies](index=11&type=section&id=Our%20Operating%20Strategies) [Business Seasonality](index=13&type=section&id=Business%20Seasonality) [Human Capital Resources](index=13&type=section&id=Human%20Capital%20Resources) [Competition](index=14&type=section&id=Competition) [Trademarks](index=14&type=section&id=Trademarks) [Regulatory Developments](index=14&type=section&id=Regulatory%20Developments) [Corporate Information](index=15&type=section&id=Corporate%20Information) [Available Information](index=15&type=section&id=Available%20Information) - Greenlane is a global platform for cannabis accessories, vape devices, and lifestyle products, founded in 2005[21](index=21&type=chunk) - Key acquisitions in 2021 included Eyce, DaVinci, and a merger with KushCo Holdings, significantly expanding proprietary brands and customer reach[21](index=21&type=chunk) - The business operates in two segments: Consumer Goods (serving consumers via wholesale, retail, e-commerce with Greenlane and third-party brands) and Industrial Goods (serving Cannabis Operators with ancillary products like packaging and vaporization solutions)[25](index=25&type=chunk) - Strategic initiatives for 2022 focused on accelerating profitability, including cost structure reduction, facility footprint optimization, non-core asset dispositions, and focusing on higher-margin Greenlane Brands[57](index=57&type=chunk)[61](index=61&type=chunk) - The company received a USPS PACT Act Exemption in January 2022, allowing shipment of vaporizers and ENDS products to compliant businesses, improving shipping costs and fulfillment times[64](index=64&type=chunk)[65](index=65&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) This section details risks impacting Greenlane, including macroeconomic conditions, liquidity, Nasdaq delisting, narrow margins, and evolving cannabis/vaping regulations [Risks Related to Our Business and Industry](index=16&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) [Risks Related to Our Organizational Structure](index=41&type=section&id=Risks%20Related%20to%20Our%20Organizational%20Structure) [Risks Related to Ownership of Our Class A Common Stock](index=43&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) - Global economic conditions, including inflation and rising interest rates, could negatively affect demand for Greenlane's products and exacerbate business risks[90](index=90&type=chunk)[91](index=91&type=chunk) - The company faces significant liquidity challenges, with a low cash balance and negative cash flow, potentially requiring additional dilutive equity financing if strategic initiatives are unsuccessful[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Greenlane has failed to meet Nasdaq listing standards multiple times and faces a risk of delisting, which would negatively impact stock price, liquidity, and future financing capabilities[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Narrow operating margins magnify the impact of cost variations and unforeseen events, making the company vulnerable to increased costs and price competition[106](index=106&type=chunk) - The evolving and uncertain regulatory landscape for vaporization products and cannabis in the U.S., Canada, and Europe poses significant compliance burdens and risks to sales and operations[118](index=118&type=chunk)[130](index=130&type=chunk)[138](index=138&type=chunk) [Item 1B. Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC regarding the company's previous filings [Item 2. Properties](index=47&type=section&id=Item%202.%20Properties) Greenlane leases its headquarters, distribution centers, administrative offices, and a retail store across North America and Europe - Greenlane leases its headquarters (4,000 sq ft office) in Boca Raton, Florida[301](index=301&type=chunk) - The company also leases distribution centers in the U.S., Canada, and Europe, administrative offices in the U.S. and Europe, and a retail store in New York City[301](index=301&type=chunk) - Current facilities are deemed adequate for global operational needs, with flexibility for additional space[301](index=301&type=chunk) [Item 3. Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) Information on legal proceedings as of December 31, 2022, is detailed in Note 7 of the Consolidated Financial Statements - Information on legal proceedings as of December 31, 2022, is detailed in Note 7—Commitments and Contingencies of the Consolidated Financial Statements[302](index=302&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Greenlane Holdings, Inc., as the company is not involved in mining operations [PART II](index=48&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Greenlane's Class A common stock (GNLN) is listed on Nasdaq; no cash dividends are expected, and unregistered sales occurred in Q4 2022 [Market Information](index=48&type=section&id=Market%20Information) [Holders](index=48&type=section&id=Holders) [Dividends](index=48&type=section&id=Dividends) [Unregistered Sales of Equity Securities](index=48&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) - Class A common stock (GNLN) has been listed on the Nasdaq Global Select Market since April 18, 2019[305](index=305&type=chunk) - As of December 31, 2022, there were approximately **93 stockholders of record** for Class A common stock[307](index=307&type=chunk) - The company has never declared or paid cash dividends and does not expect to in the foreseeable future, planning to retain future earnings[291](index=291&type=chunk)[308](index=308&type=chunk) Unregistered Sales of Equity Securities (Q4 2022) | Date | Class A shares issued | | :--------- | :-------------------- | | 10/11/2022 | 172 | | 10/31/2022 | 1,588 | | 10/31/2022 | 428 | | 12/1/2022 | 172 | | 12/8/2022 | 172 | | 12/15/2022 | 71,250 | | 12/15/2022 | 76,137 | | 12/30/2022 | 172 | | 12/30/2022 | 86 | [Item 6. [Reserved]](index=48&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Greenlane's business, strategic plan for profitability, and financial performance for 2022 and 2021, noting decreased sales and gross profit [Overview](index=49&type=section&id=Overview) [Plan to Accelerate Path to Profitability and Capitalize the Business](index=49&type=section&id=Plan%20to%20Accelerate%20Path%20to%20Profitability%20and%20Capitalize%20the%20Business) [USPS PACT Act Exemption](index=50&type=section&id=USPS%20PACT%20Act%20Exemption) [Reverse Stock Split](index=50&type=section&id=Reverse%20Stock%20Split) [Critical Accounting Policies and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash Flows](index=58&type=section&id=Cash%20Flows) - Greenlane is focused on achieving profitability and long-term sustainability through cost reduction, facility closures, headcount reduction (**49% in FY2022**), and divestiture of non-core assets[316](index=316&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[321](index=321&type=chunk) - The company generated over **$30.0 million** in non-dilutive liquidity by the end of 2022 through initiatives like selling its 50% stake in VIBES Holdings LLC for **$4.6 million** and its headquarters building for **$9.95 million**, and securing a **$15.0 million** asset-based loan[317](index=317&type=chunk)[318](index=318&type=chunk) - A one-for-20 reverse stock split was effected on August 9, 2022, to regain Nasdaq compliance, adjusting all share and per share amounts retroactively[325](index=325&type=chunk)[327](index=327&type=chunk) Consolidated Operating Results | Metric | 2022 ($ thousands) | 2021 ($ thousands) | Change ($ thousands) | Change (%) | | :---------------------------------------------- | :---------- | :---------- | :---------- | :--------- | | Net sales | $137,085 | $166,060 | $(28,975) | (17.4)% | | Cost of sales | $112,102 | $132,207 | $(20,105) | (15.2)% | | Gross profit | $24,983 | $33,853 | $(8,870) | (26.2)% | | Gross margin | 18.2% | 20.4% | (2.2)% | | | Salaries, benefits and payroll taxes | $31,290 | $34,012 | $(2,722) | (8.0)% | | General and administrative | $41,000 | $47,874 | $(6,874) | (14.4)% | | Goodwill and indefinite-lived intangibles impairment charge | $71,360 | $0 | $71,360 | * | | Depreciation and amortization | $9,067 | $4,689 | $4,378 | 93.4% | | Total operating expenses | $152,717 | $86,575 | $66,142 | 76.4% | | Loss from operations | $(127,734) | $(52,722) | $(75,012) | 142.3% | | Net loss attributable to Greenlane Holdings, Inc. | $(115,760) | $(30,583) | $(85,177) | 278.5% | Segment Net Sales and Gross Profit | Segment | 2022 Net Sales ($ thousands) | 2021 Net Sales ($ thousands) | Change ($ thousands) | Change (%) | 2022 Gross Profit ($ thousands) | 2021 Gross Profit ($ thousands) | Change ($ thousands) | Change (%) | | :--------------- | :------------- | :------------- | :--------- | :--------- | :---------------- | :---------------- | :--------- | :--------- | | Consumer Goods | $48,134 | $110,105 | $(61,971) | (56.3)% | $9,603 | $22,544 | $(12,941) | (57.4)% | | Industrial Goods | $88,951 | $55,955 | $32,996 | 59.0% | $15,380 | $11,309 | $4,071 | 36.0% | | Total | $137,085 | $166,060 | | | $24,983 | $33,853 | | | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Quantitative and qualitative disclosures about market risk are not required for the company - Quantitative and qualitative disclosures about market risk are not required for the company[398](index=398&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Greenlane's audited consolidated financial statements for 2022 and 2021, including balance sheets, operations, equity, cash flows, and detailed notes [Report of Independent Registered Public Accounting Firm](index=60&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Note 1. Business Operations and Organization](index=66&type=section&id=Note%201.%20Business%20Operations%20and%20Organization) [Note 2. Summary of Significant Accounting Policies](index=67&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) [Note 3. Business Acquisitions](index=76&type=section&id=Note%203.%20Business%20Acquisitions) [Note 4. Fair Value of Financial Instruments](index=81&type=section&id=Note%204.%20Fair%20Value%20of%20Financial%20Instruments) [Note 5. Leases](index=83&type=section&id=Note%205.%20Leases) [Note 6. Debt](index=85&type=section&id=Note%206.%20Debt) [Note 7. Commitments and Contingencies](index=86&type=section&id=Note%207.%20Commitments%20and%20Contingencies) [Note 8. Supplemental Financial Statement Information](index=87&type=section&id=Note%208.%20Supplemental%20Financial%20Statement%20Information) [Note 9. Stockholders' Equity](index=91&type=section&id=Note%209.%20Stockholders'%20Equity) [Note 10. Compensation Plans](index=93&type=section&id=Note%2010.%20Compensation%20Plans) [Note 11. Income Taxes](index=96&type=section&id=Note%2011.%20Income%20Taxes) [Note 12. Segment Reporting](index=99&type=section&id=Note%2012.%20Segment%20Reporting) [Note 13. Subsequent Events](index=100&type=section&id=Note%2013.%20Subsequent%20Events) - The section includes the Report of Independent Registered Public Accounting Firm, confirming the fair presentation of financial statements[400](index=400&type=chunk)[401](index=401&type=chunk) - The company retrospectively changed its accounting method for outbound shipping and handling costs to classify them as 'general and administrative' expenses, effective January 1, 2021, to enhance comparability[402](index=402&type=chunk)[449](index=449&type=chunk) Consolidated Balance Sheet Highlights | Metric | December 31, 2022 ($ thousands) | December 31, 2021 ($ thousands) | | :---------------------- | :---------------- | :---------------- | | Total assets | $146,053 | $285,827 | | Total liabilities | $50,694 | $89,463 | | Total stockholders' equity | $95,359 | $196,364 | | Cash | $6,458 | $12,857 | | Restricted cash | $5,718 | $0 | | Inventories, net | $40,643 | $66,982 | | Goodwill | $0 | $41,860 | Consolidated Statements of Operations Highlights | Metric | 2022 ($ thousands) | 2021 ($ thousands) | | :---------------------------------------------- | :---------- | :---------- | | Net sales | $137,085 | $166,060 | | Gross profit | $24,983 | $33,853 | | Goodwill and indefinite-lived intangibles impairment charge | $71,360 | $0 | | Net loss attributable to Greenlane Holdings, Inc. | $(115,760) | $(30,583) | | Net loss per share - basic and diluted | $(15.37) | $(15.85) | Consolidated Statements of Cash Flows Highlights | Metric | 2022 ($ thousands) | 2021 ($ thousands) | | :-------------------------------------- | :---------- | :---------- | | Net cash used in operating activities | $(26,426) | $(37,330) | | Net cash provided by (used in) investing activities | $12,025 | $(19,691) | | Net cash provided by financing activities | $13,930 | $38,963 | [Item 9. Changes in Disagreements with Accountants on Accounting and Financial Disclosure](index=101&type=section&id=Item%209.%20Changes%20in%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure matters - There are no changes in or disagreements with accountants on accounting and financial disclosure[643](index=643&type=chunk) [Item 9A. Controls and Procedures](index=101&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective as of December 2022 due to material weaknesses; remediation is ongoing [Evaluation of Disclosure Controls and Procedures](index=101&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) [Management's Report on Internal Control Over Financial Reporting](index=101&type=section&id=Management's%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) [Material Weaknesses](index=101&type=section&id=Material%20Weaknesses) [Remediation Plan and Status](index=102&type=section&id=Remediation%20Plan%20and%20Status) [Changes in Internal Control Over Financial Reporting](index=103&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) [Inherent Limitations on Effectiveness of Controls](index=103&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) - Management concluded that disclosure controls and procedures were ineffective as of December 31, 2022, due to material weaknesses[646](index=646&type=chunk) - Internal control over financial reporting was also deemed ineffective as of December 31, 2022, due to material weaknesses[648](index=648&type=chunk) - Identified material weaknesses include ineffective user access controls over IT systems, lack of an effective control environment, and deficiencies in risk assessment and control activities[651](index=651&type=chunk)[653](index=653&type=chunk)[654](index=654&type=chunk)[655](index=655&type=chunk) - The company is implementing a multi-year ERP system, expected to be completed in 2023, as part of its remediation plan, but full remediation of identified material weaknesses is ongoing[658](index=658&type=chunk)[659](index=659&type=chunk) [Item 9B. Other Information](index=103&type=section&id=Item%209B.%20Other%20Information) This item states that there is no other information required to be disclosed [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=103&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) Disclosure regarding foreign jurisdictions that prevent inspections is not applicable to the company [PART III](index=103&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=103&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[666](index=666&type=chunk) [Item 11. Executive Compensation](index=104&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[667](index=667&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=104&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[668](index=668&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=104&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[669](index=669&type=chunk) [Item 14. Principal Accounting Fees and Services](index=104&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2023 Annual Meeting of Stockholders[670](index=670&type=chunk) [PART IV](index=105&type=section&id=PART%20IV) [Item 15. Exhibits, Financial Statement Schedules](index=105&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists consolidated financial statements, schedules, and exhibits filed as part of the Form 10-K, including an index and required exhibits [(1) Consolidated Financial Statements](index=105&type=section&id=(1)%20Consolidated%20Financial%20Statements) [(2) Financial Statement Schedules](index=105&type=section&id=(2)%20Financial%20Statement%20Schedules) [(3) Exhibits Required by Item 601 of Regulation S-K](index=105&type=section&id=(3)%20Exhibits%20Required%20by%20Item%20601%20of%20Regulation%20S-K) - The section includes an index to the consolidated financial statements, which are part of this Form 10-K[672](index=672&type=chunk) - All financial statement schedules are omitted as they are either not required, not applicable, or the information is included in the consolidated financial statements and notes[673](index=673&type=chunk) - A detailed list of exhibits required by Item 601 of Regulation S-K is provided, covering corporate documents, agreements, and certifications[674](index=674&type=chunk) [Item 16. Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K Summary is included in this report - No Form 10-K Summary is included in this report[679](index=679&type=chunk) [Signatures](index=108&type=section&id=Signatures) [Signatures](index=108&type=section&id=Signatures) This section contains the required signatures from executive officers and directors for the Form 10-K report, certifying submission on March 31, 2023 - The report is signed by the Chief Executive Officer, Craig Snyder, and Chief Financial and Legal Officer, Lana Reeve, as principal executive and financial officers[683](index=683&type=chunk) - Additional signatures from directors Donald Hunter, Aaron LoCascio, Renah Persofsky, and Jeff Uttz are included[684](index=684&type=chunk) - All signatures are dated March 31, 2023[683](index=683&type=chunk)[684](index=684&type=chunk)

Greenlane Holdings, Inc. (NASDAQ:GNLN) Q3 2022 Results Conference Call November 15, 2022 4:30 PM ET Company Participants Nick Kovacevich - CEO Darsh Dahya - CAO Craig Snyder - President Conference Call Participants Aaron Grey - Alliance Global Partners Scott Fortune - ROTH Capital Partners Andrew Bond - Jefferies Operator Good afternoon, and welcome to today's conference call to discuss Greenlane Holdings Third Quarter 2022 Financial Results. A press release detailing the financial results for the quarter e ...