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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, 2022
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)
Delaware83-0806637
State or other jurisdiction of
incorporation or organization
(I.R.S. Employer
Identification No.)
1095 Broken Sound Parkway,Suite 300
Boca Raton, FL33487
(Address of principal executive offices)(Zip Code)
(877) 292-7660
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.01 par value per shareGNLNNasdaq Global Market
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes     No 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. Yes     No 
Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No  £
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
£
Accelerated filer
£
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.












Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  ☒
As of November 10, 2022, Greenlane Holdings, Inc. had 15,803,512 shares of Class A common stock outstanding and 147,989 shares of Class B common stock outstanding.





Greenlane Holdings, Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2022

TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Other Information
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
Signatures




PART I
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

GREENLANE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value per share amounts)
September 30,
2022
December 31,
2021
ASSETS(Unaudited)
Current assets
Cash$8,039 $12,857 
Restricted cash2,155  
Accounts receivable, net of allowance of $4,275 and $1,285 at September 30, 2022 and December 31, 2021, respectively
11,805 14,690 
Inventories, net47,945 66,982 
Vendor deposits9,167 18,475 
Other current assets (Note 8)7,360 11,733 
Total current assets86,471 124,737 
Property and equipment, net11,838 20,851 
Intangible assets, net55,294 84,710 
Goodwill 41,860 
Operating lease right-of-use assets5,498 9,128 
Other assets6,227 4,541 
Total assets$165,328 $285,827 
LIABILITIES
Current liabilities
Accounts payable$16,295 $23,041 
Accrued expenses and other current liabilities (Note 8)20,679 25,297 
Customer deposits4,523 7,924 
Current portion of notes payable, including $0 and $8,000 owed to related party as of September 30, 2022 and December 31, 2021, respectively (Note 6)
3,156 11,615 
Current portion of operating leases2,462 3,091 
Total current liabilities47,115 70,968 
Notes payable, less current portion and debt issuance costs, net (Note 6)13,488 10,607 
Operating leases, less current portion3,027 6,142 
Other liabilities154 1,746 
Total long-term liabilities16,669 18,495 
Total liabilities63,784 89,463 
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY*
Preferred stock, $0.0001 par value, 10,000 shares authorized, none issued and outstanding
  
Class A common stock, $0.01 par value per share, 600,000 shares authorized; 7,470 shares issued and outstanding as of September 30, 2022; 4,260 shares issued and outstanding as of December 31, 2021*
68 43 
Class B common stock, $0.0001 par value per share, 30,000 shares authorized; 148 shares issued and outstanding as of September 30, 2022; 1,087 shares issued and outstanding as of December 31, 2021*
  
Class C Common stock, $0.0001 par value per share, no shares authorized, issued and outstanding as of September 30, 2022 and December 31, 2021
  
Additional paid-in capital*259,314 229,705 
Accumulated deficit(158,109)(55,544)
Accumulated other comprehensive income53 324 
Total stockholders’ equity attributable to Greenlane Holdings, Inc.
101,326 174,528 
Non-controlling interest218 21,836 
Total stockholders’ equity101,544 196,364 
Total liabilities and stockholders’ equity$165,328 $285,827 
*After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022.

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



GREENLANE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands, except per share amounts)
Three months ended September 30,Nine months ended September 30,
2022202120222021
Net sales$28,680 $41,314 $115,130 $110,038 
Cost of sales23,711 39,827 96,094 90,943 
Gross profit4,969 1,487 19,036 19,095 
Operating expenses:
Salaries, benefits and payroll taxes7,000 11,192 25,897 23,158 
General and administrative8,547 16,795 30,850 34,774 
Goodwill and indefinite-lived intangibles impairment66,760  66,760  
Depreciation and amortization2,124 1,199 6,876 2,385 
Total operating expenses84,431 29,186 130,383 60,317 
Loss from operations(79,462)(27,699)(111,347)(41,222)
Other income (expense), net:
Interest expense(926)(119)(1,598)(368)
Other income (expense), net1,173 (894)562 (690)
Total other income (expense), net247 (1,013)(1,036)(1,058)
Loss before income taxes(79,215)(28,712)(112,383)(42,280)
Provision for (benefit from) income taxes 3 62 (11)
Net loss(79,215)(28,715)(112,445)(42,269)
Less: Net loss attributable to non-controlling
interest
(4,106)(12,434)(9,880)(18,689)
Net loss attributable to Greenlane Holdings, Inc.$(75,109)$(16,281)$(102,565)$(23,580)
Net loss attributable to Class A common stock per share - basic and diluted (Note 9)*
$(11.43)$(8.19)$(18.01)$(19.60)
Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 9)*
6,574 1,987 5,694 1,203 
Other comprehensive income (loss):
Foreign currency translation adjustments(238)(147)(212)(59)
Unrealized gain (loss) on derivative instrument 52 358 256 
Comprehensive loss
(79,453)(28,810)(112,299)(42,072)
Less: Comprehensive loss attributable to non-controlling interest
(4,106)(12,479)(9,794)(18,556)
Comprehensive loss attributable to Greenlane Holdings, Inc.
$(75,347)$(16,331)$(102,505)$(23,516)
*After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5


GREENLANE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Additional
Paid-In
Capital*
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Non-
Controlling
Interest
Total
Stockholders’
Equity
Shares*Amount*Shares*Amount*SharesAmount
Balance December 31, 20214,260 $43 1,087 $  $ $229,705 $(55,544)$324 $21,836 $196,364 
Net loss— — — — — — — (15,332)— (3,417)(18,749)
Equity-based compensation94 1 — — — — 729 — — 172 902 
Issuance of Class A shares, net of costs - ATM Program557 6 — — — — 6,795 — — — 6,801 
Issuance of Class A shares - contingent consideration191 2 — — — — 3,484 — — — 3,486 
Exchanges of noncontrolling interest for Class A common stock28 — (28)— — — 543 — — (543) 
Other comprehensive income— — — — — — — — 361 85 446 
Balance March 31, 20225,130 52 1,059    241,256 (70,876)685 18,133 189,250 
Net loss— — — — — — — (12,124)— (2,357)(14,481)
Equity-based compensation(4)— — — — — 371 — — 75 446 
Issuance of Class A shares, net of costs - ATM Program296 3 — — — — 2,221 — — — 2,224 
Issuance of Class A shares, net of costs - June 2022 Offering585 6 — — — — 5,034 — — — 5,040 
Issuance of Class A shares - Amended Eyce APA (Note 3)72 1 — — — — 309 — — — 310 
Reclassification adjustment for gain included in net loss (Note 4)— — — — — — — — (332)— (332)
Other comprehensive income (loss)— — — — — — — — (62)— (62)
Balance June 30, 20226,079 62 1,059    249,191 (83,000)291 15,851 182,395 
Net loss— — — — — — — (75,109)— (4,106)(79,215)
Equity-based compensation(15)(3)— — — — 178 — — 10 185 
Issuance of Class A shares - Amended Eyce APA (Note 3)— — — — — — 206 — — — 206 
Issuance of Class A shares - Prefunded warrants exercise (Note 9)495 — — — — — — — — — — 
Exchanges of noncontrolling interest for Class A common stock911 9 (911)— — — 9,739 — — (9,748) 
VIBES disposition / deconsolidation (Note 3)— — — — — — — — — (1,789)(1,789)
Other comprehensive income (loss)— — — — — — — — (238)— (238)
Balance September 30, 20227,470 $68 148 $  $ $259,314 $(158,109)$53 $218 $101,544 

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

The accompanying notes are an integral part of these consolidated financial statements.
6


Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Additional
Paid-In
Capital*
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Non-
Controlling
Interest
Total
Stockholders’
Equity
Shares*Amount*Shares*Amount*SharesAmount
Balance December 31, 2020666 $7 175 $ 76,039 $8 $39,869 $(24,848)$29 $54,192 $69,257 
Net loss— — — — — — — (4,256)— (3,458)(7,714)
Equity-based compensation11 — — — — — 182 — — 324 506 
Other comprehensive income— — — — — — — — 18 31 49 
Issuance of Class A common stock21 — — — — — 2,005 — — — 2,005 
Exchanges of noncontrolling interest for Class A common stock118 1 (52)— (3,975)(1)5,797 — — (5,797) 
Cancellation of Class B common stock due to forfeitures— — — — — — 8 — — (8) 
Balance March 31, 2021816 8 123  72,064 7 47,861 (29,104)47 45,284 64,103 
Net loss— — — — — — — (3,043)— (2,797)(5,840)
Equity-based compensation(1)— — — — — 161 — — 246 407 
Exchanges of noncontrolling interest for Class A common stock30 — — — (1,763)— 983 — — (983) 
Exercise of Class A common stock options2 — 112 — — — 112 
Member distributions— — — — — — — (200)— — (200)
Other comprehensive income— — — — — — — — 96 147 243 
Balance June 30, 2021847 $8 123 $ 70,301 $7 $49,117 $(32,347)$143 $41,897 $58,825 
Net loss— — — — — — — (16,281)— (12,434)(28,715)
Equity-based compensation— — — — — — 2,036 — — 1,772 3,808 
Exchanges of noncontrolling interest for Class A common stock201 2 (201)— — — 5,368 — — (5,370) 
Exercise of Class A common stock options and warrants299 3 — — — — 153 — — — 156 
Conversion of Class C common stock— — 1,172 — (70,301)(7)7 — — —  
Issuance of Class A common stock, net of costs2,644 26 — — — — 166,187 — — — 166,213 
Other comprehensive loss        (51)(44)(95)
Balance September 30, 20213,991 $39 1,094 $  $ $222,868 $(48,628)$92 $25,821 $200,192 

*After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7


GREENLANE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine months ended September 30,
20222021
Cash flows from operating activities:
Net loss (including amounts attributable to non-controlling interest)$(112,445)$(42,269)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization6,876 2,385 
Equity-based compensation expense2,020 4,762 
Goodwill and indefinite-lived intangibles impairment charge66,760  
Change in fair value of contingent consideration(1,197)755 
Change in provision for doubtful accounts2,637 318 
Gain related to indemnification asset(2,018)(1,692)
(Gain) loss on disposal of fixed assets820 109 
(Gain) loss on disposal of held-for-sale assets(780)97 
Gain related to VIBES disposition / deconsolidation (Note 3)(2,062) 
Unrealized loss on equity investments1,214 305 
Realized (gain) loss on interest rate swap contract(408) 
Amortization of deferred financing costs and debt discount446 15 
Other(17)7 
Changes in operating assets and liabilities, net of the effects of acquisitions:
Decrease (increase) in accounts receivable247 (2,092)
Decrease (increase) in inventories19,044 9,723 
Decrease (increase) in vendor deposits5,027 (661)
Decrease (increase) in other current assets1,257 9,985 
(Decrease) increase in accounts payable(5,384)(7,673)
(Decrease) Increase in accrued expenses and other liabilities(1,124)(5,957)
(Decrease) increase in customer deposits(3,401)(145)
Net cash used in operating activities(22,488)(32,028)
Cash flows from investing activities:
Purchase consideration paid for acquisitions, net of cash acquired (12,284)
Proceeds from VIBES disposition (Note 3)4,567  
Purchases of property and equipment, net(1,660)(2,327)
Proceeds from sale of assets held for sale9,593 675 
Purchase of intangible assets, net (320)
Net cash provided by (used in) investing activities12,500 (14,256)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net of costs14,064 29,539 
Proceeds from exercise of stock options and warrants 268 
Proceeds from Asset-Based Loan14,550  
Debt issuance costs(1,472)(100)
Payments on Eyce and DaVinci promissory notes(2,791)(294)
Payments on Real Estate Note(7,958)(120)
Repayment of Bridge Loan(8,000) 
Proceeds from termination of interest rate swap145  
Purchase consideration paid for Eyce LLC acquisition(875) 
Member distributions (200)
Other(128)(222)
Net cash provided by financing activities7,535 28,871 
Effects of exchange rate changes on cash and restricted cash(210)193 
Net (decrease) in cash and restricted cash(2,663)(17,220)
Cash and restricted cash, as of beginning of the period12,857 30,435 
Cash and restricted cash, as of end of the period$10,194 $13,215 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8


GREENLANE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(in thousands)

Reconciliation of cash and restricted cash to condensed consolidated balance sheets
Nine months ended September 30,
20222021
Beginning of the period
Cash$12,857 $30,435 
Restricted cash  
Total cash and restricted cash, beginning of period$12,857 $30,435 
End of the period
Cash$8,039 $13,215 
Restricted cash2,155  
Total cash and restricted cash, end of period$10,194 $13,215 
Supplemental disclosures of cash flow information
Cash paid for amounts included in the measurement of lease liabilities$2,120 $1,093 
Lease liabilities arising from obtaining finance lease assets$ $119 
Non-cash investing and financing activities:
Non-cash purchases of property and equipment$1,617 $381 
Issuance of Class A common stock for business acquisitions$3,486 $125,496 
Issuance of warrants and stock options for acquisition$ $13,182 
Issuance of promissory note for business acquisition$ $2,503 
Issuance of contingent consideration for acquisition$ $1,828 
Decrease in non-controlling interest as a result of exchanges for Class A common stock$(10,291)$(12,150)
Decrease in non-controlling interest as a result of VIBES disposition$(1,789)$ 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9


GREENLANE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BUSINESS OPERATIONS AND ORGANIZATION
Organization
Greenlane Holdings, Inc. (“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, "we", "us", and "our") was formed as a Delaware corporation on May 2, 2018. We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”) of shares of our Class A common stock, $0.01 par value per share (“Class A common stock”), in order to carry on the business of Greenlane Holdings, LLC (the “Operating Company”). The Operating Company was organized under the laws of the state of Delaware on September 1, 2015, and is based in Boca Raton, Florida. Unless the context otherwise requires, references to the “Company” refer to us, and our consolidated subsidiaries, including the Operating Company.
We are the sole manager of the Operating Company and our principal asset is Common Units of the Operating Company (“Common Units”). As the sole manager of the Operating Company, we operate and control all of the business and affairs of the Operating Company, and we conduct our business through the Operating Company and its subsidiaries. We have a board of directors and executive officers, but no employees. All of our assets are held and all of the employees are employed by the Operating Company and its subsidiaries.
We have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of, and receive benefits from, the Operating Company, that could be significant. We determined that the Operating Company is a variable interest entity (“VIE”) and that we are the primary beneficiary of the Operating Company. Accordingly, pursuant to the VIE accounting model, beginning in the fiscal quarter ended June 30, 2019, we consolidated the Operating Company in our consolidated financial statements and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common Units held by us) on our consolidated financial statements.
On August 31, 2021, we completed our previously announced merger with KushCo Holdings, Inc. ("KushCo") and have included the results of operations of KushCo in our consolidated statements of operations and comprehensive loss from that date forward. As such, the KushCo financial information included in our condensed consolidated financial statements for the three and nine months ended September 30, 2021 is for the period commencing on August 31, 2021 (the date of the closing of the merger) through September 30, 2021. Also, KushCo financial information is included in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. Immediately following the merger with KushCo, stockholders that held Class A common stock prior to the completion of the merger owned 51.9% and former KushCo stockholders owned 48.1% of the equity of the combined company on a fully diluted basis. In connection with the merger with KushCo, the Greenlane Certificate of Incorporation was amended and restated (the “A&R Charter”) in order to (i) increase the number of authorized shares of Greenlane Class B common stock, $0.0001 par value per share (the “Class B Common stock”), from