Quarterly report pursuant to Section 13 or 15(d)

Supplemental Financial Statement Information

v3.23.4
Supplemental Financial Statement Information
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
Supplemental Financial Statement Information SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
ERC Sale

As of December 31, 2022, we had recorded an Employee Retention Credit (“ERC”) receivable of $4.9 million within "Other current assets" on our consolidated balance sheets, and a corresponding amount was included in "Other income (expense), net" in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2022. On February 16, 2023, two of Greenlane Holdings, Inc.’s subsidiaries, Warehouse Goods LLC and KIM International LLC (collectively, the “Company”), entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $4.9 million in cash, an economic participation interest, at a discount, in all of the Company’s rights to payment from the United States Internal Revenue Service with respect to the employee retention credits filed by the Company under the ERC program.
Other Current Assets
The following table summarizes the composition of other current assets as of the dates indicated:
(in thousands) September 30, 2023 December 31, 2022
Other current assets:
Employee retention credit (ERC) receivable $ —  $ 4,854 
VAT refund receivable (Note 2) 1,878  143 
Prepaid expenses 2,757  1,293 
Indemnification receivable, net 7  736 
Customs bonds 1,200  1,378 
Other 1,310  2,716 
$ 7,152  $ 11,120 
Accrued Expenses and Other Current Liabilities
The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated:
(in thousands) September 30, 2023 December 31, 2022
Accrued expenses and other current liabilities:
VAT payable (including amounts related to VAT matter described in Note 2) $ 3,663  $ 2,809 
Contingent consideration 1,500  2,738 
Accrued employee compensation 2,323  3,812 
Amended Eyce APA —  430 
Accrued professional fees 320  818 
Refund liability (including accounts receivable credit balances) 113  329 
Accrued construction in progress (ERP) —  170 
Sales tax payable 672  578 
Other 805  198 
$ 9,396  $ 11,882 
Customer Deposits
For certain product offerings we may receive a deposit from the customer (generally 25% - 50% of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. We typically complete orders related to customer deposits within one to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of sale with each customer. Changes in our customer deposits liability balance during the nine months ended September 30, 2023 were as follows:
(in thousands) Customer Deposits
Balance as of December 31, 2022 $ 3,983 
Increases due to deposits received, net of other adjustments 4,135 
Revenue recognized (5,708)
Balance as of September 30, 2023 $ 2,410 

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) for the periods presented were as follows:
(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total
Balance at December 31, 2022 $ 55  $ —  $ 55 
Other comprehensive income (loss) 183  —  183 
Less: Other comprehensive (income) loss attributable to non-controlling interest —  —  — 
Balance at September 30, 2023 $ 238  $ —  $ 238 
(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total
Balance at December 31, 2021 $ 282  $ 42  $ 324 
Other comprehensive income (loss) (212) 358  146 
Less: Reclassification adjustment for (gain) loss included in net loss (Note 4) —  (332) (332)
Less: Other comprehensive (income) loss attributable to non-controlling interest (17) (68) (85)
Balance at September 30, 2022 $ 53  $ —  $ 53 
Supplier Concentration
Our four largest vendors accounted for an aggregate of approximately 64.2% and 74.7% of our total purchases for the three and nine months ended September 30, 2023, respectively, and an aggregate of approximately 66.9% and 72.6% of our total purchases for the three and nine months ended September 30, 2022, respectively. We expect to maintain our relationships with these vendors.
Related Party Transactions
Nicholas Kovacevich, our former Chief Corporate Development Officer, owns capital stock of Unrivaled Brands Inc. (“Unrivaled”) and serves on the Unrivaled board of directors. Net sales to Unrivaled totaled approximately $0 for both the three and nine months ended September 30, 2023, respectively, and $0 and $0.4 million for the three and nine months ended September 30, 2022, respectively. Total accounts receivable due from Unrivaled were approximately $0.4 million as of September 30, 2023 and December 31, 2022, respectively. On February 8, 2023, we filed a lawsuit against Unrivaled in Superior Court of California, Orange County, seeking to compel the repayment of Unrivaled's open balance due to us. We can provide no assurances that we will be successful in this lawsuit, or that the amounts due to us, or any portion thereof, will be recovered.
Three individuals who were employees of the Company at the time are principals in Synergy Imports, LLC the Lender on the Secured Bridge Loan taken out on September 22, 2023, however, none are executive officers or directors of the Company.