NOTE 8. 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:

SCHEDULE OF OTHER CURRENT ASSETS 

Accrued Expenses and Other Current Liabilities

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

 SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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. During the six months ended June 30, 2024, the Company was still assessing any need to recognize certain deposits as income or offset against any outstanding receivables. The Company plans to resolve any outstanding customer deposits by December 31, 2024. Changes in our customer deposits liability balance during the six months ended June 30, 2024 were as follows:

 SCHEDULE OF CHANGES IN CUSTOMER DEPOSIT LIABILITY

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income for the periods presented were as follows:

SCHEDULE OF COMPONENTS OF ACCUMULATED COMPREHENSIVE INCOME LOSS 

Supplier Concentration

Our four largest vendors accounted for an aggregate of approximately 26.5% and 25.2% of our total purchases for the three and six months ended June 30, 2024, respectively, and an aggregate of approximately 89.9% and 82.2% of our total purchases for the three and six months ended June 30, 2023, respectively.

Related Party Transactions

Nicholas Kovacevich, our former Chief Corporate Development Officer owns capital stock of Blum Holdings Inc. (“Blum”). Net sales to Blum totaled approximately $0.4 million for the ended December 31, 2022. Total accounts receivable due from Blum were approximately $0.4 million as of June 30, 2024 and December 31, 2023, respectively. On February 8, 2023, we filed a lawsuit against Blum in Superior Court of California, Orange County, seeking to compel the repayment of Blum’s open balance due to us. As of the date of these financial statements were available to be issued, there has been a judgement received in favor of the Company.

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 were executive officers or directors of the Company.