Greenlane Holdings, Inc 10-Q for FY2023 Q3

Greenlane Holdings, Inc. (GNLN)

10-Q 2024-01-09 For: 2023-09-30

Added on April 10, 2026

About this 10-Q

Greenlane Holdings, Inc filed this 10-Q on January 9, 2024, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.8M; down 58.9% from $28.68M a year earlier
Net loss: $10.12M; compared with a net loss of $130.5M a year earlier
Diluted EPS: -$1.91; compared with -$198.51 a year earlier

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Delaware						83-0806637
State or other jurisdiction of incorporation or organization						(I.R.S. Employer Identification No.)


1095 Broken Sound Parkway,	Suite 100
Boca Raton,	FL	33487
(Address of principal executive offices)		(Zip Code)


Large accelerated filer	£	Accelerated filer	£
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders' Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II	Other Information
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds , and Issuer Purchases of Equity Securities	35
Item 5.	Other Information	36
Item 6.	Exhibits	45
Signatures		46


	September 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets
Cash	$	2,443	$	6,458
Restricted cash	—		5,718
Accounts receivable, net of allowance of $4,208 and $4,826 at September 30, 2023 and December 31, 2022, respectively	1,925		6,468
Inventories, net	22,638		40,643
Vendor deposits	3,351		6,296
Other current assets (Note 8)	7,152		11,120
Total current assets	37,509		76,703

Property and equipment, net	3,237		3,962
Operating lease right-of-use assets	2,163		3,442
Other assets	5,539		5,578
Total assets	$	48,448	$	89,685

LIABILITIES
Current liabilities
Accounts payable	$	11,909	$	14,953
Accrued expenses and other current liabilities (Note 8)	9,396		11,882
Customer deposits	2,410		3,983
Current portion of notes payable (Note 6)	6,978		3,185
Current portion of operating leases	898		1,528
Current portion of finance leases	128		128
Total current liabilities	31,719		35,659

Notes payable, less current portion and debt issuance costs, net (Note 6)	—		13,040
Operating leases, less current portion	1,238		1,887
Finance leases, less current portion	—		29
Other liabilities	80		79
Total long-term liabilities	1,318		15,035
Total liabilities	33,037		50,694

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; 3,448 shares issued and outstanding as of September 30, 2023; 1,599 shares issued and outstanding as of December 31, 2022*	33		15
Class B common stock, $0.0001 par value per share, 30,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023; 0 shares issued and outstanding as of December 31, 2022*	—		—
Additional paid-in capital*	268,105		264,017
Accumulated deficit	(252,956)		(225,114)
Accumulated other comprehensive income	238		55
Total stockholders’ equity attributable to Greenlane Holdings, Inc.	15,420		38,973
Non-controlling interest	(9)		18
Total stockholders’ equity	15,411		38,991
Total liabilities and stockholders’ equity	$	48,448	$	89,685


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022

Net sales	$	11,800	$	28,680	$	55,384	$	115,130
Cost of sales	8,671		23,711		42,162		96,094
Gross profit	3,129		4,969		13,222		19,036

Operating expenses:
Salaries, benefits and payroll taxes	4,059		7,000		14,586		25,897
General and administrative	5,433		8,547		20,209		30,850
Goodwill and indefinite-lived intangibles impairment	—		66,760		—		66,760
Definite-lived intangibles impairment charge	—		50,694		—		50,694
Property and equipment impairment charge	—		7,336		—		7,336
Depreciation and amortization	524		2,124		1,492		6,876
Total operating expenses	10,016		142,461		36,287		188,413
Loss from operations	(6,887)		(137,492)		(23,065)		(169,377)

Other income (expense), net:
Interest expense	(3,415)		(926)		(5,148)		(1,598)
Other income (expense), net	204		1,173		338		562
Total other income (expense), net	(3,211)		247		(4,810)		(1,036)
Loss before income taxes	(10,098)		(137,245)		(27,875)		(170,413)
Provision for (benefit from) income taxes	—		—		(6)		62
Net loss	(10,098)		(137,245)		(27,869)		(170,475)
Less: Net loss attributable to non-controlling interest	19		(6,742)		(27)		(12,516)
Net loss attributable to Greenlane Holdings, Inc.	$	(10,117)	$	(130,503)	$	(27,842)	$	(157,959)

Net loss attributable to Class A common stock per share - basic and diluted (Note 9)*	$	(1.91)	$	(198.51)	$	(9.67)	$	(277.41)
Weighted-average shares of Class A common stock outstanding - basic and diluted (Note 9)*	5,513		657		2,918		569

Other comprehensive income (loss):
Foreign currency translation adjustments	(24)		(238)		181		(212)
Unrealized gain (loss) on derivative instrument	—		—		—		358
Comprehensive loss	(10,122)		(137,483)		(27,688)		(170,329)
Less: Comprehensive loss attributable to non-controlling interest	—		(6,742)		(8)		(12,430)
Comprehensive loss attributable to Greenlane Holdings, Inc.	$	(10,122)	$	(130,741)	$	(27,680)	$	(157,899)


	Class A Common Stock			Class B Common Stock			Additional Paid-In Capital*		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Non- Controlling Interest		Total Stockholders’ Equity
	Shares*	Amount*		Shares*	Amount*
Balance December 31, 2022	1,599	$	15	—	$	—	$	264,017	$	(225,114)	$	55	$	18	$	38,991
Net loss	—	—		—	—		—		(8,693)		—		(54)		(8,747)
Equity-based compensation	—	—		—	—		110				—		—		110
Issuance of Class A shares - Amended Eyce APA (Note 3)	—	—		—	—		95		—		—		—		95
Other comprehensive income	—	—		—	—		—		—		178		—		178
Balance March 31, 2023	1,599	15		—	—		264,222		(233,807)		233		(36)		30,627
Net loss	—	—		—	—		—		(9,032)		—		8		(9,024)
Equity-based compensation forfeiture, net	(1)	—		—	—		(11)		—		—		—		(11)
Issuance of Class A shares - Amended Eyce APA (Note 3)	—	—		—	—		65		—		—		—		65
Other comprehensive income (loss)	—	—		—	—		—		—		27		—		27
Balance June 30, 2023	1,598	15		—	—		264,276		(242,839)		260		(28)		21,684
Net (loss) income	—	—		—	—		—		(10,117)		—		19		(10,098)
Equity-based compensation	—	—		—	—		(70)		—		—		—		(70)
Issuance of Class A shares - Amended Eyce APA (Note 3)	—	—		—	—		65		—		—		—		65
Issuance of Class A shares (Note 9)	1,850	18		—	—		3,834		—		—		—		3,852
Other comprehensive income (loss)	—	—		—	—		—		—		(22)		—		(22)
Balance Balance September 30, 2023	3,448	$	33	—	$	—	$	268,105	$	(252,956)	$	238	$	(9)	$	15,411


Reconciliation of cash and restricted cash to condensed consolidated balance sheets
	Nine months ended September 30,
	2023		2022
Beginning of the period
Cash	$	6,458	$	12,857
Restricted cash	5,718		—
Total cash and restricted cash, beginning of period	$	12,176	$	12,857

End of the period
Cash	$	2,443	$	8,039
Restricted cash	—		2,155
Total cash and restricted cash, end of period	$	2,443	$	10,194


Supplemental disclosures of cash flow information
Cash paid during the period for interest	$	(4,495)	$	(1,598)
Cash paid for amounts included in the measurement of lease liabilities	$	1,353	$	2,120
Non-cash investing and financing activities:
Non-cash purchases of property and equipment	$	133	$	1,617
Issuance of Class A common stock for business acquisitions	$	—	$	3,486
Decrease in non-controlling interest as a result of exchanges for Class A common stock	$	—	$	(10,291)
Decrease in non-controlling interest as a result of VIBES disposition	$	—	$	(1,789)
Transfer from contingent consideration to notes payable	$	1,150	$	—
Transfer from accrued expenses to notes payable	$	437	$	—


	Condensed Consolidated Balance Sheet Caption	Fair Value at September 30, 2023
(in thousands)		Level 1		Level 2		Level 3		Total
Liabilities:
Contingent consideration - current	Accrued expenses and other current liabilities	$	—	$	—	1,500		1,500
Total Liabilities		$	—	$	—	$	1,500	$	1,500


	Condensed Consolidated Balance Sheet Caption	Fair Value at December 31, 2022
(in thousands)		Level 1		Level 2		Level 3		Total
Liabilities:
Contingent consideration - current	Accrued expenses and other current liabilities	$	—	$	—	$	2,738	$	2,738
Total Liabilities		$	—	$	—	$	2,738	$	2,738


(in thousands)	Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	2,738
Cash payments for earned contingent consideration	(350)
Transfer to notes payable	(1,150)
Loss (gain) from fair value adjustments included in results of operations	262
Balance September 30, 2023	$	1,500


(in thousands)	Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	6,857
Eyce 2021 Contingent Payment settlement in Class A common stock	(875)
Eyce 2021 Contingent Payment settlement in cash	(875)
DaVinci 2021 Contingent Payment settlement in Class A common stock	(2,611)
Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA	(267)
Gain from fair value adjustments included in results of operations	(929)
Balance at September 30, 2022	$	1,300


(in thousands)	Operating Leases
Remainder of 2023	$	261
2024	914
2025	942
2026	81
2027 and thereafter	—
Total minimum lease payments	$	2,197
Less: imputed interest	61
Present value of minimum lease payments	$	2,136
Less: current portion	898
Long-term portion	$	1,238


	For the nine months ended September 30,
(in thousands)	2023		2022
Operating lease cost	1,474		2,120
Variable lease cost	461		696
Total lease cost	$	1,935	$	2,816


	Operating Leases
Weighted average remaining lease terms	2.2 years
Weighted average discount rate	2.3	%


(in thousands)	September 30, 2023		December 31, 2022
Asset-Based Loan	$	—	$	15,000
DaVinci Promissory Note	653		2,538
Eyce Promissory Note	—		647
Future Receivables Financings	2,150		—
Secured Bridge Loan	4,175		—
	6,978		18,185
Less unamortized debt issuance costs	—		(1,960)
Less current portion of debt	(6,978)		(3,185)
Debt, net, excluding operating and finance leases and liabilities	$	—	$	13,040


(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


(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


($ in thousands)	August 2021 (Inception) through September 30, 2023
Class A shares sold*	97,262
Gross proceeds	$	12,684
Fees paid to sales agent	$	381
Net proceeds	$	12,303


(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


(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


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Numerator:
Net loss	$	(10,098)	$	(137,245)	$	(27,869)	$	(170,475)
Less: Net loss attributable to non-controlling interests	19		(6,742)		(27)		(12,516)
Plus: Deemed Dividend on "October 2022 Standard Warrants"	$	(388)	$	—	$	(388)	$	—
Net loss attributable to Class A common stockholders	$	(10,505)	$	(130,503)	$	(28,230)	$	(157,959)
Denominator:
Weighted average shares of Class A common stock outstanding*	5,513		657		2,918		569
Net loss per share of Class A common stock - basic and diluted*	$	(1.91)	$	(198.51)	$	(9.67)	$	(277.41)


	For the three months ended September 30,				For the nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Stock options - Class A common stock	$	(77)	$	82	$	2	$	1,017
Restricted shares - Class A common stock	8		105		29		463
Restricted stock units (RSUs) - Class A common stock	—		—		—		11
Total equity-based compensation expense	$	(69)	$	187	$	31	$	1,491


	Remaining Unrecognized Compensation Expense September 30, 2023		Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized
	(in thousands)		(in years)
Stock options - Class A common stock	$	45	1.1
Restricted shares - Class A common stock	26		1.1
Total remaining unrecognized compensation expense	$	71


	For the nine months ended September 30, 2023						For the nine months ended September 30, 2022
(in thousands)	Consumer Goods		Industrial Goods		Total		Consumer Goods		Industrial Goods		Total
Net sales	$	19,823	$	35,561	$	55,384	$	41,617	$	73,513	$	115,130
Cost of sales	13,942		28,220		42,162		35,104		60,990		96,094
Gross profit	$	5,881	$	7,341	$	13,222	$	6,513	$	12,523	$	19,036


	As of September 30, 2023						As of December 31, 2022












(in thousands)	Consumer Goods		Industrial Goods		Total		Consumer Goods		Industrial Goods		Total
Accounts receivable, net	$	1,129	$	796	$	1,925	$	967	$	5,501	$	6,468
Inventories, net	$	15,032	$	7,606	$	22,638	$	19,259	$	21,384	$	40,643
Vendor deposits	$	2,205	$	1,146	$	3,351	$	3,269	$	3,027	$	6,296


	Three Months Ended September 30,												Nine Months Ended September 30,
					% of Net sales				Change								% of Net sales				Change
	2023		2022		2023		2022		$		%		2023		2022		2023		2022		$		%
Net sales	11,800		28,680		100.0	%	100.0	%	$	(16,880)	(58.9)	%	55,384		115,130		100.0	%	100.0	%	$	(59,746)	(51.9)	%
Cost of sales	8,671		23,711		73.5	%	82.7	%	(15,040)		(63.4)	%	42,162		96,094		76.1	%	83.5	%	(53,932)		(56.1)	%
Gross profit	3,129		4,969		26.5	%	17.3	%	(1,840)		(37.0)	%	13,222		19,036		23.9	%	16.5	%	(5,814)		(30.5)	%

Operating expenses:
Salaries, benefits and payroll taxes	4,059		7,000		34.4	%	24.4	%	(2,941)		(42.0)	%	14,586		25,897		26.3	%	22.5	%	(11,311)		(43.7)	%
General and administrative	5,433		8,547		46.0	%	29.8	%	(3,114)		(36.4)	%	20,209		30,850		36.5	%	26.8	%	(10,641)		(34.5)	%
Goodwill and indefinite-lived intangibles impairment charge	—		66,760		—	%	232.8	%	(66,760)		(100.0)	%	—		66,760		—	%	58.0	%	(66,760)		(100.0)	%
Definite-lived intangibles impairment charge	—		50,694		—	%	176.8	%	(50,694)		(100.0)	%	—		50,694		—	%	44.0	%	(50,694)		(100.0)	%
Property and equipment impairment charge	—		7,336		—	%	25.6	%	(7,336)		(100.0)	%	—		7,336		—	%	6.4	%	(7,336)		(100.0)	%
Depreciation and amortization	524		2,124		4.4	%	7.4	%	(1,600)		(75.3)	%	1,492		6,876		2.7	%	6.0	%	(5,384)		(78.3)	%
Total operating expenses	10,016		142,461		84.8	%	496.8	%	(132,445)		(93.0)	%	36,287		188,413		65.5	%	163.7	%	(152,126)		(80.7)	%
Loss from operations	(6,887)		(137,492)		(58.3)	%	(479.4)	%	130,605		(95.0)	%	(23,065)		(169,377)		(41.6)	%	(147.1)	%	146,312		(86.4)	%

Other income (expense), net:
Interest expense	(3,415)		(926)		(28.9)	%	(3.2)	%	(2,489)		268.8	%	(5,148)		(1,598)		(9.3)	%	(1.4)	%	(3,550)		222.2	%
Other income (expense), net	204		1,173		1.7	%	4.1	%	(969)		(82.6)	%	338		562		0.6	%	0.5	%	(224)		(39.9)	%
Total other expense, net	(3,211)		247		(27.2)	%	0.9	%	(3,458)		*		(4,810)		(1,036)		(8.7)	%	(0.9)	%	(3,774)		*
Loss before income taxes	(10,098)		(137,245)		(85.5)	%	(478.6)	%	127,147		(92.6)	%	(27,875)		(170,413)		(50.3)	%	(148.1)	%	142,538		(83.6)	%
Provision for (benefit from) income taxes	—		—		—	%	—	%	—		*		(6)		62		—	%	0.1	%	(68)		(109.7)	%
Net loss	(10,098)		(137,245)		(85.5)	%	(478.6)	%	127,147		(92.6)	%	(27,869)		(170,475)		(50.3)	%	(148.2)	%	142,606		(83.7)	%
Net loss attributable to non-controlling interest	19		(6,742)		0.2	%	(23.5)	%	6,761		(100.3)	%	(27)		(12,516)		(0.2)	%	(10.9)	%	12,489		(99.8)	%
Net loss attributable to Greenlane Holdings, Inc.	$	(10,117)	$	(130,503)	(85.7)	%	(455.0)	%	$	120,386	(92.2)	%	$	(27,842)	$	(157,959)	(50.1)	%	(137.2)	%	$	130,117	(82.4)	%


	Three Months Ended September 30,												Nine Months Ended September 30,
					% of Total Net sales				Change								% of Total Net sales				Change
	2023		2022		2023		2022		$		%		2023		2022		2023		2022		$		%
Net sales:
Consumer Goods	$	5,988	$	8,565	50.7	%	29.9	%	$	(2,577)	(30.1)	%	$	19,823	$	41,617	35.8	%	36.1	%	$	(21,794)	(52.4)	%
Industrial Goods	5,812		20,115		49.3	%	70.1	%	(14,303)		(71.1)	%	35,561		73,513		64.2	%	63.9	%	(37,952)		(51.6)	%
Total net sales	$	11,800	$	28,680									$	55,384	$	115,130

					% of Segment Net sales				Change								% of Segment Net sales				Change
Cost of sales:	2023		2022		2023		2022		$		%		2023		2022		2023		2022		$		%
Consumer Goods	$	4,197	$	7,937	70.1	%	92.7	%	$	(3,740)	(47.1)	%	$	13,942	$	35,104	70.3	%	84.4	%	$	(21,162)	(60.3)	%
Industrial Goods	4,474		15,774		77.0	%	78.4	%	(11,300)		(71.6)	%	28,220		60,990		79.4	%	83.0	%	(32,770)		(53.7)	%
Total cost of sales	$	8,671	$	23,711									$	42,162	$	96,094

Gross profit:
Consumer Goods	$	1,791	$	628	29.9	%	7.3	%	$	1,163	185.2	%	$	5,881	$	6,513	29.7	%	15.6	%	$	(632)	(9.7)	%
Industrial Goods	1,338		4,341		23.0	%	21.6	%	(3,003)		(69.2)	%	7,341		12,523		20.6	%	17.0	%	(5,182)		(41.4)	%
Total gross profit	$	3,129	$	4,969									$	13,222	$	19,036


Exhibit Number						Description

4.1						Form of July 2023 Standard Warrant (Incorporated by reference to Exhibit 4.1 to Greenlane's Current Report on Form 8-K, filed on July 3, 2023).
4.2						Form of July 2023 Pre-Funded Warrant (Incorporated by reference to Exhibit 4.2 to Greenlane's Current Report on Form 8-K, filed on July 3, 2023).
4.3						Form of July 2023 Warrant Amendment (Incorporated by reference to Exhibit 4.3 to Greenlane's Current Report on Form 8-K, filed on July 3, 2023).
10.1						Form of July 2023 Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to Greenlane's Current Report on Form 8-K, filed on July 3, 2023).
10.2						Placement Agency Agreement, dated as of June 29, 2023 (Incorporated by reference to Exhibit 10.2 to Greenlane's Current Report on Form 8-K, filed on July 3, 2023).
10.3						Loan and Security Agreement, dated as of September 22, 2023, between Greenlane and S ynergy Imports, LLC .
10.4						S ecured Promissory Note, dated as of Septem ber 22, 2023, between Greenlane and S ynergy I mports , LLC.
31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*						The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Stockholders’ Equity, and (iv) Condensed Consolidated Statements of Cash Flows. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104*						Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL.


	GREENLANE HOLDINGS, INC.

Date: January 9, 2024	By:	/s/ Lana Reeve
		Lana Reeve Chief Financial and Legal Officer (Principal Financial and Accounting Officer)


Date: January 9, 2024			/s/ Craig Snyder
			Craig Snyder
			Chief Executive Officer
			(Principal Executive Officer)


Date: January 9, 2024			/s/ Lana Reeve
			Lana Reeve
			Chief Financial and Legal Officer
			(Principal Financial Officer)