|
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
5099
(Primary Standard Industrial
Classification Code Number) |
| |
83-0806637
(I.R.S. Employer
Identification Number) |
|
|
Justin R. Salon
David P. Slotkin John Hensley Morrison & Foerster LLP 2100 L Street, NW Suite 900 Washington, D.C. 20037 Tel: (202) 887-1500 |
| |
Jennifer W. Cheng
Marc D. Hauser Wendy Grasso Reed Smith LLP 599 Lexington Avenue New York, NY 10022-7650 Tel: (212) 521-5400 |
| |
Nicholas Kovacevich
Chairman and Chief Executive Officer KushCo Holdings, Inc. 6261 Katella Avenue, Suite 250 Cypress, CA 90630 Tel: (714) 243-4311 |
|
|
Large Accelerated filer ☐
|
| |
Accelerated filer ☐
|
| |
Non-accelerated filer ☒
|
| |
Smaller reporting company ☒
Emerging growth company ☒ |
|
| | |||||||||||||||||||||||||
Title of each class of securities to be registered
|
| | |
Amount to be
registered(1) |
| | |
Proposed maximum
offering price per share |
| | |
Proposed maximum
aggregate offering price(2) |
| | |
Amount of
registration fee(3) |
| |||||||||
Class A Common Stock, $0.01 par value per share
|
| | |
51,454,940 shares
|
| | | | | N/A | | | | | | $ | 247,234,114.00 | | | | | | $ | 26,974.22 | | |
|
|
| |
|
|
|
Aaron LoCascio
Chief Executive Officer Greenlane Holdings, Inc. |
| |
Nicholas Kovacevich
Chairman and Chief Executive Officer
KushCo Holdings, Inc.
|
|
| |
Your vote is important. Whether or not you expect to attend the Greenlane annual meeting in person, we urge you to authorize a proxy to vote your shares of Greenlane common stock as promptly as possible by (1) accessing the Internet website specified on your proxy card, (2) calling the toll-free number specified on your proxy card, or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of Greenlane common stock may be represented and voted at the Greenlane annual meeting. If your shares of Greenlane common stock are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by the record holder of your shares of Greenlane common stock.
|
| |
| | Your vote is important. Whether or not you expect to attend the KushCo special meeting online, we urge you to authorize a proxy to vote your shares of KushCo common stock as promptly as possible by (1) accessing the Internet website specified on your proxy card, (2) calling the toll-free number specified on your proxy card, or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of KushCo common stock may be represented and voted at the KushCo special meeting. If your shares of KushCo common stock are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by the record holder of your shares of KushCo common stock. | | |
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| EXPERTS | | | | | 319 | | |
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| | | | | F-1 | | | |
|
ANNEXES
|
| | | | | | |
| | | | | A-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | | |
| | | | | D-1 | | | |
| | | | | E-1 | | |
|
If you are an Greenlane stockholder:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor New York, NY 10005 Telephone: (212) 269-5550 (banks and brokers call collect at (800) 317-8033 Email: GNLN@dfking.com |
| |
If you are an KushCo stockholder:
Morrow Sodali
509 Madison Avenue New York, New York 10022 Telephone: (800) 662-5200 (in North America) (203) 658-9400 (outside of North America) Email: KSHB@info.morrowsodali.com |
|
| | |
Greenlane Class A
Common Stock |
| |
KushCo
Common Stock |
| |
KushCo
Pro Forma Equivalent |
| |||||||||
March 29, 2021
|
| | | $ | 4.44 | | | | | $ | 1.24 | | | | | $ | 1.13 | | |
June 29, 2021
|
| | | $ | 4.82 | | | | | $ | 1.22 | | | | | $ | 1.22 | | |
Member
|
| |
Audit Committee
|
| |
Compensation
Committee |
| |
Nominating and
Corporate Governance Committee |
|
Neil Closner | | |
X
|
| |
X
|
| |
X (chair)
|
|
Richard Taney | | |
X
|
| |
X (chair)
|
| |
X
|
|
Jeff Uttz* | | |
X (chair)
|
| |
X
|
| |
X
|
|
Name
|
| |
Fees
Paid in Cash |
| |
Option
Awards(1) |
| |
Total
|
| |||||||||
Neil Closner
|
| | | $ | 96,000 | | | | | $ | 100,009 | | | | | $ | 196,009 | | |
Richard Taney
|
| | | $ | 96,000 | | | | | $ | 100,009 | | | | | $ | 196,009 | | |
Jeff Uttz
|
| | | $ | 96,000 | | | | | $ | 100,009 | | | | | $ | 196,009 | | |
Name and Principal Position
|
| |
Year
|
| |
Salary
|
| |
Bonus
|
| |
Option Awards(1)
|
| |
Stock
Awards |
| |
All Other
Compensation |
| |
Total
|
| |||||||||||||||||||||
Aaron LoCascio
Chief Executive Officer |
| | | | 2020 | | | | | $ | 380,000 | | | | | | — | | | | | $ | 342,000 | | | | | | — | | | | | $ | 13,969 | | | | | $ | 735,969 | | |
| | | 2019 | | | | | | 379,824 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 379,824 | | | ||
Adam Schoenfeld
Chief Strategy Officer |
| | | | 2020 | | | | | $ | 380,000 | | | | | $ | 73,000 | | | | | $ | 342,000 | | | | | | — | | | | | $ | 13,969 | | | | | $ | 808,969 | | |
| | | 2019 | | | | | | 379,824 | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,174(2) | | | | | | 401,998 | | | ||
William Mote(3)
Chief Financial Officer |
| | | | 2020 | | | | | $ | 119,704 | | | | | $ | 40,800 | | | | | $ | 224,000 | | | | | | — | | | | | | — | | | | | $ | 409,367 | | |
Name
|
| |
Number of
Securities Underlying Unexercised Options Exercisable |
| |
Number of
Securities Underlying Unexercised Options Unexercisable |
| |
Option
Exercise Price |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock that Have Not Vested |
| |
Market
Value of Shares or Units of Stock that Have Not Vested(1) |
| |||||||||||||||
Aaron LoCascio
Chief Executive Officer |
| | | | — | | | | | | 107,420 | | | | | $ | 3.95 | | | |
June 4, 2030
|
| | | | — | | | | | | — | | |
Adam Schoenfeld
Chief Strategy Officer |
| | | | — | | | | | | 107,420 | | | | | $ | 3.95 | | | |
June 4, 2030
|
| | | | — | | | | | | — | | |
William Mote
Chief Financial Officer |
| | | | 21,649 | | | | | | 64,950 | | | | | $ | 3.32 | | | |
August 10, 2030
|
| | | | 7,500(2) | | | | | $ | 29,700 | | |
Name and Principal Position
|
| |
Annual Base
|
| |
Annual Bonus
|
| |||
Aaron LoCascio
Chief Executive Officer |
| | | $ | 380,000 | | | |
No less than 30% of base salary unless
otherwise mutually agreed |
|
Adam Schoenfeld
Chief Strategy Officer |
| | | $ | 380,000 | | | |
No less than 30% of base salary unless
otherwise mutually agreed |
|
William Mote
Chief Financial Officer |
| | | $ | 320,000 | | | |
Up to 50% of base salary based upon
the attainment of one or more performance goals |
|
Plan Category
|
| |
Number of
Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
| |
Weighted
Average Exercise Price of Outstanding Options, Warrants and Rights |
| |
Number of Securities
Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) |
| |||||||||
Equity compensation plans approved by
stockholders |
| | | | 1,386,306 | | | | | $ | 5.29 | | | | | | 3,613,694 | | |
Equity compensation plans not approved by
stockholders |
| | | | 1,074,709(1) | | | | | | — | | | | | | — | | |
Total
|
| | | | 2,461,015 | | | | | | — | | | | | | 3,613,694 | | |
| | | | | |
| | | | Respectfully submitted, | |
| | | | The Audit Committee of the Board of Directors | |
| | | | Jeff Uttz (Chairman) | |
| | | | Neil Closner | |
| | | | Richard Taney | |
Name
|
| |
Age(1)
|
| |
Title
|
| |
Director Since
|
|
Aaron LoCascio
|
| |
36
|
| |
Chief Executive Officer and Chairman of the Board of Directors
|
| |
2018
|
|
Adam Schoenfeld
|
| |
37
|
| | Chief Strategy Officer and Director | | |
2018
|
|
Neil Closner | | |
47
|
| | Independent Director | | |
2019
|
|
Richard Taney | | |
65
|
| | Independent Director | | |
2019
|
|
Jeff Uttz | | |
52
|
| | Independent Director | | |
2019
|
|
Selected Company
|
| |
Market
Capitalization (in millions) |
| |
CY2020E/A
TEV/Revenue |
| |
CY2021E
TEV/Revenue |
| |
CY2022E
TEV/Revenue |
| |
CY2021E
TEV/EBITDA |
| |
CY2022E
TEV/EBITDA |
| ||||||||||||||||||
MariMed
|
| | | US$ | 258 | | | | | | 5.4x | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
TILT
|
| | | US$ | 199 | | | | | | 1.4x | | | | | | 1.1x | | | | | | 0.8x | | | | | | 7.3x | | | | | | 4.8x | | |
Cansortium
|
| | | US$ | 184 | | | | | | 3.5x | | | | | | 2.0x | | | | | | 1.3x | | | | | | 6.6x | | | | | | 3.3x | | |
BellRock Brands
|
| | | US$ | 117 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Slang Worldwide
|
| | | US$ | 143 | | | | | | 5.9x | | | | | | 2.8x | | | | | | 2.3x | | | | | | 17.2x | | | | | | 14.0x | | |
Harborside
|
| | | US$ | 129 | | | | | | 1.7x | | | | | | 1.5x | | | | | | 1.2x | | | | | | 9.6x | | | | | | 6.0x | | |
Flower One
|
| | | US$ | 85 | | | | | | 2.9x | | | | | | 1.4x | | | | | | 0.9x | | | | | | 5.0x | | | | | | 2.8x | | |
MJardin
|
| | | US$ | 9 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Core One Labs
|
| | | US$ | 95 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Golden Leaf
|
| | | US$ | 57 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
CV Sciences
|
| | | US$ | 48 | | | | | | 1.8x | | | | | | 1.8x | | | | | | 1.3x | | | | | | neg | | | | | | neg | | |
Plus Products
|
| | | US$ | 30 | | | | | | 2.4x | | | | | | 1.5x | | | | | | n/a | | | | | | 15.4x | | | | | | n/a | | |
1933 Industries
|
| | | US$ | 43 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Fiore Cannabis
|
| | | US$ | 16 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Maple Leaf Green
|
| | | US$ | 9 | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Greenlane(1) | | | | US$ | 191 | | | | | | 1.3x | | | | | | 1.0x | | | | | | 0.8x | | | | | | nmf | | | | | | 14.4x | | |
KushCo(1) | | | | US$ | 203 | | | | | | 1.7x | | | | | | 1.1x | | | | | | 0.8x | | | | | | 17.1x | | | | | | 8.7x | | |
Selected Company
|
| |
CY2022E/
CY2020E/A Revenue CAGR |
| |
CY2022E/
CY2021E Revenue Growth |
| |
CY2020E/A
EBITDA Margin |
| |
CY2021E
EBITDA Margin |
| |
CY2022E
EBITDA Margin |
| |||||||||||||||
MariMed
|
| | | | n/a | | | | | | n/a | | | | | | 33% | | | | | | n/a | | | | | | n/a | | |
TILT
|
| | | | 30% | | | | | | 32% | | | | | | 7% | | | | | | 15% | | | | | | 17% | | |
Cansortium
|
| | | | 60% | | | | | | 51% | | | | | | 22% | | | | | | 31% | | | | | | 41% | | |
BellRock Brands
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Slang Worldwide
|
| | | | 59% | | | | | | 20% | | | | | | neg | | | | | | 16% | | | | | | 17% | | |
Harborside
|
| | | | 16% | | | | | | 18% | | | | | | 8% | | | | | | 15% | | | | | | 21% | | |
Flower One
|
| | | | 77% | | | | | | 46% | | | | | | neg | | | | | | 27% | | | | | | 33% | | |
MJardin
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Core One Labs
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Golden Leaf
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
CV Sciences
|
| | | | 20% | | | | | | 44% | | | | | | neg | | | | | | neg | | | | | | neg | | |
Plus Products
|
| | | | n/a | | | | | | n/a | | | | | | neg | | | | | | 10% | | | | | | n/a | | |
1933 Industries
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Fiore Cannabis
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Maple Leaf Green
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | n/a | | |
Selected Company
|
| |
CY2022E/
CY2020E/A Revenue CAGR |
| |
CY2022E/
CY2021E Revenue Growth |
| |
CY2020E/A
EBITDA Margin |
| |
CY2021E
EBITDA Margin |
| |
CY2022E
EBITDA Margin |
| |||||||||||||||
Greenlane(1) | | | | | 28% | | | | | | 29% | | | | | | neg | | | | | | 0% | | | | | | 6% | | |
KushCo(1) | | | | | 44% | | | | | | 32% | | | | | | neg | | | | | | 6% | | | | | | 9% | | |
Selected Company
|
| |
Market
Capitalization (in millions) |
| |
CY2020E/A
TEV/Revenue |
| |
CY2021E
TEV/Revenue |
| |
CY2022E
TEV/Revenue |
| |
CY2021E
TEV/EBITDA |
| |
CY2022E
TEV/EBITDA |
| ||||||||||||||||||
Turning Point Brands, Inc.
|
| | | US$ | 1,293 | | | | | | 3.2x | | | | | | 3.1x | | | | | | 2.9x | | | | | | 12.5x | | | | | | 11.5x | | |
Charlotte’s Web Holdings Inc.
|
| | | US$ | 636 | | | | | | 5.9x | | | | | | 4.3x | | | | | | 3.1x | | | | | | n/a | | | | | | 33.3x | | |
High Tide Inc.
|
| | | US$ | 537 | | | | | | 6.6x | | | | | | 3.5x | | | | | | 2.6x | | | | | | 24.5x | | | | | | 12.8x | | |
Fire & Flower Holdings Corp.
|
| | | US$ | 311 | | | | | | 3.6x | | | | | | 1.9x | | | | | | 1.3x | | | | | | 40.6x | | | | | | 13.5x | | |
cbdMD, Inc.
|
| | | US$ | 211 | | | | | | 4.9x | | | | | | 4.0x | | | | | | 3.4x | | | | | | neg | | | | | | n/a | | |
Slang Worldwide Inc.
|
| | | US$ | 143 | | | | | | 4.7x | | | | | | 2.3x | | | | | | 1.9x | | | | | | 13.9x | | | | | | 11.3x | | |
Plus Products Inc.
|
| | | US$ | 30 | | | | | | 3.0x | | | | | | 1.9x | | | | | | n/a | | | | | | 19.6x | | | | | | n/a | | |
CV Sciences, Inc.
|
| | | US$ | 48 | | | | | | 1.8x | | | | | | 1.8x | | | | | | 1.3x | | | | | | neg | | | | | | neg | | |
Namaste Technologies
Inc. |
| | | US$ | 98 | | | | | | 2.1x | | | | | | 1.4x | | | | | | n/a | | | | | | neg | | | | | | n/a | | |
Greenlane(1) | | | | US$ | 191 | | | | | | 1.3x | | | | | | 1.0x | | | | | | 0.8x | | | | | | nmf | | | | | | 14.4x | | |
KushCo(1) | | | | US$ | 203 | | | | | | 1.7x | | | | | | 1.1x | | | | | | 0.8x | | | | | | 17.1x | | | | | | 8.7x | | |
Selected Company
|
| |
CY2022E/
CY2020E/A Revenue CAGR |
| |
CY2022E/
CY2021E Revenue Growth |
| |
CY2020E/A
EBITDA Margin |
| |
CY2021E
EBITDA Margin |
| |
CY2022E
EBITDA Margin |
| |||||||||||||||
Turning Point Brands, Inc.
|
| | | | 5% | | | | | | 5% | | | | | | 18% | | | | | | 24% | | | | | | 25% | | |
Charlotte’s Web Holdings Inc.
|
| | | | 38% | | | | | | 39% | | | | | | neg | | | | | | 1% | | | | | | 9% | | |
High Tide Inc.
|
| | | | 60% | | | | | | 36% | | | | | | 11% | | | | | | 14% | | | | | | 20% | | |
Fire & Flower Holdings Corp.
|
| | | | 69% | | | | | | 55% | | | | | | neg | | | | | | 5% | | | | | | 9% | | |
cbdMD, Inc.
|
| | | | 21% | | | | | | 18% | | | | | | neg | | | | | | neg | | | | | | 2% | | |
Slang Worldwide Inc.
|
| | | | 59% | | | | | | 20% | | | | | | neg | | | | | | 16% | | | | | | 17% | | |
Plus Products Inc.
|
| | | | n/a | | | | | | n/a | | | | | | neg | | | | | | 10% | | | | | | n/a | | |
CV Sciences, Inc.
|
| | | | 20% | | | | | | 44% | | | | | | neg | | | | | | neg | | | | | | neg | | |
Namaste Technologies Inc.
|
| | | | n/a | | | | | | n/a | | | | | | n/a | | | | | | neg | | | | | | n/a | | |
Greenlane(1) | | | | | 28% | | | | | | 29% | | | | | | neg | | | | | | 0% | | | | | | 6% | | |
KushCo(1) | | | | | 44% | | | | | | 32% | | | | | | neg | | | | | | 6% | | | | | | 9% | | |
Selected Company
|
| |
Market
Capitalization (in millions) |
| |
CY2020E/A
TEV/Revenue |
| |
CY2021E
TEV/Revenue |
| |
CY2022E
TEV/Revenue |
| |
CY2021E
TEV/EBITDA |
| |
CY2022E
TEV/EBITDA |
| |||||||||||||||
International Paper Company
|
| |
US$21,750
|
| | | | 1.3x | | | | | | 1.3x | | | | | | 1.3x | | | | | | 8.0x | | | | | | 7.4x | | |
WestRock Company
|
| |
US$14,357
|
| | | | 1.3x | | | | | | 1.2x | | | | | | 1.2x | | | | | | 7.2x | | | | | | 6.8x | | |
Crown Holdings, Inc.
|
| |
US$13,533
|
| | | | 1.8x | | | | | | 1.7x | | | | | | 1.6x | | | | | | 10.6x | | | | | | 10.0x | | |
Berry Global Group, Inc.
|
| |
US$8,610
|
| | | | 1.5x | | | | | | 1.5x | | | | | | 1.4x | | | | | | 8.3x | | | | | | 8.0x | | |
Packaging Corporation of America
|
| |
US$13,021
|
| | | | 2.2x | | | | | | 2.1x | | | | | | 2.1x | | | | | | 10.9x | | | | | | 10.4x | | |
Ardagh Group S.A.
|
| |
US$5,943
|
| | | | 1.7x | | | | | | 1.6x | | | | | | 1.5x | | | | | | 8.7x | | | | | | 7.9x | | |
Sealed Air Corporation
|
| |
US$7,423
|
| | | | 2.2x | | | | | | 2.1x | | | | | | 2.0x | | | | | | 9.7x | | | | | | 9.3x | | |
Graphic Packaging Holding Company
|
| |
US$5,019
|
| | | | 1.4x | | | | | | 1.3x | | | | | | 1.3x | | | | | | 8.3x | | | | | | 7.9x | | |
Silgan Holdings Inc.
|
| |
US$4,860
|
| | | | 1.6x | | | | | | 1.5x | | | | | | 1.5x | | | | | | 9.6x | | | | | | 9.4x | | |
Sonoco Products Company
|
| |
US$6,491
|
| | | | 1.5x | | | | | | 1.5x | | | | | | 1.5x | | | | | | 10.1x | | | | | | 9.8x | | |
O-I Glass, Inc.
|
| |
US$2,400
|
| | | | 1.0x | | | | | | 1.0x | | | | | | 1.0x | | | | | | 5.9x | | | | | | 5.7x | | |
UFP Technologies, Inc.
|
| |
US$383
|
| | | | 2.0x | | | | | | 1.8x | | | | | | 1.7x | | | | | | n/a | | | | | | n/a | | |
Greenlane(1) | | |
US$191
|
| | | | 1.3x | | | | | | 1.0x | | | | | | 0.8x | | | | | | nmf | | | | | | 14.4x | | |
KushCo(1) | | |
US$203
|
| | | | 1.7x | | | | | | 1.1x | | | | | | 0.8x | | | | | | 17.1x | | | | | | 8.7x | | |
Selected Company
|
| |
CY2022E/
CY2020E/A Revenue CAGR |
| |
CY2022E/
CY2021E Revenue Growth |
| |
CY2020E/A
EBITDA Margin |
| |
CY2021E
EBITDA Margin |
| |
CY2022E
EBITDA Margin |
| |||||||||||||||
International Paper Company
|
| | | | 3% | | | | | | 1% | | | | | | 14% | | | | | | 16% | | | | | | 17% | | |
WestRock Company
|
| | | | 4% | | | | | | 2% | | | | | | 16% | | | | | | 17% | | | | | | 18% | | |
Crown Holdings, Inc.
|
| | | | 7% | | | | | | 4% | | | | | | 15% | | | | | | 16% | | | | | | 16% | | |
Berry Global Group, Inc.
|
| | | | 3% | | | | | | 2% | | | | | | 18% | | | | | | 18% | | | | | | 18% | | |
Packaging Corporation of America
|
| | | | 3% | | | | | | 1% | | | | | | 19% | | | | | | 19% | | | | | | 20% | | |
Ardagh Group S.A.
|
| | | | 6% | | | | | | 6% | | | | | | 17% | | | | | | 18% | | | | | | 19% | | |
Sealed Air Corporation
|
| | | | 4% | | | | | | 3% | | | | | | 20% | | | | | | 21% | | | | | | 22% | | |
Graphic Packaging Holding Company
|
| | | | 3% | | | | | | 2% | | | | | | 14% | | | | | | 16% | | | | | | 17% | | |
Silgan Holdings Inc.
|
| | | | 5% | | | | | | 2% | | | | | | 16% | | | | | | 16% | | | | | | 16% | | |
Sonoco Products Company
|
| | | | 1% | | | | | | 2% | | | | | | 14% | | | | | | 15% | | | | | | 15% | | |
O-I Glass, Inc.
|
| | | | 1% | | | | | | 2% | | | | | | 14% | | | | | | 17% | | | | | | 18% | | |
UFP Technologies, Inc.
|
| | | | 8% | | | | | | 7% | | | | | | 14% | | | | | | n/a | | | | | | n/a | | |
Greenlane(1) | | | | | 28% | | | | | | 29% | | | | | | neg | | | | | | 0% | | | | | | 6% | | |
KushCo(1) | | | | | 44% | | | | | | 32% | | | | | | neg | | | | | | 6% | | | | | | 9% | | |
Selected Company
|
| |
Market
Capitalization (in millions) |
| |
CY2020E/A
TEV/Revenue |
| |
CY2021E
TEV/Revenue |
| |
CY2022E
TEV/Revenue |
| |
CY2021E
TEV/EBITDA |
| |
CY2022E
TEV/EBITDA |
| ||||||||||||||||||
Sysco Corporation
|
| | | US$ | 41,047 | | | | | | 1.1x | | | | | | 0.9x | | | | | | 0.8x | | | | | | 16.9x | | | | | | 13.0x | | |
US Foods Holding Corp.
|
| | | US$ | 8,383 | | | | | | 0.6x | | | | | | 0.5x | | | | | | 0.5x | | | | | | 13.0x | | | | | | 10.2x | | |
Performance Food Group Company
|
| | | US$ | 7,479 | | | | | | 0.4x | | | | | | 0.3x | | | | | | 0.3x | | | | | | 15.5x | | | | | | 12.2x | | |
United Natural Foods, Inc.
|
| | | US$ | 2,019 | | | | | | 0.2x | | | | | | 0.2x | | | | | | 0.2x | | | | | | 8.1x | | | | | | 7.8x | | |
Core-Mark Holding Company, Inc.
|
| | | US$ | 1,763 | | | | | | 0.2x | | | | | | 0.1x | | | | | | 0.1x | | | | | | 11.3x | | | | | | 10.5x | | |
The Chefs’ Warehouse, Inc.
|
| | | US$ | 1,109 | | | | | | 1.4x | | | | | | 1.1x | | | | | | 0.9x | | | | | | 35.6x | | | | | | 17.3x | | |
Greenlane(1) | | | | US$ | 191 | | | | | | 1.3x | | | | | | 1.0x | | | | | | 0.8x | | | | | | nmf | | | | | | 14.4x | | |
KushCo(1) | | | | US$ | 203 | | | | | | 1.7x | | | | | | 1.1x | | | | | | 0.8x | | | | | | 17.1x | | | | | | 8.7x | | |
Selected Company
|
| |
CY2022E/
CY2020E/A Revenue CAGR |
| |
CY2022E/
CY2021E Revenue Growth |
| |
CY2020E/A
EBITDA Margin |
| |
CY2021E
EBITDA Margin |
| |
CY2022E
EBITDA Margin |
| |||||||||||||||
Sysco Corporation
|
| | | | 15% | | | | | | 11% | | | | | | 3% | | | | | | 5% | | | | | | 6% | | |
US Foods Holding Corp.
|
| | | | 12% | | | | | | 9% | | | | | | 2% | | | | | | 4% | | | | | | 5% | | |
Performance Food Group Company
|
| | | | 11% | | | | | | 9% | | | | | | 2% | | | | | | 2% | | | | | | 3% | | |
United Natural Foods, Inc.
|
| | | | 1% | | | | | | 2% | | | | | | 3% | | | | | | 3% | | | | | | 3% | | |
Core-Mark Holding Company, Inc.
|
| | | | 14% | | | | | | 2% | | | | | | 1% | | | | | | 1% | | | | | | 1% | | |
The Chefs’ Warehouse, Inc.
|
| | | | 22% | | | | | | 19% | | | | | | neg | | | | | | 3% | | | | | | 5% | | |
Greenlane(1) | | | | | 28% | | | | | | 29% | | | | | | neg | | | | | | 0% | | | | | | 6% | | |
KushCo(1) | | | | | 44% | | | | | | 32% | | | | | | neg | | | | | | 6% | | | | | | 9% | | |
Financial Statistic
|
| |
Multiple Range
|
| |
Implied Price per Share of
Greenlane Class A Stock |
|
CY2020E/A TEV/Revenue
|
| |
1.20x – 1.80x
|
| |
$3.99 – $5.92
|
|
CY2021E TEV/Revenue
|
| |
1.00x – 1.50x
|
| |
$4.24 – $6.29
|
|
CY2022E TEV/Revenue
|
| |
0.80x – 1.30x
|
| |
$4.36 – $7.00
|
|
CY2022E TEV/EBITDA
|
| |
12.00x – 20.00x
|
| |
$3.71 – $6.11
|
|
Financial Statistic
|
| |
Multiple Range
|
| |
Implied Price per
KushCo Share of Common Stock |
|
CY2020E/A TEV/Revenue
|
| |
1.50x – 2.30x
|
| |
$1.12 – $1.67
|
|
CY2021E TEV/Revenue
|
| |
1.00x – 1.50x
|
| |
$1.16 – $1.70
|
|
CY2022E TEV/Revenue
|
| |
0.80x – 1.30x
|
| |
$1.22 – $1.93
|
|
CY2021E TEV/EBITDA
|
| |
15.00x – 25.00x
|
| |
$1.09 – $1.77
|
|
CY2022E TEV/EBITDA
|
| |
8.00x – 12.00x
|
| |
$1.15 – $1.69
|
|
Time Period
|
| |
Exchange Ratio
|
| |||
Spot
|
| | | | 0.2793 | | |
1-Month Average
|
| | | | 0.2462 | | |
6-Month Average
|
| | | | 0.2480 | | |
|
Implied Exchange Ratio Reference Ranges Based on:
|
| | | | |||
|
CY2021E Revenue
|
| |
CY2022E Revenue
|
| |
Exchange Ratio
|
|
|
0.1543x – 0.4046x
|
| |
0.1341x – 0.4940x
|
| |
0.2546x
|
|
|
Implied Exchange Ratio Reference Range
|
| |
Exchange Ratio
|
| |||
|
0.1456x – 0.5430x
|
| | | | 0.2546x | | |
(in millions)
|
| |
Year Ending December 31,
|
| |||||||||||||||||||||||||||
|
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
| |||||||||||||||||
Net revenue
|
| | | $ | 177 | | | | | $ | 227 | | | | | $ | 270 | | | | | $ | 315 | | | | | $ | 366 | | |
Adjusted EBITDA(1)
|
| | | | 1 | | | | | | 13 | | | | | | 21 | | | | | | 30 | | | | | | 41 | | |
Unlevered net income(2)
|
| | | | (2) | | | | | | 10 | | | | | | 16 | | | | | | 24 | | | | | | 34 | | |
Unlevered free cash flow(3)(4)
|
| | | | (5) | | | | | | 4 | | | | | | 9 | | | | | | 18 | | | | | | 27 | | |
(in millions)
|
| |
H2 – 2021E
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
| ||||||||||||||||||
Revenue
|
| | | $ | 105.3 | | | | | $ | 177.5 | | | | | $ | 234.3 | | | | | $ | 308.1 | | | | | $ | 367.1 | | | | | $ | 429.4 | | |
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)
|
| | | | 8.5 | | | | | | 11.1 | | | | | | 22.0 | | | | | | 34.7 | | | | | | 44.9 | | | | | | 54.7 | | |
Net Operating Profit After Tax (NOPAT)(1)
|
| | | | 1.7 | | | | | | (1.3) | | | | | | 6.7 | | | | | | 16.7 | | | | | | 24.5 | | | | | | 30.3 | | |
Unlevered Free Cash Flow (Unlevered FCF)(1)
|
| | | | (15.3) | | | | | | (15.3) | | | | | | 3.6 | | | | | | 0.5 | | | | | | 8.3 | | | | | | 11.8 | | |
| | |
Greenlane Options
|
| |
Greenlane Restricted Stock
|
| |
Total
Value of Accelerated Awards |
| | |||||||||||||||||||||||
Name
|
| |
Options
|
| |
Value(1)
|
| |
Shares
|
| |
Value(2)
|
| | | | ||||||||||||||||||
Aaron LoCascio
|
| | | | 144,979 | | | | | $ | 514,367 | | | | | | 30,263 | | | | | $ | 172,802 | | | | | $ | 687,189 | | | | ||
Chief Executive Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Adam Schoenfeld
|
| | | | 144,979 | | | | | $ | 514,367 | | | | | | 30,263 | | | | | $ | 172,802 | | | | | $ | 687,189 | | | | ||
Chief Strategy Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
William Mote
|
| | | | 90,336 | | | | | $ | 284,999 | | | | | | 20,456 | | | | | $ | 116,804 | | | | | $ | 569,998 | | | | ||
Chief Financial Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
| |
KushCo options
|
| |
KushCo RSUs
|
| |
Total
Value of Accelerated Awards |
| |||||||||||||||||||||
|
Shares
|
| |
Value(1)
|
| |
Shares
|
| |
Value(2)
|
| ||||||||||||||||||||
Nicholas Kovacevich
Chairman of the Board and Chief Financial Officer |
| | | | 88,889 | | | | | $ | 2,611 | | | | | | 328,037 | | | | | $ | 344,439 | | | | | $ | 347,050 | | |
Stephen Christoffersen
Chief Financial Officer |
| | | | 61,111 | | | | | $ | 9,139 | | | | | | 48,576 | | | | | $ | 51,004 | | | | | $ | 60,143 | | |
Rodrigo de Oliveira
Chief Operating Officer |
| | | | 51,191 | | | | | $ | 4,476 | | | | | | 159,466 | | | | | $ | 167,439 | | | | | $ | 171,915 | | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
Corporate Governance
|
| | Greenlane is a Delaware corporation. The rights of Greenlane stockholders are governed by the DGCL, the Greenlane charter and the Greenlane bylaws. | | | KushCo is a Nevada corporation. The rights of KushCo stockholders are governed by the NRS, KushCo’s charter and KushCo’s bylaws. | |
Authorized Capital Stock
|
| | Under the Greenlane A&R Charter, Greenlane will be authorized to issue an aggregate of 640 million shares of capital stock, consisting of: (1) 600 million shares of Class A common stock, $0.01 par value per share; (2) 30 million shares of Class B common stock, $0.0001 par value per share; and (3) 10 million shares of preferred stock, $0.0001 par value per share. | | | Under KushCo’s amended and restated Articles of Incorporation (the “KushCo A&R Charter”), KushCo is authorized to issue an aggregate of 275 million shares of capital stock, consisting of (1) 265 million shares of KushCo common stock and (2) 10 million shares of KushCo’s preferred stock, $0.001 par value per share (“KushCo preferred stock”). | |
| | | Following the completion of the Mergers, 57,830,672 shares of Greenlane Class A common stock are expected to be issued and outstanding and 25,870,038 shares of Greenlane Class B common stock are expected to be issued and outstanding and 0 shares of Greenlane’s preferred stock are expected to be issued and outstanding. Greenlane Class C common stock will be eliminated in the Greenlane A&R | | | | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | Charter in connection with the conversion of Greenlane Class C common to Greenlane Class B common stock. | | | | |
Preferred Stock
|
| | Greenlane’s charter states that the Greenlane Board is authorized to issue preferred stock in one or more classes or series and may fix by resolution the number of shares of any such series and the voting powers, designations, preferences, limitations, restrictions and relative rights thereof by resolution, including, without limitation, the authority to fix the dividend rights, dividend rates, conversion rights, exchange rights, voting rights, rights and terms of redemption, the redemption price or prices, the dissolution preferences and the rights in respect of any distributions of assets. | | | KushCo’s charter states that the KushCo Board is authorized to issue preferred stock in one or more series and may fix the voting powers, designations, preferences, limitations, restrictions and relative rights thereof by resolution. | |
Voting Rights
|
| | Greenlane’s charter states that each holder of Class A common stock or Class B common stock is entitled to one vote for each such share of stock entitled to vote held of record by such stockholder on the applicable record date. | | | KushCo’s bylaws state that each KushCo stockholder is entitled to one vote for each share of stock entitled to vote held of record by such stockholder. | |
Dividends
|
| | Dividends on the Class A common stock may be declared by the Greenlane Board. Greenlane’s charter prohibits the declaration of dividends on Class B common stock. The time and amount of dividends are dependent upon Greenlane’s financial condition, operations, cash requirements and availability, debt repayment obligations, capital expenditure needs and restrictions in Greenlane’s debt instruments, industry trends, the provisions of Delaware law affecting the payment of dividends to stockholders and any other factors the Greenlane Board may consider relevant. | | | Declaration and payment of any dividend is subject to the discretion of the KushCo Board. Dividends may be paid in cash, in property, or in shares of KushCo capital stock. | |
Board of Directors
|
| | Currently, there are five members of the Greenlane Board. | | | Currently, there are five members of the KushCo Board. | |
| | | Immediately following the effective time of the Mergers, the Combined Company Board will be increased from five to seven directors, four of whom | | | A majority of the directors on the KushCo Board must be independent directors within the meaning of the listing standards of Nasdaq. | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | |
will be current members of the Greenlane Board and three of whom will be current members of the KushCo Board.
Under the listing standards of Nasdaq, a majority of the directors on the Combined Company Board must be independent directors. Upon completion of the Mergers, Greenlane expects that at least four of the seven directors on the Combined Company Board will be independent directors within the meaning of the listing standards of Nasdaq.
|
| | | |
| | | The Greenlane Board is not classified. | | | The KushCo Board is not classified. | |
| | | The directors of Greenlane hold office for a term expiring at the next succeeding annual meeting of stockholders and until their successors are duly elected and qualified or until their earlier death, resignation or removal. | | | The directors of the KushCo Board hold office for a term expiring at the next succeeding annual meeting of stockholders and until their successors are duly elected and qualified. | |
Removal of Directors; Vacancies
|
| |
Under the Greenlane charter, the entire Greenlane Board may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority of the voting power of the issued and outstanding stock entitled to vote at an annual or special meeting duly noticed and called.
Unless the Greenlane Board otherwise determines, any vacancies on the Greenlane Board, whether resulting from an increase in the authorized number of directors or any vacancies resulting from death, retirement, disqualification or other cause, may only be filled by a majority vote of the directors then in office, through less than a quorum or by the sole remaining director. Directors so chosen shall hold office until the next annual meeting of stockholders. No decrease in the size of the Greenlane Board shall shorten the term of any director.
|
| | Under the KushCo bylaws, the entire KushCo Board may be removed from office at any time, with or without cause, by the affirmative vote of a majority of the outstanding stock entitled to vote. Any vacancies on the KushCo Board, whether resulting from an increase in the authorized number of directors or any vacancies resulting from death, resignation or removal, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by directors, but any such election by written consent requires the consent of a majority of the outstanding shares entitled to vote. | |
Stockholder Action by Written Consent
|
| | Greenlane’s bylaws do not permit its stockholders to take action by written consent. Any action required or permitted to be taken by the stockholders of Greenlane must be | | | KushCo’s bylaws permit its stockholders to take action by written consent. Such consent must be signed by the holders of the outstanding shares having not less than the | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | effected at a duly called annual or special meeting. | | | minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. | |
Notice of Stockholder Meetings
|
| | Written notice of each stockholder meeting must be given not less than 10 nor more than 60 days before the date on which the meeting is to be held to each stockholder entitled to vote at such meeting. Such written notice must state the place, date and hour of the meeting and, if such notice is in respect of a special meeting, it must also state the purpose or purposes for which the meeting is called. | | | Written notice of each stockholder meeting must be given to each stockholder not less than 10 nor more than 60 days before the date of which the meeting is to be held. | |
Quorum
|
| | Greenlane’s bylaws provide that the holders of a majority of the shares of capital stock entitled to vote at the meeting, present in person or represented by proxy, constitutes a quorum at any stockholder meeting. | | | KushCo’s bylaws provide that the holders of a majority of the shares entitled to vote at any meeting of stockholders constitutes a quorum | |
Stockholder Proposal of Business or Nominations for Directors
|
| |
Greenlane’s bylaws provide that Greenlane must receive written notice of any stockholder proposal, including the nomination of persons for election as directors, for business at an annual meeting of stockholders not less than 120 calendar days in advance of the first anniversary of the date that the previous year’s proxy statement was released. If an annual meeting was not held in the previous year or the date of the annual meeting is more than 30 calendar days earlier than the date contemplated at the time of the previous year’s proxy statement, notice by the stockholder will be timely if received by Greenlane not later than the close of business on the 10th day following the day on which the annual meeting is publicly announced.
In addition to the timeliness requirements described above, a Greenlane stockholder’s written notice proposing business at an annual meeting must include: (i) a brief description of the business to be brought before the meeting, (ii) the name and address, as they appear on
|
| |
KushCo’s bylaws provide that KushCo must receive written notice of any stockholder proposal for business at an annual meeting of the stockholders not less than 120 calendar days in advance of the first anniversary of the date that the previous year’s annual meeting washeld. If an annual meeting was not held in the previous year or the date of the annual meeting is more than 30 calendar days earlier than the date contemplated at the time of the previous year’s meeting, notice by the stockholder will be timely if received by KushCo on the later of the 90th day prior to the annual meeting and the close of business on the 10th day following the day on which the annual meeting is publicly announced.
KushCo’s bylaws also provide that KushCo must receive written notice of any stockholder direct or nomination for a meeting of stockholders not later than 120 calendar days in advance of the first anniversary of the date that the previous year’s annual meeting was held. If an annual meeting was not held in the previous year or the dateof the
|
|
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | |
Greenlane’s books, of the stockholder proposing such business and any other Proposing Person, (iii) a representation that the stockholder is a holder of record of Greenlane stock entitled to vote at the meeting on the date of such notice and intends to appear in person or by proxy at the meeting to propose the business specified in the notice; (iv) any material interest of the stockholder and any other Proposing Person in such business, (v) certain information regarding the ownership interests of the stockholder and any other Proposing Person, supplemented in writing by the stockholder not later than 10 days after the record date for voting at the meeting to disclose such interests, including the class of Greenlane shares beneficially owned, any options, warrants or other forms of derivative securities owned with regard to the stockholder’s Greenlane shares, and any voting agreements or similar arrangements entered into by the stockholder with regard to Greenlane shares, among other relevant information. Lastly, (vi) any Greenlane stockholder’s written notice must also include any other information relating to such stockholder or other Proposing Person, if any, which would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act.
Greenlane’s bylaws also provide that any stockholder entitled to vote in the election of directors generally may also nominate one or more persons for election as directors at an annual meeting if timely notice of such stockholder’s intent to make such nomination or nominations is given in writing to the Greenlane Secretary. To be considered timely, a stockholder nomination for a director to be elected at an annual meeting must be received
|
| | annual meeting is more than 30 calendar days earlier than the date contemplated at the time of the previous year’s meeting, notice by the stockholder will be timely if received by KushCo on the later of the 90th day prior to the annual meeting and the close of business on the 10th day following the day on which the annual meeting is publicly announced. | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | at the Greenlane principal executive offices not more than 120 calendar days in advance of the first anniversary of the date that Greenlane’s proxy statement was released to stockholders in connection with the previous year’s annual meeting of stockholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 calendar days from the date contemplated at the time of the previous year’s proxy statement, notice must be received by Greenlane not later than the close of business on the 10th day following the day on which the public announcement of such meeting is first made. Each such notice shall set forth (i) the name and address, as they appear on Greenlane’s books, of the stockholder who intends to make the nomination and of any other Nominating Person, (ii) a representation that the stockholder is a holder of record of Greenlane stock entitled to vote for the election of directors on the date of such notice and intends to appear in person or by proxy at the meeting to make the nomination, (iii) certain information regarding the ownership interests of the stockholder and any other Proposing Person, supplemented in writing by the stockholder not later than 10 days after the record date for voting at the meeting to disclose such interests, including the class of Greenlane shares beneficially owned, any options, warrants or other forms of derivative securities owned with regard to the stockholder’s Greenlane shares, and any voting agreements or similar arrangements entered into by the stockholder with regard to Greenlane shares, among other relevant information. In addition, a stockholder seeking to make a nomination or nominations for the election of directors must also include in their notice: (iv) a description of all arrangements or understandings between the stockholder or other | | | | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | Nominating Person and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (v) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past 3 years and any other material relationships, between or among such stockholder and any other Nominating Person and each proposed nominee and his respective affiliates and associates or others working in concert therewith, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 of Regulation S-K, (vi) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, had the nominee been nominated or intended to be nominated, by the Board of Directors and (vii) the consent of each nominee to serve as a director of Greenlane if so elected. | | | | |
Amendment of Governing Documents
|
| |
Each of the Greenlane Board and the Greenlane stockholders have the power to alter, amend or repeal any provision of the Greenlane bylaws and to adopt new bylaws.
The Greenlane Board may alter, amend or repeal any provision of the Greenlane bylaws and adopt new bylaws by an affirmative vote of a majority of the directors present at any regular or special meeting of the Greenlane Board at which a quorum is present.
The Greenlane stockholders may alter, amend or repeal any provision of the Greenlane bylaws and adopt new bylaws by an affirmative vote of the holders of a majority of the shares of the capital stock of Greenlane issued and outstanding and entitled to vote at any annual meeting of stockholders, or
|
| |
Both the KushCo board and the KushCo stockholders have the power to alter, amend or repeal any provision of KushCo’s bylaws and to adopt new bylaws.
The KushCo Board may alter, amend or repeal any provision of KushCo’s bylaws and adopt new bylaws by a majority vote of the directors present at any regular or special meeting of the KushCo Board at which a quorum is present.
The KushCo stockholders may alter, amend or repeal any portion of KushCo’s bylaws and adopt new bylaws by a majority vote of the KushCo stockholders present at any regular or special meeting of the KushCo stockholders at which a quorum is present.
|
|
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | at any special meeting of stockholders, provided notice of such alteration, amendment, repeal or adoption of new bylaws shall have been stated in the notice of such special meeting. Under the DGCL, an amendment to a corporation’s certificate of incorporation generally requires (i) a board of directors resolution declaring the advisability of the amendment and (ii) the approval of the holders of a majority of the outstanding stock entitled to vote upon the proposed amendment, unless the certificate of incorporation requires a greater vote. If the proposed amendment would increase or decrease the aggregate number of authorized shares of a class of stock, increase or decrease the par value of the shares of such class or change the powers, preferences or special rights of the shares so as to affect them adversely, the holders of a majority of the outstanding shares of such class shall be entitled to vote as a class upon the proposed amendment. If an amendment would alter or change the powers, preferences or special rights of one or more series of any class so as to affect them adversely, but shall not so affect the entire class, then only the shares of the series so affected by the amendment shall be considered a separate class for purposes of the vote. Greenlane’s charter provides that Greenlane reserves the right to amend, alter, change or repeal any provision contained in the charter in the manner prescribed by statute, and all rights conferred upon stockholders in the Charter are granted subject to such reservation. Greenlane’s charter further provides that the affirmative vote of the holders of Greenlane common stock and Greenlane preferred stock then outstanding representing two-thirds or more of the votes eligible to be cast in an election of directors is required to amend Article IX (Stockholder Action Without Meeting). In addition, Greenlane’s charter provides that the authorized | | | | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | number of shares of Greenlane Class A common stock, Greenlane Class B common stock or Greenlane preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of holders of a majority of the voting power of all of the outstanding shares of stock of Greenlane entitled to vote thereon, without any separate class vote. | | | | |
Certain Business Combinations
|
| | Greenlane is governed by Section 203 of the DGCL. Section 203 of the DGCL prohibits a Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time that such stockholder became an interested stockholder, unless, (i) prior to the time such stockholder becomes an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, such stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (subject to certain exclusions) or (iii) at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. Under Section 203 of the DGCL, “interested stockholder” is generally defined as any person (other than the corporation and any direct or indirect majority-owned subsidiaries of the corporation) that (a) is the owner of 15% or more of the outstanding voting stock of the corporation or (b) is an affiliate or an | | | KushCo’s bylaws contain a provision electing not to be governed by sections 78.411 to 78.444 of the NRS regarding combinations with interested stockholders. | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person, subject to certain exceptions. Under Section 203 of the DGCL, “business combination” means, among other things, (i) a merger or consolidation with an interested stockholder, (ii) a sale, exchange or other disposition to or with an interested stockholder of 10% or more of the aggregate market value of either the assets on a consolidated basis or the outstanding stock of the corporation and (iii) any receipt by an interested stockholder of financial benefits (except proportionately as a stockholder) by or through the corporation other than those expressly permitted by Delaware law. The DGCL allows a corporation to include in its certificate of incorporation a provision expressly electing not to be governed by Section 203. Because Greenlane’s charter does not contain a provision electing not to be governed by Section 203 of the DGCL, Greenlane is subject to such provision. | | | | |
Limitation of Stockholder
Liability |
| | Under Delaware law, stockholders generally are not liable for a corporation’s debts or obligations. | | | Under Nevada law, stockholders generally are not liable for a corporation’s debts or obligations. | |
Exculpation and Indemnification of Directors and Officers
|
| | The DGCL permits corporations to adopt provisions in its certificate of incorporation limiting or eliminating certain personal liability of directors to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. However, a corporation may not limit or eliminate the liability of a director for (i) breaching the duty of loyalty to the corporation or the corporation’s stockholders; (ii) acts or omissions that are not in good faith or that involve intentional misconduct or a knowing | | | The KushCo charter contains a provision that eliminates directors’ and officers’ liability to KushCo or its stockholders for money damages to the maximum extent permitted under Nevada law. KushCo’s charter authorizes KushCo, and KushCo’s bylaws obligate KushCo, to the maximum extent permitted by Nevada law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | violation of law; (iii) any transaction in which a director derived an improper personal benefit; or (iv) paying an unlawful dividend or approving an unlawful stock repurchase. Greenlane’s charter eliminates the personal liability of directors for monetary damages for breach of fiduciary duty as a director to the extent permitted by the DGCL. The Greenlane bylaws obligate Greenlane, to the maximum extent permitted by Delaware law in effect from time to time, to indemnify and, upon the receipt of an undertaking to repay all amounts advanced if it determined that such person is not entitled to indemnification, advance expenses in advance of final disposition of such a proceeding to (a) any individual who is a present or former director or officer of Greenlane and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of Greenlane and at the request of Greenlane, serves or has served as a director, officer, or a controlling person of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in that capacity. The Greenlane bylaws also permit Greenlane to indemnify and advance expenses to any individual to any employee or agent of Greenlane or Greenlane’s predecessor. | | | reasonable expenses in advance of final disposition of such a proceeding to (a) any individual who is a present or former director or officer of KushCo and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a director or officer of KushCo and at the request of KushCo, serves or has served as a director, officer, partner, trustee, member or manager of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in that capacity. KushCo’s charter and bylaws also permit KushCo to indemnify and advance expenses to any individual who served KushCo’s predecessor in any of the capacities described above and to any employee or agent of KushCo or KushCo’s predecessor. | |
Forum Selection
|
| | Greenlane’s charter provides that, unless Greenlane consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery of the State of Delaware does not have jurisdiction, any state or federal court located within the State of Delaware) will, to the | | | KushCo’s bylaws and charter do not include a forum selection provision. | |
| | |
Rights of Greenlane Stockholders
Following the Mergers (which will be the rights of stockholders of the Combined Company following the Mergers) |
| |
Rights of KushCo Stockholders
|
|
| | | fullest extent permitted by law, be the sole and exclusive forum for any derivative action brought on behalf of Greenlane, action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee or agent of Greenlane to Greenlane or its stockholders, action asserting a claim arising pursuant to, or seeking to enforce or determine the validity any right, obligation or remedy under, the DGCL, Greenlane’s charter or bylaws, action to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or action asserting a claim governed by the internal affairs doctrine. Greenlane’s charter also provides that, unless Greenlane consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising out of the Securities Act. The foregoing does not apply to any suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United State have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in Greenlane capital stock is deemed to have received notice of and consented to the foregoing forum selection clause, which could limit Greenlane stockholders’ ability to choose the judicial forum for disputes with Greenlane. The enforceability of similar forum clauses in other companies’ bylaws or similar governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection clause contained in Greenlane’s charter to be inapplicable or unenforceable in such action. | | | | |
Name
|
| |
Number of
Shares of Greenlane Class A Common Stock Beneficially Owned |
| |
% of All
Greenlane Class A Common Stock Shares(1) |
| |
Number of
Shares of Greenlane Class B Common Stock Beneficially Owned |
| |
% of All
Greenlane Class B Common Stock Shares(2) |
| |
Number of
Shares of Greenlane Class C Common Stock Beneficially Owned |
| |
% of All
Greenlane Class C Common Stock Shares(3) |
| |
Combined
Voting Power(4) |
| |||||||||||||||||||||
Aaron LoCascio
|
| | | | 57,118(5) | | | | | | * | | | | | | — | | | | | | — | | | | | | 59,958,138(6) | | | | | | 85.29% | | | | | | 66.92% | | |
Adam Schoenfeld
|
| | | | 132,256(7) | | | | | | * | | | | | | — | | | | | | — | | | | | | 66,026,343(8) | | | | | | 93.92% | | | | | | 73.77% | | |
William Bine
|
| | | | 21,833(9) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
William Mote
|
| | | | 49,605(10) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Michael Cellucci
|
| | | | 32,127(11) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Douglas Fischer
|
| | | | 16,290(12) | | | | | | * | | | | | | 31,768(13) | | | | | | 1.30% | | | | | | — | | | | | | — | | | | | | * | | |
Neil Closner
|
| | | | 78,238(14) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Richard Taney
|
| | | | 98,533(15) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
Jeff Uttz
|
| | | | 63,533(16) | | | | | | * | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | * | | |
All executive officers, directors and director nominees as a group 9 people)
|
| | | | 549,533 | | | | | | 3.24% | | | | | | 31,768 | | | | | | 1.30% | | | | | | 66,026,343 | | | | | | 93.92%(17) | | | | | | 74.27% | | |
More than 5% Beneficial Owners
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jacoby & Co. LLC(18)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 59,958,138 | | | | | | 85.29% | | | | | | 66.86% | | |
Better Life Products Investment Group, Inc. (19)
|
| | | | — | | | | | | — | | | | | | 2,166,200 | | | | | | 88.92% | | | | | | — | | | | | | — | | | | | | 2.42% | | |
Name of Beneficial Owner(1)
|
| |
KushCo Common Stock
Beneficially Owned |
| |||||||||
|
Shares
|
| |
Percent(2)
|
| ||||||||
5% or Greater Stockholders | | | | | | | | | | | | | |
Adage Capital Partners, L.P.(3)
|
| | | | 9,672,752 | | | | | | 6.07% | | |
Executive Officers and Directors | | | | | | | | | | | | | |
Nicholas Kovacevich(4)
|
| | | | 9,720,189 | | | | | | 6.07% | | |
Stephen Christoffersen(5)
|
| | | | 567,476 | | | | | | * | | |
Rodrigo de Oliveira(6)
|
| | | | 844,963 | | | | | | * | | |
Eric Baum(7)
|
| | | | 1,109,550 | | | | | | * | | |
Barbara Goodstein(8)
|
| | | | 459,208 | | | | | | * | | |
Don Hunter(9)
|
| | | | 468,507 | | | | | | * | | |
Dallas Imbimbo(10)
|
| | | | 10,394,633 | | | | | | 6.51% | | |
Peter Kadens(11)
|
| | | | 312,210 | | | | | | * | | |
Jason Vegotsky(12)
|
| | | | 125,000 | | | | | | * | | |
All current executive officers and directors as a group (total 8 persons)(13)
|
| | | | 23,876,735 | | | | | | 14.66% | | |
($ in thousands)
|
| |
Three Months Ended March 31,
|
| |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | |
% of net sales
|
| |||||||||||
|
2021
|
| |
2020
|
| |
% Change
|
| |
2021
|
| |
2020
|
| |||||||||||||||||
Net sales: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 28,667 | | | | | $ | 27,130 | | | | | | 5.7% | | | | | | 84.3% | | | | | | 80.1% | | |
Canada
|
| | | | 2,561 | | | | | | 4,405 | | | | | | (41.9)% | | | | | | 7.5% | | | | | | 13.0% | | |
Europe
|
| | | | 2,781 | | | | | | 2,333 | | | | | | 19.2% | | | | | | 8.2% | | | | | | 6.9% | | |
Total net sales
|
| | | | 34,009 | | | | | | 33,868 | | | | | | 0.4% | | | | | | 100.0% | | | | | | 100.0% | | |
Cost of sales
|
| | | | 26,696 | | | | | | 26,539 | | | | | | 0.6% | | | | | | 78.5% | | | | | | 78.4% | | |
Gross profit
|
| | | | 7,313 | | | | | | 7,329 | | | | | | (0.2)% | | | | | | 21.5% | | | | | | 21.6% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries, benefits and payroll taxes
|
| | | | 6,370 | | | | | | 6,614 | | | | | | (3.7)% | | | | | | 18.7% | | | | | | 19.5% | | |
General and administrative
|
| | | | 8,339 | | | | | | 8,659 | | | | | | (3.7)% | | | | | | 24.5% | | | | | | 25.6% | | |
Goodwill impairment charge
|
| | | | — | | | | | | 8,996 | | | | | | * | | | | | | —% | | | | | | 26.6% | | |
Depreciation and amortization
|
| | | | 544 | | | | | | 710 | | | | | | (23.4)% | | | | | | 1.6% | | | | | | 2.1% | | |
Total operating expenses
|
| | | | 15,253 | | | | | | 24,979 | | | | | | 38.9% | | | | | | 44.8% | | | | | | 73.8% | | |
Loss from operations
|
| | | | (7,940) | | | | | | (17,650) | | | | | | 55.0% | | | | | | (23.3)% | | | | | | (52.1)% | | |
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (116) | | | | | | (110) | | | | | | 5.5% | | | | | | (0.3)% | | | | | | (0.3)% | | |
Other income, net
|
| | | | 324 | | | | | | 940 | | | | | | (65.5)% | | | | | | 1.0% | | | | | | 2.8% | | |
Total other income, net
|
| | | | 208 | | | | | | 830 | | | | | | (74.9)% | | | | | | 0.7% | | | | | | 2.5% | | |
Loss before income taxes
|
| | | | (7,732) | | | | | | (16,820) | | | | | | 54.0% | | | | | | (22.7)% | | | | | | (49.7)% | | |
Benefit from income taxes
|
| | | | (18) | | | | | | (81) | | | | | | 77.8% | | | | | | (0.1)% | | | | | | (0.2)% | | |
Net loss
|
| | | | (7,714) | | | | | | (16,739) | | | | | | 53.9% | | | | | | (22.6)% | | | | | | (49.5)% | | |
Net loss attributable to non-controlling interest
|
| | | | (3,458) | | | | | | (12,278) | | | | | | 71.8% | | | | | | (10.1)% | | | | | | (36.3)% | | |
Net loss attributable to Greenlane Holdings, Inc.
|
| | | $ | (4,256) | | | | | $ | (4,461) | | | | | | 4.6% | | | | | | (12.5)% | | | | | | (13.2)% | | |
($ in thousands)
|
| |
Three Months Ended March 31,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Net sales
|
| | | $ | 34,009 | | | | | $ | 33,868 | | |
Period-over-period change
|
| | | | 0.4% | | | | | | -32.1% | | |
Net cash used in operations
|
| | | $ | (15,257) | | | | | $ | (1,097) | | |
Adjusted net loss(1)
|
| | | $ | (5,519) | | | | | $ | (6,080) | | |
Adjusted EBITDA(1)
|
| | | $ | (5,201) | | | | | $ | (6,281) | | |
(in thousands)
|
| |
Three Months Ended March 31,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Net loss
|
| | | $ | (7,714) | | | | | $ | (16,739) | | |
EU VAT indemnification allowance adjustment(1)
|
| | | | (621) | | | | | | — | | |
Initial consulting costs related to ERP system implementation(3)
|
| | | | 301 | | | | | | 64 | | |
Restructuring expenses(4)
|
| | | | 247 | | | | | | 108 | | |
Equity-based compensation expense
|
| | | | 529 | | | | | | 270 | | |
Due diligence costs related to acquisition target(5)
|
| | | | — | | | | | | 1,221 | | |
Legal and professional fees related to M&A transactions(6)
|
| | | | 1,739 | | | | | | — | | |
Goodwill impairment charge(7)
|
| | | | — | | | | | | 8,996 | | |
Adjusted net loss
|
| | | $ | (5,519) | | | | | $ | (6,080) | | |
(in thousands)
|
| |
Three Months Ended March 31,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Net loss
|
| | | $ | (7,714) | | | | | $ | (16,739) | | |
EU VAT indemnification allowance adjustment(1)
|
| | | | (621) | | | | | | — | | |
Other (expense) income, net(2)
|
| | | | (324) | | | | | | (940) | | |
Benefit from income taxes
|
| | | | (18) | | | | | | (81) | | |
Interest expense
|
| | | | 116 | | | | | | 110 | | |
Initial consulting costs related to ERP system implementation(3)
|
| | | | 301 | | | | | | 64 | | |
Restructuring expenses(4)
|
| | | | 247 | | | | | | 108 | | |
Equity-based compensation expense
|
| | | | 529 | | | | | | 270 | | |
Depreciation and amortization
|
| | | | 544 | | | | | | 710 | | |
Due diligence costs related to acquisition target(5)
|
| | | | — | | | | | | 1,221 | | |
Legal and professional fees related to M&A transactions(6)
|
| | | | 1,739 | | | | | | — | | |
Goodwill impairment charge(7)
|
| | | | — | | | | | | 8,996 | | |
Adjusted EBITDA
|
| | | $ | (5,201) | | | | | $ | (6,281) | | |
| | |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
% of Net sales
|
| |||||||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
$
|
| |
%
|
| ||||||||||||||||||||||||||
Net sales: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 112,543 | | | | | $ | 160,243 | | | | | | 81.3% | | | | | | 86.6% | | | | | $ | (47,700) | | | | | | (29.8)% | | |
Canada
|
| | | | 15,457 | | | | | | 22,120 | | | | | | 11.2% | | | | | | 12.0% | | | | | | (6,663) | | | | | | (30.1)% | | |
Europe
|
| | | | 10,304 | | | | | | 2,643 | | | | | | 7.5% | | | | | | 1.4% | | | | | | 7,661 | | | | | | 289.9% | | |
Total net sales
|
| | | | 138,304 | | | | | | 185,006 | | | | | | 100.0% | | | | | | 100.0% | | | | | | (46,702) | | | | | | (25.2)% | | |
Cost of sales
|
| | | | 115,539 | | | | | | 153,916 | | | | | | 83.5% | | | | | | 83.2% | | | | | | (38,377) | | | | | | (24.9)% | | |
Gross profit
|
| | | | 22,765 | | | | | | 31,090 | | | | | | 16.5% | | | | | | 16.8% | | | | | | (8,325) | | | | | | (26.8)% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries, benefits and payroll taxes
|
| | | | 24,909 | | | | | | 29,716 | | | | | | 18.0% | | | | | | 16.1% | | | | | | (4,807) | | | | | | (16.2)% | | |
General and administrative
|
| | | | 35,315 | | | | | | 23,593 | | | | | | 25.5% | | | | | | 12.8% | | | | | | 11,722 | | | | | | 49.7% | | |
Goodwill impairment charge
|
| | | | 8,996 | | | | | | — | | | | | | 6.5% | | | | | | -% | | | | | | 8,996 | | | | | | 100.0% | | |
Depreciation and amortization
|
| | | | 2,520 | | | | | | 2,705 | | | | | | 1.9% | | | | | | 1.5% | | | | | | (185) | | | | | | (6.8)% | | |
Total operating expenses
|
| | | | 71,740 | | | | | | 56,014 | | | | | | 51.9% | | | | | | 30.4% | | | | | | 15,726 | | | | | | 28.1% | | |
Loss from operations
|
| | | | (48,975) | | | | | | (24,924) | | | | | | (35.4)% | | | | | | (13.6)% | | | | | | (24,051) | | | | | | 96.5% | | |
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in fair value of convertible notes
|
| | | | — | | | | | | (12,063) | | | | | | -% | | | | | | (6.5)% | | | | | | 12,063 | | | | | | (100.0)% | | |
Interest expense
|
| | | | (437) | | | | | | (975) | | | | | | (0.3)% | | | | | | (0.5)% | | | | | | 538 | | | | | | (55.2)% | | |
Other income, net
|
| | | | 1,902 | | | | | | 9,073 | | | | | | 1.4% | | | | | | 4.9% | | | | | | (7,171) | | | | | | (79.0)% | | |
Total other expense, net
|
| | | | 1,465 | | | | | | (3,965) | | | | | | 1.1% | | | | | | (2.1)% | | | | | | 5,430 | | | | | | * | | |
Loss before income taxes
|
| | | | (47,510) | | | | | | (28,889) | | | | | | (34.3)% | | | | | | (15.7)% | | | | | | (18,621) | | | | | | 64.5% | | |
Provision for income taxes
|
| | | | 194 | | | | | | 10,935 | | | | | | 0.1% | | | | | | 5.9% | | | | | | (10,741) | | | | | | (98.2)% | | |
Net loss
|
| | | | (47,704) | | | | | | (39,824) | | | | | | (34.4)% | | | | | | (21.6)% | | | | | | (7,880) | | | | | | 19.8% | | |
Net loss attributable to non-controlling interest
|
| | | | (33,187) | | | | | | (11,008) | | | | | | (24.0)% | | | | | | (6.0)% | | | | | | (22,179) | | | | | | 201.5% | | |
Net loss attributable to Greenlane Holdings, Inc.
|
| | | $ | (14,517) | | | | | $ | (28,816) | | | | | | (10.4)% | | | | | | (15.6)% | | | | | $ | 14,299 | | | | | | (49.6)% | | |
($ in thousands)
|
| |
For the year ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Net sales
|
| | | $ | 138,304 | | | | | $ | 185,006 | | |
Period-over-period change
|
| | | | (25.2)% | | | | | | 3.4% | | |
Net cash used in operations
|
| | | $ | (12,302) | | | | | $ | (36,903) | | |
Adjusted net loss(1)
|
| | | $ | (25,863) | | | | | $ | (18,544) | | |
Adjusted EBITDA(1)
|
| | | $ | (24,352) | | | | | $ | (13,424) | | |
(in thousands)
|
| |
Year ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Net loss
|
| | | $ | (47,704) | | | | | $ | (39,824) | | |
Debt placement costs for convertible notes(1)
|
| | | | — | | | | | | 422 | | |
Transition to being a public company(2)
|
| | | | — | | | | | | 775 | | |
Equity-based compensation expense
|
| | | | 853 | | | | | | 8,020 | | |
Initial consulting costs related to ERP system implementation(3)
|
| | | | 215 | | | | | | — | | |
Restructuring expenses(4)
|
| | | | 1,229 | | | | | | — | | |
Due diligence costs related to acquisition target
|
| | | | 903 | | | | | | — | | |
Goodwill impairment charge
|
| | | | 8,996 | | | | | | — | | |
Adjustments related to the product rationalization to increase inventory turnover of slow-selling products
|
| | | | 3,222 | | | | | | — | | |
Obsolete inventory charges related to management’s strategic initiative(5)
|
| | | | 1,137 | | | | | | — | | |
Allowances for uncollectible vendor deposits incurred in connection with management’s strategic initiative(5)
|
| | | | 822 | | | | | | — | | |
Loss related to indemnification asset not probable of recovery
|
| | | | 4,464 | | | | | | — | | |
Change in fair value of convertible notes
|
| | | | — | | | | | | 12,063 | | |
Adjusted net loss
|
| | | $ | (25,863) | | | | | $ | (18,544) | | |
(in thousands)
|
| |
Year ended December 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Net loss
|
| | | $ | (47,704) | | | | | $ | (39,824) | | |
Other income, net(1)
|
| | | | (1,902) | | | | | | (9,073) | | |
Transition to being a public company(2)
|
| | | | — | | | | | | 775 | | |
Interest expense
|
| | | | 437 | | | | | | 975 | | |
Provision for (benefit from) income taxes
|
| | | | 194 | | | | | | 10,935 | | |
Depreciation and amortization
|
| | | | 2,520 | | | | | | 2,705 | | |
Equity-based compensation expense
|
| | | | 853 | | | | | | 8,020 | | |
Initial consulting costs related to ERP system implementation(3)
|
| | | | 215 | | | | | | — | | |
Restructuring expenses(4)
|
| | | | 1,229 | | | | | | — | | |
Due diligence costs related to acquisition target
|
| | | | 903 | | | | | | — | | |
Adjustments related to product rationalization to increase inventory turnover of slow-selling products(5)
|
| | | | 3,222 | | | | | | — | | |
One-time early termination fee on operating lease in connection with moving to a centralized distribution center model
|
| | | | 262 | | | | | | — | | |
Goodwill impairment charge
|
| | | | 8,996 | | | | | | — | | |
Inventory charges related to management’s strategic initiative(5)
|
| | | | 1,137 | | | | | | — | | |
Allowances for uncollectible vendor deposits incurred in connection with management’s strategic initiative(5)
|
| | | | 822 | | | | | | — | | |
Loss related to indemnification asset not probable of recovery
|
| | | | 4,464 | | | | | | — | | |
Change in fair value of convertible notes
|
| | | | — | | | | | | 12,063 | | |
Adjusted EBITDA
|
| | | $ | (24,352) | | | | | $ | (13,424) | | |
(in thousands)
|
| |
Three Months Ended March 31,
|
| |||||||||
|
2021
|
| |
2020
|
| ||||||||
Net cash used in operating activities
|
| | | $ | (15,257) | | | | | $ | (1,097) | | |
Net cash used in investing activities
|
| | | | (2,822) | | | | | | (2,262) | | |
Net cash used in financing activities
|
| | | | (104) | | | | | | (149) | | |
| | |
Year Ended December 31,
|
| |||||||||
(in thousands)
|
| |
2020
|
| |
2019
|
| ||||||
Net cash used in operating activities
|
| | | $ | (12,302) | | | | | $ | (36,903) | | |
Net cash used in investing activities
|
| | | | (4,144) | | | | | | (3,732) | | |
Net cash (used in) provided by financing activities
|
| | | | (1,063) | | | | | | 80,979 | | |
Shipping
State / Province |
| |
2020
Revenue |
| |
% of 2020
Revenue |
| |
2019
Revenue |
| |
% of 2019
Revenue |
| ||||||||||||
CA
|
| | | $ | 21,371 | | | | | | 18.8% | | | | | $ | 73,638 | | | | | | 49.4% | | |
WA
|
| | | | 8,845 | | | | | | 7.8 | | | | | | 11,543 | | | | | | 7.7 | | |
CO
|
| | | | 8,661 | | | | | | 7.6 | | | | | | 10,891 | | | | | | 7.3 | | |
MI
|
| | | | 7,212 | | | | | | 6.3 | | | | | | 4,013 | | | | | | 2.7 | | |
OR
|
| | | | 5,944 | | | | | | 5.2 | | | | | | 8,391 | | | | | | 5.6 | | |
MA
|
| | | | 4,988 | | | | | | 4.4 | | | | | | 4,850 | | | | | | 3.3 | | |
NV
|
| | | | 4,511 | | | | | | 4.0 | | | | | | 6,601 | | | | | | 4.4 | | |
IL
|
| | | | 4,141 | | | | | | 3.6 | | | | | | 1,181 | | | | | | 0.8 | | |
ME
|
| | | | 1,240 | | | | | | 1.1 | | | | | | 1,543 | | | | | | 1.0 | | |
Other Rec States
|
| | | | 730 | | | | | | 0.6 | | | | | | 1,240 | | | | | | 0.8 | | |
Rec State Total
|
| | | | 67,643 | | | | | | 59.4 | | | | | | 123,891 | | | | | | 83.2 | | |
Medical Only States
|
| | | | 34,676 | | | | | | 30.5 | | | | | | 15,943 | | | | | | 10.7 | | |
Canada
|
| | | | 8,321 | | | | | | 7.3 | | | | | | 2,473 | | | | | | 1.7 | | |
Other Countries
|
| | | | 187 | | | | | | 0.2 | | | | | | 568 | | | | | | 0.4 | | |
Shipping
State / Province |
| |
2020
Revenue |
| |
% of 2020
Revenue |
| |
2019
Revenue |
| |
% of 2019
Revenue |
| ||||||||||||
Other U.S. States
|
| | | | 3,010 | | | | | | 2.6 | | | | | | 6,079 | | | | | | 4.1 | | |
Total
|
| | | $ | 113,837 | | | | | | 100.0% | | | | | $ | 148,954 | | | | | | 100.0% | | |
|
PRODUCT CATEGORY
|
| |
2020
Revenue |
| |
% of 2020
Revenue |
| |
2019
Revenue |
| |
% of 2019
Revenue |
| ||||||||||||
Vape
|
| | | $ | 73,712 | | | | | | 64.8% | | | | | $ | 101,704 | | | | | | 68.3% | | |
Packaging, Papers & Supplies
|
| | | | 27,125 | | | | | | 23.8 | | | | | | 28,231 | | | | | | 19.0 | | |
Energy and Natural Products
|
| | | | 9,345 | | | | | | 8.2 | | | | | | 14,502 | | | | | | 9.7 | | |
Services
|
| | | | 3,655 | | | | | | 3.2 | | | | | | 4,517 | | | | | | 3.0 | | |
| | | | $ | 113,837 | | | | | | 100.0% | | | | | $ | 148,954 | | | | | | 100.0% | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Net revenue
|
| | | $ | 32,884 | | | | | $ | 30,143 | | | | | $ | 2,741 | | | | | | 9.1% | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Cost of goods sold
|
| | | $ | 26,443 | | | | | $ | 39,051 | | | | | $ | (12,608) | | | | | | (32.3)% | | |
Gross profit
|
| | | | 6,441 | | | | | | (8,908) | | | | | | 15,349 | | | | | | 172.3% | | |
Gross profit percentage (gross profit as a percent of revenue)
|
| | | | 19.6% | | | | | | (29.6)% | | | | | | 49.2% | | | | | | | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Selling, general and administrative
|
| | | $ | 10,941 | | | | | $ | 27,183 | | | | | $ | (16,242) | | | | | | (59.8)% | | |
Restructuring costs
|
| | | $ | 286 | | | | | $ | 7,301 | | | | | $ | (7,015) | | | | | | (96.1)% | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Loss from operations
|
| | | $ | (4,786) | | | | | $ | (43,392) | | | | | $ | 38,606 | | | | | | 89.0% | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Other income (expense), net
|
| | | $ | (256) | | | | | $ | (983) | | | | | $ | 727 | | | | | | 74.0% | | |
(in thousands, except percentages)
|
| |
For the three months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Net Loss
|
| | | $ | (5,042) | | | | | $ | (44,375) | | | | | $ | 39,333 | | | | | | 88.6% | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Net revenue
|
| | | $ | 59,645 | | | | | $ | 65,105 | | | | | $ | (5,460) | | | | | | (8.4)% | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Cost of goods sold
|
| | | $ | 47,465 | | | | | $ | 66,742 | | | | | $ | (19,277) | | | | | | (28.9)% | | |
Gross profit
|
| | | | 12,180 | | | | | | (1,637) | | | | | | 13,817 | | | | | | 844.0% | | |
Gross profit percentage (gross profit as a percent of revenue)
|
| | | | 20.4% | | | | | | (2.5)% | | | | | | 22.9% | | | | | | | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Selling, general and administrative
|
| | | $ | 19,753 | | | | | $ | 48,258 | | | | | $ | (28,505) | | | | | | (59.1)% | | |
Restructuring costs
|
| | | | 294 | | | | | | 7,301 | | | | | | (7,007) | | | | | | (96.0)% | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Loss from operations
|
| | | $ | (7,867) | | | | | $ | (57,196) | | | | | $ | 49,329 | | | | | | 86.2% | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Other income (expense), net
|
| | | $ | (1,625) | | | | | $ | 315 | | | | | $ | (1,940) | | | | | | (615.9)% | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
February 28,
2021 |
| |
February 29,
2020 |
| ||||||||||||||||||||
Net Loss
|
| | | $ | (9,492) | | | | | $ | (56,881) | | | | | $ | 47,389 | | | | | | 83.3% | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Net revenue
|
| | | $ | 113,837 | | | | | $ | 148,954 | | | | | $ | (35,117) | | | | | | (23.6)% | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Cost of goods sold
|
| | | $ | 106,265 | | | | | $ | 124,386 | | | | | $ | (18,121) | | | | | | (14.6)% | | |
Gross profit
|
| | | | 7,572 | | | | | | 24,568 | | | | | | (16,996) | | | | | | (69.2)% | | |
Gross profit percentage (gross profit as a percent of revenue)
|
| | | | 6.7% | | | | | | 16.5% | | | | | | (9.8)% | | | | | | | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Selling, general and administrative
|
| | | $ | 71,314 | | | | | $ | 72,787 | | | | | $ | (1,473) | | | | | | (2.0)% | | |
Gain on disposition of assets
|
| | | $ | — | | | | | $ | (1,254) | | | | | $ | 1,254 | | | | | | (100.0)% | | |
Change in fair value of contingent consideration
|
| | | $ | — | | | | | $ | (1,780) | | | | | $ | 1,780 | | | | | | (100.0)% | | |
Impairment loss on intangible asset
|
| | | $ | 1,156 | | | | | $ | — | | | | | $ | 1,156 | | | | | | 100.0% | | |
Restructuring costs
|
| | | $ | 8,358 | | | | | $ | — | | | | | $ | 8,358 | | | | | | 100.0% | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Other (expense) income, net
|
| | | $ | (4,429) | | | | | $ | 5,676 | | | | | $ | (10,105) | | | | | | (178.0)% | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Income Tax (Expense) Benefit
|
| | | $ | 29 | | | | | $ | (127) | | | | | $ | 156 | | | | | | (122.8)% | | |
(in thousands, except percentages)
|
| |
For the year ended August 31,
|
| |
Variance
|
| |
Percent Change
|
| |||||||||||||||
|
2020
|
| |
2019
|
| ||||||||||||||||||||
Net Loss
|
| | | $ | (77,656) | | | | | $ | (39,636) | | | | | $ | (38,020) | | | | | | 95.9% | | |
(in thousands, except percentages)
|
| |
February 28, 2021
|
| |
August 31, 2020
|
| |
August 31, 2019
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 34,962 | | | | | $ | 10,476 | | | | | $ | 3,944 | | |
Accounts receivable, net
|
| | | $ | 10,449 | | | | | $ | 9,427 | | | | | $ | 25,972 | | |
Total current assets
|
| | | $ | 108,332 | | | | | $ | 57,006 | | | | | $ | 85,893 | | |
Total current liabilities
|
| | | $ | 49,112 | | | | | $ | 36,357 | | | | | $ | 32,628 | | |
Working capital surplus
|
| | | $ | 59,220 | | | | | $ | 20,649 | | | | | $ | 53,265 | | |
(in thousands, except percentages)
|
| |
For the six months ended
|
| |||||||||
|
February 28, 2021
|
| |
February 29, 2020
|
| ||||||||
Cash provided by (used in): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | (21,994) | | | | | $ | (18,761) | | |
Investing activities
|
| | | $ | (825) | | | | | $ | (3,550) | | |
Financing activities
|
| | | $ | 47,305 | | | | | $ | 29,745 | | |
(in thousands, except percentages)
|
| |
August 31,
|
| |||||||||
|
2020
|
| |
2019
|
| ||||||||
Cash provided by (used in): | | | | | | | | | | | | | |
Operating activities
|
| | | $ | (19,707) | | | | | $ | (70,242) | | |
Investing activities
|
| | | $ | (5,048) | | | | | $ | (8,017) | | |
Financing activities
|
| | | $ | 31,287 | | | | | $ | 68,736 | | |
|
If you are an Greenlane stockholder:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor New York, NY 10005 Telephone: (212) 269-5550 (banks and brokers call collect at (800) 317-8033 Email: GNLN@dfking.com |
| |
If you are an KushCo stockholder:
Morrow Sodali
509 Madison Avenue New York, New York 10022 Telephone: (800) 662-5200 (in North America) (203) 658-9400 (outside of North America) Email: KSHB@info.morrowsodali.com |
|
| INTRODUCTION | | | | | F-2 | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-8 | | |
| | |
As of
March 31, 2021 |
| |
As of
February 28, 2021 |
| | | | | | | | | | | | | | | | | | | ||||||
| | |
Greenlane
Holdings, Inc. |
| |
KushCo Holdings,
Inc. After Reclassification (Note 3) |
| |
Transaction
Accounting Adjustments (Notes 4 and 5) |
| |
Note
|
| |
Pro Forma
Combined Company |
| |||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 12,309 | | | | | $ | 34,962 | | | | | $ | (28,681) | | | | |
|
5(a)
|
| | | | $ | 18,590 | | |
Accounts receivable, net
|
| | | | 5,516 | | | | | | 10,449 | | | | | | — | | | | | | | | | | | | 15,965 | | |
Inventories, net
|
| | | | 34,694 | | | | | | 50,846 | | | | | | — | | | | | | | | | | | | 85,540 | | |
Vendor deposits
|
| | | | 10,856 | | | | | | 4,268 | | | | | | — | | | | | | | | | | | | 15,124 | | |
Assets held for sale
|
| | | | 896 | | | | | | — | | | | | | — | | | | | | | | | | | | 896 | | |
Other current assets
|
| | | | 10,596 | | | | | | 7,807 | | | | | | — | | | | | | | | | | | | 18,403 | | |
Total current assets
|
| | | | 74,867 | | | | | | 108,332 | | | | | | (28,681) | | | | | | | | | | | | 154,518 | | |
Property and equipment, net
|
| | | | 12,735 | | | | | | 8,381 | | | | | | — | | | | | | | | | | | | 21,116 | | |
Intangible assets, net
|
| | | | 8,824 | | | | | | 743 | | | | | | 100,057 | | | | |
|
5(b)
|
| | | | | 109,624 | | |
Goodwill
|
| | | | 7,973 | | | | | | 52,267 | | | | | | 930 | | | | |
|
5(c)
|
| | | | | 61,170 | | |
Operating lease right-of-use assets
|
| | | | 2,606 | | | | | | 7,169 | | | | | | — | | | | | | | | | | | | 9,775 | | |
Other assets
|
| | | | 2,038 | | | | | | 7,381 | | | | | | (2,520) | | | | |
|
5(d)
|
| | | | | 6,899 | | |
Total assets
|
| | | $ | 109,043 | | | | | $ | 184,273 | | | | | $ | 69,786 | | | | | | | | | | | $ | 363,102 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 8,241 | | | | | $ | 10,767 | | | | | $ | — | | | | | | | | | | | $ | 19,008 | | |
Accrued expenses and other current liabilities
|
| | | | 19,436 | | | | | | 6,442 | | | | | | 9,742 | | | | |
|
5(e)
|
| | | | | 35,620 | | |
Customer deposits
|
| | | | 3,266 | | | | | | 4,099 | | | | | | — | | | | | | | | | | | | 7,365 | | |
Current portion of notes payable
|
| | | | — | | | | | | 16,185 | | | | | | (16,185) | | | | |
|
5(f)
|
| | | | | — | | |
Line of credit
|
| | | | — | | | | | | 9,931 | | | | | | (9,931) | | | | |
|
5(d)
|
| | | | | — | | |
Current portion of operating leases
|
| | | | 713 | | | | | | 1,688 | | | | | | — | | | | | | | | | | | | 2,401 | | |
Current portion of finance leases
|
| | | | 216 | | | | | | — | | | | | | — | | | | | | | | | | | | 216 | | |
Total current liabilities
|
| | | | 31,872 | | | | | | 49,112 | | | | | | (16,374) | | | | | | | | | | | | 64,610 | | |
Note payable, less current portion and debt issuance costs, net
|
| | | | 9,395 | | | | | | — | | | | | | — | | | | | | | | | | | | 9,395 | | |
Operating leases, less current portion
|
| | | | 2,312 | | | | | | 7,648 | | | | | | — | | | | | | | | | | | | 9,960 | | |
Finance leases, less current portion
|
| | | | 246 | | | | | | — | | | | | | — | | | | | | | | | | | | 246 | | |
Warrant liability
|
| | | | — | | | | | | 1,481 | | | | | | (1,481) | | | | |
|
5(g)
|
| | | | | — | | |
Other liabilities
|
| | | | 1,115 | | | | | | 36 | | | | | | — | | | | | | | | | | | | 1,151 | | |
Total long-term liabilities
|
| | | | 13,068 | | | | | | 9,165 | | | | | | (1,481) | | | | | | | | | | | | 20,752 | | |
Total liabilities
|
| | | | 44,940 | | | | | | 58,277 | | | | | | (17,855) | | | | | | | | | | | | 85,362 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Common stock, $0.001 par value per share
|
| | | | — | | | | | | 159 | | | | | | (159) | | | | |
|
5(h)
|
| | | | | — | | |
Class A common stock, $0.01 par value per share
|
| | | | 163 | | | | | | — | | | | | | 409 | | | | |
|
5(h)
|
| | | | | 572 | | |
Class B common stock, $0.0001 par value per share
|
| | | | 1 | | | | | | — | | | | | | 2 | | | | |
|
5(h)
|
| | | | | 3 | | |
Class C Common stock, $0.0001 par value per
share |
| | | | 7 | | | | | | — | | | | | | (7) | | | | |
|
5(h)
|
| | | | | — | | |
Additional paid-in capital
|
| | | | 47,705 | | | | | | 275,979 | | | | | | (47,781) | | | | |
|
5(h)
|
| | | | | 275,903 | | |
Accumulated deficit
|
| | | | (29,104) | | | | | | (150,142) | | | | | | 135,177 | | | | |
|
5(h)
|
| | | | | (44,069) | | |
Accumulated other comprehensive income (loss)
|
| | | | 47 | | | | | | — | | | | | | — | | | | | | | | | | | | 47 | | |
Total stockholders’ equity attributable to Greenlane Holdings, Inc.
|
| | | | 18,819 | | | | | | 125,996 | | | | | | 87,641 | | | | | | | | | | | | 232,456 | | |
Non-controlling interest
|
| | | | 45,284 | | | | | | — | | | | | | — | | | | | | | | | | | | 45,284 | | |
Total stockholders’ equity
|
| | | | 64,103 | | | | | | 125,996 | | | | | | 87,461 | | | | | | | | | | | | 277,740 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 109,043 | | | | | $ | 184,273 | | | | | $ | 69,786 | | | | | | | | | | | $ | 363,102 | | |
| | |
Three Months Ended
March 31, 2021 |
| |
Three Months
February 28, 2021 |
| | | | | | | | | | | | | | | | | | | ||||||
| | |
Greenlane
Holdings, Inc. After Reclassification (Note 3) |
| |
KushCo
Holdings, Inc. After Reclassification (Note 3) |
| |
Transaction
Accounting Adjustments (Notes 4 and 6) |
| |
Note
|
| |
Pro Forma
Combined Company |
| |||||||||||||||
Net sales
|
| | | $ | 34,009 | | | | | $ | 32,884 | | | | | $ | — | | | | | | | | | | | $ | 66,893 | | |
Cost of sales
|
| | | | 26,696 | | | | | | 26,417 | | | | | | — | | | | | | | | | | | | 53,113 | | |
Gross profit
|
| | | | 7,313 | | | | | | 6,467 | | | | | | — | | | | | | | | | | | | 13,780 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries, benefits and payroll
taxes |
| | | | 6,370 | | | | | | 5,765 | | | | | | — | | | | | | | | | | | | 12,135 | | |
General and administrative
|
| | | | 8,092 | | | | | | 4,701 | | | | | | — | | | | | | | | | | | | 12,793 | | |
Depreciation and amortization
|
| | | | 544 | | | | | | 501 | | | | | | 1,241 | | | | |
|
6(a)
|
| | | | | 2,286 | | |
Restructuring costs
|
| | | | 247 | | | | | | 286 | | | | | | — | | | | | | | | | | | | 533 | | |
Total operating expenses
|
| | | | 15,253 | | | | | | 11,253 | | | | | | 1,241 | | | | | | | | | | | | 27,747 | | |
Loss from operations
|
| | | | (7,940) | | | | | | (4,786) | | | | | | (1,241) | | | | | | | | | | | | (13,967) | | |
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in fair value of warrant liability
|
| | | | — | | | | | | (933) | | | | | | 933 | | | | |
|
6(b)
|
| | | | | — | | |
Change in fair value of equity investment
|
| | | | — | | | | | | 1,075 | | | | | | — | | | | | | | | | | | | 1,075 | | |
Interest expense
|
| | | | (116) | | | | | | (1,558) | | | | | | — | | | | | | | | | | | | (1,674) | | |
Loss on extinguishment of debt
|
| | | | — | | | | | | (447) | | | | | | — | | | | | | | | | | | | (447) | | |
Other income (expense), net
|
| | | | 324 | | | | | | 1,607 | | | | | | — | | | | | | | | | | | | 1,931 | | |
Total other income (expense), net
|
| | | | 208 | | | | | | (256) | | | | | | 933 | | | | | | | | | | | | 885 | | |
Loss before income taxes
|
| | | | (7,732) | | | | | | (5,042) | | | | | | (308) | | | | | | | | | | | | (13,082) | | |
(Benefit from) provision for income taxes
|
| | | | (18) | | | | | | — | | | | | | — | | | | | | | | | | | | (18) | | |
Net loss
|
| | | | (7,714) | | | | | | (5,042) | | | | | | (308) | | | | | | | | | | | | (13,064) | | |
Net loss attributable to non-controlling interest
|
| | | | (3,458) | | | | | | — | | | | | | — | | | | | | | | | | | | (3,458) | | |
Net loss attributable to Greenlane Holdings, Inc.
|
| | | $ | (4,256) | | | | | $ | (5,042) | | | | | $ | (308) | | | | | | | | | | | $ | (9,606) | | |
Net loss attributable to Class A common stock per share – basis and diluted
|
| | | $ | (0.28) | | | | | | | | | | | | | | | | |
|
6(g)
|
| | | | $ | (0.17) | | |
Weighted-average shares of Class A
common stock outstanding – basic and diluted |
| | | | 15,263 | | | | | | | | | | | | | | | | |
|
6(g)
|
| | | | | 56,154 | | |
| | |
Year Ended
December 31, 2020 |
| |
12 Months Ended
November 30, 2020 |
| | | | | | | | | | | | | | | | | | | ||||||
| | |
Greenlane
Holdings, Inc. After Reclassification (Note 3) |
| |
KushCo
Holdings, Inc. After Reclassification (Note 3) |
| |
Transaction
Accounting Adjustments (Notes 4 and 6) |
| |
Note
|
| |
Pro Forma
Combined Company |
| |||||||||||||||
Net sales
|
| | | $ | 138,304 | | | | | $ | 105,635 | | | | | $ | — | | | | | | | | | | | $ | 243,939 | | |
Cost of sales
|
| | | | 115,539 | | | | | | 99,575 | | | | | | — | | | | | | | | | | | | 215,114 | | |
Gross profit
|
| | | | 22,765 | | | | | | 6,060 | | | | | | — | | | | | | | | | | | | 28,825 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries, benefits and payroll
taxes |
| | | | 24,909 | | | | | | 26,577 | | | | | | 5,771 | | | | |
|
6(c)
|
| | | | | 57,257 | | |
General and administrative
|
| | | | 34,098 | | | | | | 29,247 | | | | | | 9,194 | | | | |
|
6(d)
|
| | | | | 72,539 | | |
Depreciation and amortization
|
| | | | 2,520 | | | | | | 3,247 | | | | | | 4,587 | | | | |
|
6(a)
|
| | | | | 10,354 | | |
Goodwill impairment charge
|
| | | | 8,996 | | | | | | — | | | | | | — | | | | | | | | | | | | 8,996 | | |
Impairment loss on intangible assets
|
| | | | — | | | | | | 1,156 | | | | | | — | | | | | | | | | | | | 1,156 | | |
Restructuring costs
|
| | | | 1,217 | | | | | | 8,366 | | | | | | — | | | | | | | | | | | | 9,583 | | |
Total operating expenses
|
| | | | 71,740 | | | | | | 68,593 | | | | | | 19,552 | | | | | | | | | | | | 159,885 | | |
Loss from operations
|
| | | | (48,975) | | | | | | (62,533) | | | | | | (19,552) | | | | | | | | | | | | (131,060) | | |
Other income (expense), net: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Change in fair value of warrant liability
|
| | | | — | | | | | | 1,692 | | | | | | — | | | | | | | | | | | | 1,692 | | |
Change in fair value of equity investment
|
| | | | — | | | | | | (372) | | | | | | — | | | | | | | | | | | | (372) | | |
Interest expense
|
| | | | (437) | | | | | | (6,134) | | | | | | (2,520) | | | | |
|
6(e)
|
| | | | | (9,091) | | |
Loss on extinguishment of debt
|
| | | | — | | | | | | (2,528) | | | | | | (1,750) | | | | |
|
6(f)
|
| | | | | (4,278) | | |
Other income (expense), net
|
| | | | 1,902 | | | | | | 246 | | | | | | — | | | | | | | | | | | | 2,148 | | |
Total other income (expense), net
|
| | | | 1,465 | | | | | | (7,096) | | | | | | (4,270) | | | | | | | | | | | | (9,901) | | |
Loss before income taxes
|
| | | | (47,510) | | | | | | (69,629) | | | | | | (23,822) | | | | | | | | | | | | (140,961) | | |
(Benefit from) provision for income taxes
|
| | | | 194 | | | | | | (29) | | | | | | — | | | | | | | | | | | | 165 | | |
Net loss
|
| | | | (47,704) | | | | | | (69,600) | | | | | | (23,822) | | | | | | | | | | | | (141,126) | | |
Net loss attributable to non-controlling interest
|
| | | | (33,187) | | | | | | — | | | | | | — | | | | | | | | | | | | (33,187) | | |
Net loss attributable to Greenlane Holdings, Inc.
|
| | | $ | (14,517) | | | | | $ | (69,600) | | | | | $ | (23,822) | | | | | | | | | | | $ | 107,939 | | |
Net loss attributable to Class A common stock per share – basis and diluted
|
| | | $ | (1.22) | | | | | | | | | | | | | | | | |
|
6(g)
|
| | | | $ | (2.04) | | |
Weighted-average shares of Class A
common stock outstanding – basic and diluted |
| | | | 11,947 | | | | | | | | | | | | | | | | |
|
6(g)
|
| | | | | 52,838 | | |
| | |
As of February 28, 2021
|
| |
Reclassification
|
| |
As of February 28, 2021
|
| |
Note
|
| ||||||||||||
(in thousands)
|
| |
KushCo Holdings, Inc.
|
| |
KushCo Holdings, Inc.
After Reclassification |
| ||||||||||||||||||
Vendor deposits
|
| | | $ | — | | | | | $ | 4,268 | | | | | $ | 4,268 | | | | | | (a) | | |
Other current assets
|
| | | | 12,075 | | | | | | (4,268) | | | | | | 7,807 | | | | | | (a) | | |
Operating lease right-of-use assets
|
| | | | — | | | | | | 7,169 | | | | | | 7,169 | | | | | | (b) | | |
Other assets
|
| | | | 14,550 | | | | | | (7,169) | | | | | | 7,381 | | | | | | (b) | | |
Accrued expenses and other current liabilities
|
| | | | 8,130 | | | | | | (1,688) | | | | | | 6,442 | | | | | | (c) | | |
Current portion of operating leases
|
| | | | — | | | | | | 1,688 | | | | | | 1,688 | | | | | | (c) | | |
Operating leases, less current portion
|
| | | | — | | | | | | 7,648 | | | | | | 7,648 | | | | | | (d) | | |
Other liabilities
|
| | | | 7,684 | | | | | | (7,648) | | | | | | 36 | | | | | | (d) | | |
| | |
12 Months Ended
November 30, 2020 |
| |
Reclassification
|
| |
12 Months Ended
November 30, 2020 |
| |
Note
|
| |||||||||
(in thousands)
|
| |
KushCo Holdings, Inc.
|
| |
KushCo Holdings, Inc.
After Reclassification |
| |||||||||||||||
Cost of sales
|
| | | $ | 99,595 | | | | | $ | (20) | | | | | $ | 99,575 | | | |
(e)(g)(h)
|
|
Salaries, benefits and payroll taxes
|
| | | | — | | | | | | 26,577 | | | | | | 26,577 | | | |
(f)(g)
|
|
General and administrative
|
| | | | 59,051 | | | | | | (29,804) | | | | | | 29,247 | | | |
(e)(f)(h)(i)
|
|
Depreciation and amortization
|
| | | | — | | | | | | 3,247 | | | | | | 3,247 | | | |
(i)
|
|
| | |
Three Months Ended
February 28, 2021 |
| |
Reclassification
|
| |
Three Months Ended
February 28, 2021 |
| |
Note
|
| |||||||||
(in thousands)
|
| |
KushCo Holdings, Inc.
|
| |
KushCo Holdings, Inc.
After Reclassification |
| |||||||||||||||
Cost of sales
|
| | | $ | 26,443 | | | | | $ | (26) | | | | | $ | 26,417 | | | |
(j)(l)(m)
|
|
Salaries, benefits and payroll taxes
|
| | | | — | | | | | | 5,765 | | | | | | 5,765 | | | |
(k)(l)
|
|
General and administrative
|
| | | | 10,941 | | | | | | (6,240) | | | | | | 4,701 | | | |
(j)(k)(m)(n)
|
|
Depreciation and amortization
|
| | | | — | | | | | | 501 | | | | | | 501 | | | |
(n)
|
|
| | |
Year Ended
December 31, 2020 |
| |
Reclassification
|
| |
Year Ended
December 31, 2020 |
| |
Note
|
| ||||||||||||
(in thousands)
|
| |
Greenlane Holdings, Inc.
|
| |
Greenlane Holdings, Inc.
After Reclassification |
| ||||||||||||||||||
General and administrative
|
| | | $ | 35,315 | | | | | $ | (1,217) | | | | | $ | 34,098 | | | | | | (o) | | |
Restructuring costs
|
| | | | — | | | | | | 1,217 | | | | | | 1,217 | | | | | | (o) | | |
| | |
Three Months Ended
March 31, 2021 |
| |
Reclassification
|
| |
Three Months Ended
March 31, 2021 |
| |
Notes
|
| ||||||||||||
(in thousands)
|
| |
Greenlane Holdings, Inc.
|
| |
Greenlane Holdings, Inc.
After Reclassification |
| ||||||||||||||||||
General and administrative
|
| | | $ | 8,339 | | | | | $ | (247) | | | | | $ | 8,092 | | | | | | (o) | | |
Restructuring costs
|
| | | | — | | | | | | 247 | | | | | | 247 | | | | | | (o) | | |
Change in Greenlane Class A Stock Price
|
| |
Stock Price
|
| |
Estimated Merger
Consideration (in thousands) |
| ||||||
25% increase in stock price
|
| | | $ | 6.03 | | | | | $ | 279,130 | | |
25% decrease in stock price
|
| | | $ | 3.62 | | | | | $ | 168,117 | | |
| | |
Amount
(in thousands) |
| |||
Estimated merger consideration
|
| | | $ | 223,379 | | |
Assets acquired | | | | | | | |
Cash
|
| | | $ | 6,281 | | |
Accounts receivable
|
| | | | 10,449 | | |
Inventories
|
| | | | 50,846 | | |
Vendor deposits
|
| | | | 4,268 | | |
Other current assets
|
| | | | 7,807 | | |
Property and equipment
|
| | | | 8,381 | | |
Intangible assets
|
| | | | 100.800 | | |
Operating lease right-of-use assets
|
| | | | 7,169 | | |
Other assets
|
| | | | 4,861 | | |
Total estimated assets acquired
|
| | | $ | 200,862 | | |
Liabilities assumed | | | | | | | |
Accounts payable
|
| | | $ | 10,767 | | |
Accrued expenses and other current liabilities
|
| | | | 6,442 | | |
Customer deposits
|
| | | | 4,099 | | |
Current portion of operating leases
|
| | | | 1,688 | | |
Operating leases, less current portion
|
| | | | 7,648 | | |
Other liabilities
|
| | | | 36 | | |
Total estimated liabilities assumed
|
| | | $ | 30,680 | | |
Total estimated fair value of net assets acquired
|
| | | $ | 170,182 | | |
Goodwill | | | | $ | 53,197 | | |
(in thousands)
|
| |
As of March 31, 2021
|
| |||
KushCo current portion of note payable payoff
|
| | | $ | (17,000) | | |
KushCo line of credit payoff
|
| | | | (9,931) | | |
KushCo line of credit estimated termination penalties
|
| | | | (1,750) | | |
Net adjustment to cash
|
| | | $ | (28,681) | | |
(in thousands)
|
| |
Estimated useful life
(in years) |
| |
As of
March 31, 2021 |
| |||
Customer relationships
|
| |
12
|
| | | $ | 60,100 | | |
Trademarks portfolio
|
| |
Indefinite
|
| | | | 37,400 | | |
Proprietary Design Library
|
| |
7
|
| | | | 3,300 | | |
Estimated fair value of intangible assets acquired
|
| | | | | | | 100,800 | | |
Less: Elimination of KushCo’s historical intangible assets, net
|
| | | | | | | (743) | | |
Net adjustment to intangible assets, net
|
| | | | | | $ | 100,057 | | |
(in thousands)
|
| |
As of
March 31, 2021 |
| |||
Elimination of KushCo’s historical goodwill
|
| | | $ | (52,267) | | |
Preliminary goodwill based on estimated preliminary purchase price allocation
|
| | | | 53,197 | | |
Net adjustment to goodwill
|
| | | $ | 930 | | |
(in thousands)
|
| |
As of
March 31, 2021 |
| |||
Estimated transaction costs
|
| | | $ | 9,194 | | |
Estimated severance and bonus accrual
|
| | | | 548 | | |
Net adjustment to accrued expenses and other current liabilities
|
| | | $ | 9,742 | | |
(in thousands)
|
| |
KushCo
Common Stock |
| |
Greenlane
Class A Common Stock |
| |
Greenlane
Class B Common Stock |
| |
Greenlane
Class C Common Stock |
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| ||||||||||||||||||
Elimination of KushCo historical
stockholders’ equity(1) |
| | | $ | (159) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (275,979) | | | | | $ | 150,142 | | |
Conversion of Greenlane Class C to
Class B Common Stock(2) |
| | | | — | | | | | | — | | | | | | 2 | | | | | | (7) | | | | | | 5 | | | | | | — | | |
Estimated value of Greenlane
Class A stock and equity awards issued as consideration(3) |
| | | | — | | | | | | 409 | | | | | | — | | | | | | — | | | | | | 222,970 | | | | | | — | | |
Transaction costs (4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (9,194) | | |
Severance benefits(5)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (548) | | |
Acceleration of Greenlane’s stock
compensation awards(6) |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,194 | | | | | | (5,194) | | |
Excess fair value of Greenlane
Class A stock replacement equity awards over KushCo replaced awards(7) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 29 | | | | | | (29) | | |
Net adjustment to stockholders’ equity
|
| | | $ | (159) | | | | | $ | 409 | | | | | $ | 2 | | | | | $ | (7) | | | | | $ | (47,781) | | | | | $ | 135,177 | | |
(in thousands)
|
| |
Year ended
December 31, 2020 |
| |
Three months ended
March 31, 2021 |
| ||||||
Elimination of KushCo’s historical intangible assets amortization
|
| | | $ | (893) | | | | | $ | (129) | | |
Amortization of purchased identifiable intangible assets
|
| | | | 5,480 | | | | | $ | 1,370 | | |
Net adjustment to intangible asset amortization expense
|
| | | $ | 4,587 | | | | | $ | 1,241 | | |
| | |
Three months ended
March 31, 2021 |
| |
Year ended
December 31, 2020 |
| ||||||
Numerator: | | | | | | | | | | | | | |
Pro forma net loss attributable to Greenlane Holdings, Inc.
|
| | | $ | (9,606) | | | | | $ | (107,939) | | |
Denominator: | | | | | | | | | | | | | |
Greenlane’s historical weighted average shares of Class
A common stock outstanding – basic and diluted |
| | | | 15,263 | | | | | | 11,947 | | |
Issuance of shares Greenlane Class A common stock to
KushCo common stock shareholders as consideration |
| | | | 40,891 | | | | | | 40,891 | | |
Pro forma weighted average shares outstanding
− basic and diluted |
| | | | 56,154 | | | | | | 52,838 | | |
Pro forma net loss per share of Class A common stock
− basic and diluted |
| | | $ | (0.17) | | | | | $ | (2.04) | | |
| | |
Page
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Terms
|
| |
Section
|
|
Action | | | 4.1(g)(i)(A) | |
Affiliate | | | 8.9 | |
Agreement | | | Preamble | |
Anti-Money Laundering Laws | | | 4.1(w) | |
Bankruptcy and Equity Exception | | | 4.1(c)(i) | |
Base Exchange Ratio | | | 8.9 | |
Book-Entry Share | | | 3.1(a) | |
business day | | | 8.9 | |
Certificate | | | 3.1(a) | |
Closing | | | 1.2 | |
Closing Date | | | 1.2 | |
COBRA | | | 8.9 | |
CoC Rule | | | 5.9 | |
Code | | | Recitals | |
Company | | | Preamble | |
Company Acceptable Confidentiality Agreement | | | 8.9 | |
Company Acquisition Proposal | | | 5.2(g)(i) | |
Company Adverse Recommendation Change | | | 5.2(c) | |
Company Alternative Acquisition Agreement | | | 5.2(a) | |
Company Applicable Date | | | 4.1(e)(i) | |
Company Approvals | | | 4.1(d)(i) | |
Company Benefit Plans | | | 4.1(h)(i) | |
Company Change Notice | | | 5.2(d) | |
Company Designees | | | 2.8(a) | |
Company Disclosure Letter | | | 4.1 | |
Company Equity Award | | | 8.9 | |
Company Insurance Policies | | | 4.1(p) | |
Company Intervening Event | | | 5.2(g)(ii) | |
Company Material Adverse Effect | | | 8.9 | |
Company Material Contracts | | | 4.1(t) | |
Company Option | | | 8.9 | |
Company Parties | | | 7.5(b) | |
Company Reports | | | 4.1(e)(i) | |
Company Stockholders Meeting | | | 5.5(a) | |
Company Superior Proposal | | | 5.2(g)(iii) | |
Company Tax Certificate | | | 5.7(b) | |
Company Tax Counsel | | | 6.3(c) | |
Company Termination Fee | | | 8.9 | |
Company Warrants | | | 3.5 | |
Confidentiality Agreement | | | 8.9 | |
Terms
|
| |
Section
|
|
Contract | | | 4.1(d)(ii)(B) | |
Costs | | | 5.13(a) | |
COVID-19 | | | 8.9 | |
COVID-19 Measures | | | 8.9 | |
COVID-19 Reasonable Response | | | 8.9 | |
D&O Insurance | | | 5.13(c) | |
DEA | | | 4.1(i)(ii) | |
Delaware Secretary of State | | | 1.3 | |
DGCL | | | 4.1(s) | |
DLLCA | | | Recitals | |
Environmental Law | | | 8.9 | |
ERISA | | | 8.9 | |
Exchange Act | | | 4.1(d)(i) | |
Exchange Agent | | | 3.2(a) | |
Exchange Fund | | | 3.2(a) | |
Exchange Ratio | | | 3.1(a) | |
Excluded Share | | | 3.1(a) | |
Excluded Shares | | | 3.1(a) | |
FDA | | | 4.1(i)(ii) | |
First Articles of Merger | | | 1.3 | |
First Certificate of Merger | | | 1.3 | |
GAAP | | | 4.1(e)(iii) | |
GH LLC | | | 2.10(a) | |
GH LLC Agreement | | | 8.9 | |
Governmental Entity | | | 4.1(d)(i) | |
Hazardous Substance | | | 8.9 | |
HSR Act | | | 4.1(d)(i) | |
Indemnification Agreements | | | 5.13(b) | |
Indemnified Parties | | | 5.13(a) | |
Initial Designees | | | 2.8 | |
Initial Surviving Corporation | | | 1.1(a) | |
Initial Surviving Corporation Share | | | 3.1(c) | |
Intellectual Property | | | 8.9 | |
IT Assets | | | 8.9 | |
knowledge | | | 8.9 | |
Laws | | | 4.1(i)(i) | |
Lien | | | 4.1(b)(iii) | |
Measurement Date | | | 4.1(b)(i)(A) | |
Merger 1 | | | Recitals | |
Merger 1 Effective Time | | | 1.3 | |
Merger 2 | | | Recitals | |
Merger 2 Effective Time | | | 1.3 | |
Merger Consideration | | | 3.1(a) | |
Terms
|
| |
Section
|
|
Merger Sub 1 | | | Preamble | |
Merger Sub 2 | | | Preamble | |
Merger Subs | | | Preamble | |
Mergers | | | Recitals | |
NASDAQ | | | 2.8(a) | |
Nevada Secretary of State | | | 1.3 | |
New Plans | | | 5.11(b) | |
NRS | | | Recitals | |
Old Plans | | | 5.11(b) | |
Ordinary Course of Business | | | 8.9 | |
Parent | | | Preamble | |
Parent Acceptable Confidentiality Agreement | | | 8.9 | |
Parent Acquisition Proposal | | | 5.3(g)(i) | |
Parent Adverse Recommendation Change | | | 5.3(c) | |
Parent Alternative Acquisition Agreement | | | 5.3(a) | |
Parent Applicable Date | | | 4.2(e)(i) | |
Parent Approvals | | | 4.2(d)(i) | |
Parent Board | | | Recitals | |
Parent Benefit Plans | | | 4.2(h)(i) | |
Parent Certificate of Incorporation | | | 2.1 | |
Parent Change Notice | | | 5.3(d) | |
Parent Charter Amendment | | | 8.9 | |
Parent Charter Amendment Approval | | | 8.9 | |
Parent Class A Common Stock | | | 2.9 | |
Parent Class B Common Stock | | | 4.2(b)(i)(B) | |
Parent Class C Common Stock | | | 4.2(b)(i)(C) | |
Parent Class C Conversion | | | 8.9 | |
Parent Common Stock | | | 4.2(b)(i)(C) | |
Parent Designees | | | 2.8(b) | |
Parent Disclosure Letter | | | 4.2 | |
Parent Equity Awards | | | 8.9 | |
Parent Insurance Policies | | | 4.2(p) | |
Parent Intervening Event | | | 5.3(g)(ii) | |
Parent Material Adverse Effect | | | 8.9 | |
Parent Material Contracts | | | 4.2(t) | |
Parent Option | | | 8.9 | |
Parent Parties | | | 7.5(c) | |
Parent Reports | | | 4.2(e)(i) | |
Parent Restricted Stock | | | 8.9 | |
Parent Share Issuance | | | 8.9 | |
Parent Share Issuance Approval | | | 8.9 | |
Parent Special Committee | | | Recitals | |
Parent Stockholders Meeting | | | 5.5(b) | |
Terms
|
| |
Section
|
|
Parent Superior Proposal | | | 5.3(g)(iii) | |
Parent Tax Certificate | | | 5.7(b) | |
Parent Tax Counsel | | | 6.2(c) | |
Parent Termination Fee | | | 8.9 | |
Payoff Letter | | | 6.2(e) | |
Permits | | | 4.1(i)(ii) | |
Permitted Liens | | | 8.9 | |
Person | | | 8.9 | |
Personal Information | | | 8.9 | |
Prospectus/Proxy Statement | | | 5.4(a) | |
Regulatory Fee Threshold | | | 5.12(b) | |
Representative | | | 8.9 | |
Requested Transactions | | | 2.10(b) | |
Requisite Company Vote | | | 4.1(c)(i) | |
Requisite Parent Vote | | | 8.9 | |
S-4 Registration Statement | | | 5.4(a) | |
SEC | | | 4.1 | |
Second Articles of Merger | | | 1.3 | |
Second Certificate of Merger | | | 1.3 | |
Section 754 Election | | | 4.2(l)(xvi) | |
Securities Act | | | 4.1(d)(i) | |
Share | | | 3.1(a) | |
Shares | | | 3.1(a) | |
Specified Indebtedness | | | 6.2(e) | |
Subsidiary | | | 8.9 | |
Surviving Company | | | 1.1(b) | |
Takeover Statute | | | 4.1(j) | |
Tax Return | | | 8.9 | |
Tax; Taxes | | | 8.9 | |
Termination Date | | | 7.2(a) | |
Transaction Litigation | | | 5.15 | |
USDA | | | 4.1(i)(ii) | |
WARN Act | | | 4.1(n)(iv) | |
Willful Breach | | | 8.9 | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Aaron LoCascio
Aaron LoCascio
|
| | Chief Executive Officer (Principal Executive Officer) | | |
July 1, 2021
|
|
|
/s/ William Mote
William Mote
|
| | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | |
July 1, 2021
|
|
|
/s/ Adam Schoenfeld
Adam Schoenfeld
|
| | Chief Strategy Officer and Director | | |
July 1, 2021
|
|
|
/s/ Neil Closner
Neil Closner
|
| | Director | | |
July 1, 2021
|
|
|
/s/ Richard Taney
Richard Taney
|
| | Director | | |
July 1, 2021
|
|
|
/s/ Jeff Uttz
Jeff Uttz
|
| | Director | | |
July 1, 2021
|
|
|
Exhibit
Index |
| |
Description of Document
|
|
| 10.22 | | | Voting Agreement, dated as of March 31, 2021, by and among Nicholas Kovacevich, Greenlane Holdings, Inc. and KushCo Holdings, Inc. (Incorporated by reference to Exhibit 10.2 to Greenlane's Current Report on Form 8-K, filed April 1, 2021). | |
| 10.23 | | | Voting Agreement, dated as of March 31, 2021, by and among Dallas Imbimbo, Greenlane Holdings, Inc. and KushCo Holdings, Inc. (Incorporated by reference to Exhibit 10.3 to Greenlane's Current Report on Form 8-K, filed April 1, 2021). | |
| 21.1 | | | | |
| 23.1 | | | | |
| 23.2 | | | | |
| 23.3 | | | | |
| 99.1* | | | | |
| 99.2* | | | | |
| 99.4 | | | | |
| 99.5 | | | | |
| 99.6* | | | | |
| 99.7* | | | | |
| 99.8* | | | | |
| 99.9* | | | | |
| 99.10* | | | | |
| 99.11* | | | | |
| 99.12* | | | |
Exhibit 5.1
2100 L Street, NW
Telephone: 202.887.1500
www.mofo.com |
morrison & foerster llp
beijing, berlin, boston, brussels,
|
July 1, 2021
Board of Directors
Greenlane Holdings, Inc.
1095 Broken Sound Parkway, Suite 300
Boca Raton, Florida 33487
Re: Registration Statement on Form S-4, as amended
Ladies and Gentlemen:
We are acting as counsel to Greenlane Holdings, Inc., a Delaware corporation (the “Company”), in connection with the Registration Statement on Form S-4, as amended (File No. 333-256582) (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the issuance of up to 51,454,940 shares of Class A common stock, par value $0.01 per share, of the Company (the “Shares”), in connection with the Agreement and Plan of Merger, dated as of March 31, 2021, by and among the Company, Merger Sub Gotham 1, LLC, Merger Sub Gotham 2, LLC and KushCo Holdings, Inc. (the “Merger Agreement”).
For purposes of this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion and we are familiar with the proceedings taken and proposed to be taken by the Company in with the authorization and issuance of the Shares. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. This opinion letter is given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the Delaware General Corporation Law, as amended. We express no opinion herein as to any other laws, statutes, ordinances, rules, or regulations. As used herein, the term “Delaware General Corporation Law, as amended” includes the statutory provisions contained therein, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting these laws.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that following (i) the effectiveness of the Registration Statement and (ii) the issuance of the Shares pursuant to the terms of the Merger Agreement, the Shares will be validly issued, fully paid and non-assessable.
This opinion is furnished to you in connection with the filing by the Company of the Registration Statement and may not be relied upon for any other purpose without our express written consent. No opinion may be implied or inferred beyond the opinion expressly stated. This opinion is given as of the date hereof, and we assume no obligation to advise you of any changes in applicable law or any facts or circumstances that come to our attention after the date hereof that may affect the opinion contained herein.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm contained under the heading “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations promulgated by the Commission.
Very truly yours, | |
/s/ Morrison & Foerster LLP | |
Morrison & Foerster LLP |
Exhibit 8.1
Reed Smith llp
+1 212 521 5400 Fax +1 212 521 5450 reedsmith.com |
July 1, 2021
KushCo Holdings, Inc.
6261 Katella Avenue, Suite 250
Cypress CA 90630
Ladies and Gentlemen:
We have acted as counsel to KushCo Holdings, Inc., a Nevada corporation (the “Company”), in connection with the preparation of the Registration Statement on Form S-4 filed May 28, 2021, Registration No. 333-25682 (the “Registration Statement”), as amended and supplemented through the date hereof, with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Act”). The Registration Statement relates to the Mergers (as defined below), as contemplated in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 31, 2021, by and among the Company, Greenlane Holdings, Inc., a Delaware Corporation (“Parent”), Merger Sub Gotham 1, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Parent (“Merger Sub 1”), and Merger Sub Gotham 2, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Parent (“Merger Sub 2”). At your request, we are rendering this opinion concerning the qualification of the Mergers, taken together, as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), for filing as Exhibit 8.1 to the Registration Statement. Unless otherwise indicated, capitalized terms used herein shall have the meanings set forth in the Merger Agreement.
Pursuant to the Merger Agreement, (i) at the Merger 1 Effective Time, Merger Sub 1 will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (“Merger 1”); (ii) at the Merger 2 Effective Time, the Company, as the surviving corporation in Merger 1, will merge with and into Merger Sub 2, with Merger Sub 2 surviving as a wholly-owned subsidiary of Parent (“Merger 2,” and together with Merger 1, the “Mergers”); and (iii) immediately following the Merger 2 Effective Time, Parent will contribute all of the limited liability company interests in Merger Sub 2 to Greenlane Holdings, LLC (“GH LLC”), a Delaware limited liability company and a direct subsidiary of Parent (the “Contribution”).
In rendering the opinion set forth below, we have examined and relied upon the accuracy and completeness (which we have neither independently investigated nor verified) of the facts, information, statements, representations, warranties and covenants contained in the originals or copies, certified or otherwise, identified to our satisfaction, of the Merger Agreement, including the exhibits thereto, the Registration Statement, each as amended or supplemented through the date hereof, and such other documents as we have deemed necessary or appropriate to enable us to render the opinion set forth below. We have also relied, with the consent of the Company, upon statements and representations made by officers of each of the Company and Parent (and Merger Sub 1 and Merger Sub 2), including in their respective letters delivered to us for purposes of rendering our opinion (collectively, the “Tax Certificates”), and have assumed that the Tax Certificates will be complete and accurate as of the Merger 1 Effective Time, Merger 2 Effective Time and the effective time of the Contribution, and that all such statements and representations made to the knowledge of any person or entity or with similar qualification are and will be accurate and complete as if made without such qualification. Our opinion is expressly conditioned on, among other things, the accuracy and completeness, both initially and continuing as of the Merger 1 Effective Time, Merger 2 Effective Time and the effective time of the Contribution, of the facts, information, statements, representations, warranties, covenants and assumptions set forth in the documents referred to above.
ABU
DHABI ¨ ATHENS ¨
BEIJING ¨ BRUSSELS
¨ CENTURY CITY ¨
CHICAGO ¨ DALLAS
¨ DUBAI ¨
FRANKFURT ¨ HONG
KONG
HOUSTON ¨ KAZAKHSTAN ¨
LONDON ¨ LOS
ANGELES ¨ MIAMI ¨
MUNICH ¨ NEW
YORK ¨ PARIS ¨
PHILADELPHIA ¨ PITTSBURGH
¨ PRINCETON
RICHMOND ¨ SAN FRANCISCO
¨ SHANGHAI ¨
SILICON VALLEY ¨
SINGAPORE ¨ TYSONS
¨ WASHINGTON, D.C. ¨
WILMINGTON
KushCo Holdings, Inc. Page 2 |
For purposes of this opinion, we have assumed that the Mergers and the Contribution will be consummated in the manner described in the Merger Agreement and the Registration Statement and that none of the terms and conditions contained therein have been waived or modified in any respect.
In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such latter documents. In making our examination of documents executed, or to be executed, by the parties indicated therein, we have assumed that each party has, or will have, the power, corporate or other, to enter into and perform all obligations thereunder and we have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by each party indicated in the documents and that such documents constitute, or will constitute, valid and binding obligations of each party.
Our opinion is based upon the applicable provisions of the Code, Treasury regulations promulgated thereunder, pertinent judicial authorities, interpretive rulings of the Internal Revenue Service (“IRS”) and such other authorities as we have considered relevant, all as in effect on the date hereof and all of which are subject to change at any time (possibly with retroactive effect). Additionally, our opinion is not binding on the IRS or the courts and no rulings have been requested or received from the IRS as to any of the matters discussed herein. Accordingly, there can be no assurance that positions contrary to our opinion will not be taken by the IRS, or if challenged, by a court. In addition, a change in any of the authorities, or the inaccuracy or failure to be complete, of any of the facts, information, documents, corporate records, covenants, warranties, statements, representations or assumptions upon which our opinion is based could affect our conclusions expressed herein.
Based on our examination of the foregoing items and subject to the assumptions, limitations and qualifications set forth herein and in the Registration Statement, we are of the opinion, under current applicable U.S. federal income tax law, that the Mergers, taken together, will constitute a reorganization within the meaning of Section 368(a) of the Code.
Except as expressly set forth above, we express no other opinion. This opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise our opinion to reflect any changes (including changes that have retroactive effect) in applicable law or in any fact, information, document, corporate record, covenant, warranty, statement, representation or assumption stated herein which becomes untrue, incomplete or incorrect. Any such change may affect the conclusions stated herein.
KushCo Holdings, Inc. Page 3 |
This opinion has been prepared solely in connection with the Merger Agreement and the filing of the Registration Statement and may not be relied upon for any other purpose without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the use of our name wherever appearing in the Registration Statement in connection with the material U.S. federal income tax consequences of the Mergers. In giving this consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission issued thereunder.
Very truly yours, | |
/s/ Reed Smith LLP | |
Reed Smith LLP |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement No. 333-256582 on Amendment 1 to Form S-4 of our report dated March 31, 2021, relating to the financial statements of Greenlane Holdings, Inc. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Boca Raton, Florida
July 1, 2021
Exhibit 23.2
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of Greenlane Holdings, Inc. on Form S-4 Amendment No. 1 File No. 333-256582 of our report dated November 10, 2020 with respect to our audits of the consolidated financial statements of KushCo Holdings, Inc. as of August 31, 2020 and 2019 and for the years ended August 31, 2020 and 2019, which report appears in the Joint Proxy Statement / Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Joint Proxy Statement / Prospectus.
Our report on the consolidated financial statements refers to a change in the method of accounting for leases effective September 1, 2019.
/s/ Marcum llp
Marcum llp
Costa Mesa, California
July 1, 2021
Exhibit 99.4
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D57195-P59657 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! For Against Abstain For Against Abstain For Against Abstain For Against Abstain For Against Abstain For Against Abstain For Against Abstain 1b. Adam Schoenfeld Nominees: 1a. Aaron LoCascio 1e. Jeff Uttz 1c. Neil Closner 1d. Richard Taney 3. Approval and adoption of the definitive agreement and plan of merger (the "Merger Agreement"), dated as of March 31, 2021, by and among Greenlane, Merger Sub Gotham 1, LLC, a wholly-owned subsidiary of Greenlane ("Merger Sub 1"), Merger Sub Gotham 2, LLC, a wholly owned subsidiary of Greenlane ("Merger Sub 2") and KushCo Holdings, Inc. ("KushCo"). Pursuant to the Merger Agreement, Greenlane and KushCo will combine through a merger of Merger Sub 1 with and into KushCo with KushCo as the surviving corporation and a wholly owned subsidiary of Greenlane ("Initial Surviving Corporation") (such merger, "Merger 1") and a merger of the Initial Surviving Corporation with and into Merger Sub 2 with Merger Sub 2 as the surviving limited liability company and a wholly owned subsidiary of Greenlane ("Merger 2," and, together with Merger 1, the "Mergers") (the "Greenlane Merger Proposal"). 2. Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2021. 4. Approval and adoption of the Amended and Restated Certificate of Incorporation of Greenlane Holdings, Inc. (the "Greenlane Charter Amendment Proposal"). 7. Approval of one or more adjournments of the Greenlane annual meeting to another date, time and/or place, if necessary or appropriate, to solicit additional proxies in favor of the Greenlane Merger Proposal, the Greenlane Charter Amendment Proposal or the Greenlane Stock Issuance Proposal. 5. Approval of the issuance of Greenlane Class A common stock in connection with the closing of Merger 1 (the "Greenlane Stock Issuance Proposal"). 6. Approval of the Amended and Restated Greenlane Holdings, Inc. 2019 Equity Incentive Plan (the "Greenlane Plan Proposal"). 1. Election of Directors GREENLANE HOLDINGS, INC. The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: NOTE: We may conduct such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. GREENLANE HOLDINGS, INC. 1095 BROKEN SOUND PARKWAY SUITE 300 BOCA RATON, FL 33847 The Board of Directors recommends you vote FOR the following proposal: VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com. D57196-P59657 GREENLANE HOLDINGS, INC. ANNUAL MEETING OF STOCKHOLDERS August 26, 2021 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Aaron LoCascio and Douglas Fischer, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Greenlane Holdings, Inc. that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Time on August 26, 2021, at our corporate offices located at 1095 Broken Sound Parkway, Suite 300, Boca Raton, Florida 33487, and any adjournment or postponement thereof. The Company's Board of Directors recommends a vote "FOR" Proposals 1, 2, 3, 4, 5, 6, and 7. For the proposals set forth on this proxy, you may vote "FOR" or "AGAINST," or you may ABSTAIN from voting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. CONTINUED AND TO BE SIGNED ON REVERSE SIDE |
Exhibit 99.5
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D57343-S28015 2. A proposal to approve one or more adjournments of the KushCo special meeting to another date, time and/or place, if necessary or appropriate, to solicit additional proxies in favor of the KushCo Merger Proposal (the "KushCo Adjournment Proposal"). 1. A proposal to consider and vote upon the approval of the definitive agreement and plan of merger (the "Merger Agreement"), dated as of March 31, 2021, by and among Greenlane Holdings, Inc. ("Greenlane"), Merger Sub Gotham 1, LLC, a wholly owned subsidiary of Greenlane ("Merger Sub 1"), Merger Sub Gotham 2, LLC, a wholly owned subsidiary of Greenlane ("Merger Sub 2"), and KushCo. Pursuant to the Merger Agreement, Greenlane and KushCo will combine through a merger of Merger Sub 1 with and into KushCo with KushCo as the surviving corporation and a wholly owned subsidiary of Greenlane ("Initial Surviving Corporation") (such merger, "Merger 1"), and a merger of the Initial Surviving Corporation with and into Merger Sub 2 with Merger Sub 2 as the surviving limited liability company and a wholly owned subsidiary of Greenlane ("Merger 2," and, together with Merger 1, the "Mergers") (the "KushCo Merger Proposal"); and For Against Abstain ! ! ! KUSHCO HOLDINGS, INC. KUSHCO HOLDINGS, INC. 6261 KATELLA AVE., SUITE 250 CYPRESS, CA 90630 The Board of Directors recommends you vote FOR proposals 1 and 2. NOTE: Such other business as may properly come before the Special Meeting and any adjournments or postponements thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. ! ! ! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on August 25, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/KSHB2021SM You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on August 25, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Proxy Statement is available at www.proxyvote.com. D57344-S28015 KUSHCO HOLDINGS, INC. Special Meeting of Stockholders August 26, 2021, 12:00 PM (EASTERN TIME) This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Nicholas Kovacevich and Stephen Christoffersen, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of KUSHCO HOLDINGS, INC. that the stockholder(s) is/are entitled to vote at the Special Meeting of Stockholders to be held at 12:00 p.m., Eastern Time, on Thursday, August 26, 2021, virtually at www.virtualshareholdermeeting.com/KSHB2021SM. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side |