Greenlane Announces Board’s Approval of Reverse Stock Split Ratio

Rhea-AI Summary

Greenlane Holdings (NASDAQ:GNLN) has announced a one-for-11 reverse stock split of its Class A common stock, effective August 5, 2024. This move is primarily aimed at maintaining Nasdaq listing compliance. The reverse split will reduce the number of issued and outstanding shares from approximately 5.8 million to 0.5 million. Greenlane's stockholders approved this action at a special meeting on July 29, 2024, authorizing the board to implement a split ratio between one-for-two and one-for-20. The board chose the one-for-11 ratio on July 23, 2024. This action will affect all outstanding shares, options, restricted stock awards, warrants, and other securities, with adjustments made accordingly. No fractional shares will be issued, and stockholders entitled to fractional shares will receive rounded-up whole numbers.

Positive

• Potential to maintain Nasdaq listing compliance
• Stockholder approval obtained for the reverse stock split
• No change in authorized number of shares or par value

Negative

• Significant reduction in outstanding shares from 5.8 million to 0.5 million
• Potential dilution of shareholder value due to rounding up of fractional shares

Insights

Financial Analyst

Greenlane's announcement of a 1-for-11 reverse stock split is a significant development that warrants careful analysis. This move is primarily aimed at maintaining the company's Nasdaq listing by meeting the minimum bid price requirement, which is important for investor confidence and market visibility.

The reduction in outstanding shares from approximately 5.8 million to 0.5 million will likely lead to an immediate increase in the stock price, potentially by a factor of 11. However, it's important to note that this doesn't change the company's underlying value or market capitalization. Instead, it's a cosmetic change that could have both positive and negative implications:

• Positive: Higher share price may attract institutional investors and reduce the risk of delisting.
• Negative: It could be perceived as a sign of financial distress, potentially deterring some investors.

The timing of this move, amidst challenging market conditions for cannabis-related businesses, suggests Greenlane is taking proactive steps to maintain its market position. However, investors should be cautious and look beyond this corporate action to assess the company's fundamental performance, growth strategies and ability to navigate regulatory challenges in the cannabis accessories market.

While the reverse split doesn't directly impact Greenlane's financial health, it does reflect the company's struggle to maintain a share price above Nasdaq's $1 minimum bid requirement. This could indicate underlying challenges in the business model or market conditions that investors should scrutinize carefully.

Market Research Analyst

Greenlane's reverse stock split decision comes at a critical juncture for the cannabis accessories market. As a global seller of premium cannabis accessories and vaporization products, Greenlane's strategic move reflects broader industry trends and challenges:

• Market Saturation: The cannabis accessories market has seen increased competition, potentially squeezing margins for players like Greenlane.
• Regulatory Landscape: Evolving cannabis regulations across different jurisdictions continue to impact the entire supply chain, including accessory providers.
• Consumer Behavior Shifts: Changes in consumption patterns, particularly post-pandemic, may be affecting demand for premium accessories.

The reverse split could be seen as a defensive move in a challenging market environment. It's worth noting that Greenlane's diverse brand portfolio, including owned brands like Higher Standards and licensed brands like Marley Natural, provides some resilience. However, the need for this corporate action suggests that the company may be facing headwinds in translating its brand strength into sustained financial performance.

Investors should closely monitor how this move impacts Greenlane's market perception and its ability to attract capital. The success of this strategy will largely depend on the company's ability to leverage its omnichannel distribution platform and brand accelerator model to drive growth in a competitive landscape. Keep an eye on upcoming financial reports to gauge whether this corporate restructuring is accompanied by operational improvements and revenue growth.

BOCA RATON, FL / ACCESSWIRE / July 31, 2024 / Greenlane Holdings, Inc. (NASDAQ:GNLN) ("Greenlane"), a global seller of premium cannabis accessories, child-resistant packaging, and specialty vaporization products, today announced that it will effect a one-for-11 reverse stock split ("reverse split") of its Class A common stock, par value $0.01 per share ("Class A common stock"), that will become effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening of trading on The Nasdaq Capital Market ("Nasdaq"). Greenlane has requested that Greenlane's Class A common stock begin trading on August 5, 2024, on a post-reverse split basis on the Nasdaq under the existing symbol "GNLN."

The reverse split is primarily intended to bring Greenlane into compliance with the minimum bid price requirement for maintaining its listing on the Nasdaq. The new CUSIP number for the Class A common stock following the reverse split will be 395330400.

At Greenlane's special meeting of stockholders on July 29, 2024 (the "Special Meeting"), Greenlane's stockholders approved the proposal to authorize Greenlane's board of directors (the "Board"), in its sole and absolute discretion, to file a certificate of amendment (the "Amendment") to Greenlane's amended and restated certificate of incorporation to effect the reverse split at a ratio to be determined by the Board, ranging from one-for-two to one-for-20. On July 23, 2024, the Board approved the reverse split at a ratio of one-for-11 and the Amendment has been filed with the Secretary of State of the State of Delaware, which will become effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening of trading on the Nasdaq.

The reverse split will affect all issued and outstanding shares of Class A common Stock. All outstanding options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of Class A common stock will be adjusted as a result of the reverse split, as required by the terms of each security. The number of shares available to be awarded under Greenlane's Third Amended and Restated 2019 Equity Incentive Plan, will also be appropriately adjusted. Following the reverse split, the par value of the Class A common stock will remain unchanged at $0.01 per share. The reverse split will not change the authorized number of shares of Class A common stock or preferred stock. No fractional shares of Class A Common Stock shall be issued as a result of the Reverse Split, and stockholders who otherwise would be entitled to receive fractional shares of New Class A Common Stock shall be entitled to receive the number of shares of New Class A Common Stock rounded up to the next whole number. The reverse split will affect all stockholders uniformly and will not alter any stockholder's percentage interest in Greenlane's equity (other than as a result of the rounding of fractional shares, as set forth above).

The reverse split will reduce the number of shares of Class A common stock issued and outstanding from approximately 5.8 million to approximately .5 million.

About Greenlane Holdings, Inc.

Founded in 2005, Greenlane is a premier global platform for the development and distribution of premium smoking accessories, vape devices, and lifestyle products to thousands of producers, processors, specialty retailers, smoke shops, convenience stores, and retail consumers. We operate as a powerful family of brands, third-party brand accelerator, and an omnichannel distribution platform.

We proudly offer our own diverse brand portfolio including Higher Standards and Groove, and our exclusively licensed Marley Natural and K.Haring branded products. We also offer a carefully curated set of third-party products such as DaVinci Vaporizers, Storz & Bickel, Eyce, Pax, VIBES, and CCELL through our direct sales channels and our proprietary, owned and operated e-commerce platforms which include Vapor.com, PuffItUp.com, HigherStandards.com, and MarleyNaturalShop.com.

For additional information, please visit: https://investor.gnln.com.

Forward Looking Statements

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. These forward-looking statements include, among others, statements relating to: the current and future performance of the Company's business, the Company's ability to satisfy the various rules and requirements imposed by The Nasdaq Stock Market, unforeseen technical issues that could result in Greenlane's Class A common stock not trading on The Nasdaq Stock Market on a post-reverse stock split basis on August 5, 2024 as expected and the Company's financial outlook and expectations. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the heading "Risk Factors" included in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2023, the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, and the Company's other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to Greenlane on the date hereof. Greenlane undertakes no duty to update this information unless required by law.

Investor Contact
ir@greenlane.com

or

TraDigital IR
Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com

SOURCE: Greenlane Holdings, Inc.

View the original press release on accesswire.com

FAQ

What is the reverse stock split ratio announced by Greenlane (GNLN)?

Greenlane (GNLN) announced a one-for-11 reverse stock split of its Class A common stock.

When will Greenlane's (GNLN) reverse stock split become effective?

Greenlane's (GNLN) reverse stock split will become effective on August 5, 2024, at 12:01 AM Eastern Time.

Why is Greenlane (GNLN) implementing a reverse stock split?

Greenlane (GNLN) is implementing the reverse stock split primarily to comply with Nasdaq's minimum bid price requirement for maintaining its listing.

How will the reverse split affect Greenlane's (GNLN) outstanding shares?

The reverse split will reduce Greenlane's (GNLN) outstanding Class A common shares from approximately 5.8 million to 0.5 million.