Greenlane announces $6.5 million private placement

BOCA RATON, FL - Greenlane Holdings, Inc. (NASDAQ:GNLN), a global seller of cannabis accessories and vaporization products, today disclosed a securities purchase agreement with an institutional investor, aimed at raising $6.5 million. The private placement, expected to close on Tuesday, involves issuing over 2.3 million units, which include common stock shares and warrants.

The funds from this transaction are intended for working capital and general corporate purposes. Each unit, priced equally, comprises one common stock share or a pre-funded warrant, and two common warrants with an exercise price of $2.50 per share, exercisable five years from the initial exercise date.

Aegis Capital Corp. is the exclusive placement agent for this private placement, while Sichenzia Ross Ference Carmel LLP and Kaufman & Canoles, P.C. serve as legal counsel to Greenlane and Aegis respectively.

The securities offered in this private placement are exempt from registration under the Securities Act of 1933, as amended, and will not be registered under this act or any state securities laws. Consequently, they cannot be offered or sold in the United States without registration or an exemption. Greenlane has agreed to file registration statements with the SEC for the resale of the common stock shares and shares issuable upon the exercise of the pre-funded warrants and warrants.

In other recent news, Greenlane Holdings has announced a one-for-11 reverse stock split of its Class A common stock. This move is intended to meet Nasdaq's minimum bid price requirement. The reverse split, which was approved by stockholders, will decrease the number of issued and outstanding shares from approximately 5.8 million to around 0.5 million.

The reverse split will also adjust outstanding options, restricted stock awards, warrants, and other securities tied to Class A common stock. The Third Amended and Restated 2019 Equity Incentive Plan will likewise see its available shares adjusted.

InvestingPro Insights

As Greenlane Holdings, Inc. (NASDAQ:GNLN) navigates its latest private placement to bolster working capital and general corporate functions, the company's financial health and stock performance metrics provide a backdrop for investors considering their position. With a market capitalization of just over $10 million, Greenlane is operating on a relatively small scale in the cannabis accessories and vaporization market. The company's Price/Book ratio as of the last twelve months leading into Q1 2024 stands at a modest 0.19, which might suggest that the stock is trading at a low valuation relative to the company's book value.

However, concerns may arise from the company's significant debt burden and its struggles with profitability. InvestingPro Tips indicate that Greenlane may have trouble making interest payments on its debt, which is a critical consideration for investors. Additionally, the company does not pay a dividend, which can be a deterrent for those seeking income-generating investments. On the brighter side, analysts anticipate sales growth in the current year, which could signal a potential turnaround or improved financial performance ahead.

Investors should also note the stock's high price volatility, which has been evident in the significant return over the last week, with a price total return of 14.4%. However, the longer-term picture shows the stock price has fallen significantly over the last year, with a one-year price total return of -74.76%. Given these mixed signals, investors may benefit from the additional 16 InvestingPro Tips available on the platform, which provide deeper insights into Greenlane's financial health and stock performance.

For those interested in keeping a close eye on Greenlane's future financial results, the next earnings date is set for August 15, 2024. With the fair value of Greenlane's stock estimated at $3.33 according to InvestingPro, current and prospective shareholders have critical data points to consider as they assess the company's prospects in a dynamic and growing industry.

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