SCHEDULE 13G: Altium Capital Management Discloses 9.99% Stake in Greenlane Holdings, Inc.

Altium Capital Management LLC and its affiliates have disclosed a 9.99% beneficial ownership stake in Greenlane Holdings, Inc. Class A Common Stock, including shares from pre-funded warrants.

Summary

• Altium Capital Management LLC, Altium Healthcare Long Short Onshore Fund LP, and Altium Healthcare Long Short GP LLC jointly filed a Schedule 13G.
• The reporting persons collectively beneficially own 2,521,009 shares of Greenlane Holdings, Inc. Class A Common Stock.
• This ownership represents 9.99% of the outstanding Class A Common Stock of Greenlane Holdings, Inc.
• The beneficially owned amount includes 721,009 shares of Common Stock and 1,800,000 shares issuable upon conversion of Pre-Funded Warrants.
• A 'Warrant Blocker' prevents the reporting persons from exercising Pre-Funded Warrants if it would result in beneficial ownership exceeding 9.99% of the outstanding shares.
• The reported beneficial ownership does not include an additional 2,521,009 shares from Series A Warrants and 2,521,009 shares from Series B Warrants.
• Series A Warrants and Series B Warrants are subject to 4.99% and 9.99% beneficial ownership limitations, respectively, and are not yet registered or exercisable.
• The percentage of class is calculated based on 8,336,953 shares of Common Stock outstanding as of February 21, 2025, as reported in Greenlane's Pre 14A Statement.
• The securities were acquired and are held without the purpose or effect of changing or influencing the control of the issuer, other than activities solely in connection with a nomination under Rule 14a-11.

Sentiment

Score: 7

Explanation: The disclosure of a significant stake by an institutional investor is generally positive, indicating confidence in the company. However, the complexity of the warrant structure and potential future dilution from unregistered warrants introduce some uncertainty.

Positives

• A significant institutional investor, Altium Capital Management, has taken a substantial 9.99% stake in Greenlane Holdings, Inc., which could be interpreted as a vote of confidence in the company's prospects.
• The investment includes pre-funded warrants, suggesting a strategic or long-term investment approach by Altium.

Negatives

• The existence of a 9.99% 'Warrant Blocker' and additional Series A and B Warrants with beneficial ownership limitations indicates complexities in the capital structure.
• The fact that Series A and B Warrants, representing a substantial number of potential shares (over 5 million), are not yet registered and exercisable could lead to future dilution for existing shareholders if they are converted.

Risks

• Dilution Risk: Future exercise of Series A and Series B Warrants, if they become registered and exercisable, could lead to significant dilution for existing shareholders, as they represent an additional 5,042,018 shares (2,521,009 each).
• Beneficial Ownership Limitations: The 9.99% 'Warrant Blocker' and the 4.99%/9.99% limitations on Series A/B Warrants restrict the immediate full conversion of all potential shares, which could impact liquidity or control dynamics.
• Market Perception: The existence of multiple warrant series and beneficial ownership limitations might be perceived as complex by the market, potentially affecting investor sentiment.

Future Outlook

The document does not provide forward-looking statements or guidance from Greenlane Holdings, Inc. It is a regulatory disclosure of beneficial ownership by an external entity, Altium Capital Management LLC and its affiliates.

Management Comments

• Jacob Gottlieb, CEO of Altium Capital Management LLC and Managing Member of Altium Healthcare Long Short GP LLC, certified that the securities were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer, other than activities solely in connection with a nomination under Rule 14a-11.

Industry Context

This filing indicates a significant investment by a healthcare-focused fund (Altium Healthcare Long Short Onshore Fund LP) in Greenlane Holdings, Inc., a company operating in the cannabis accessory and consumption product space. Such a substantial stake by an institutional investor can be seen as a vote of confidence in the company's long-term prospects within its industry, potentially signaling a belief in the evolving regulatory landscape for cannabis-related businesses or the company's specific market position.

Comparison to Industry Standards

• This document is a standard Schedule 13G filing, which is a regulatory disclosure required when beneficial ownership of a company's stock exceeds 5%.
• The 9.99% stake disclosed by Altium Capital Management is a substantial position for an institutional investor, indicating a significant commitment to Greenlane Holdings, Inc. While direct comparisons to specific competitor investments are not provided in the document, such a large stake is generally noteworthy within any industry.

Stakeholder Impact

• Shareholders: The entry of a significant institutional investor like Altium Capital Management could be viewed positively, potentially increasing investor confidence and signaling long-term interest. However, the future exercise of the substantial Series A and B Warrants could lead to dilution of existing shareholdings.
• Company (Greenlane Holdings, Inc.): The initial investment by Altium provided capital to the company. The continued holding of a significant stake by an institutional investor can provide stability and market validation.

Next Steps

• Monitoring if and when the Series A and Series B Warrants become registered and exercisable, and their potential impact on Greenlane Holdings' share structure.
• Observing any future changes in Altium Capital Management's beneficial ownership stake in Greenlane Holdings, Inc. through subsequent SEC filings.

Key Dates

Keywords

Greenlane Holdings, Altium Capital Management, Schedule 13G, Beneficial Ownership, Class A Common Stock, Pre-Funded Warrants, Series A Warrants, Series B Warrants, Institutional Investment, SEC Filing, Equity Stake