Greenlane sells assets to generate cash

Greenlane Holdings, Inc. (NASDAQ: GNLN) has announced plans to raise over $30 million in cash. Part of the company’s strategy to achieve this goal includes securing a loan to cover working capital needs, selling the company’s corporate headquarters in Boca Raton, Florida, and eliminating inventory. non-painful and low-margin. Greenlane has been through a series of struggles since the days when the company sold Juul vapes. When regulators cracked down on flavored vapes that appealed to teens, Greenlane lost a lot of business. She moved into cannabis accessories, but that wasn’t enough to make up for the lost business, and then the company merged with KushCo cannabis packaging. KushCo has had its own issues with the cannabis vape crisis, which has been followed by supply chain disruptions during the pandemic. Since then, the company has struggled to stabilize.

Get a loan

Greenlane said in a statement that over the past three months it has engaged in an intensive and comprehensive process to select the ideal asset-based lending partner that can meet its working capital needs. The company said it expects to sign a deal by the start of the third quarter of 2022, which is expected to result in more than $10 million in cash. As of the last quarter, the company had current liabilities of $77 million and total liabilities of $91 million. In December 2021, Greenlane entered into a secured promissory note with Aaron LoCascio, the company’s co-founder, former CEO, president and current director, in which LoCascio provided a bridge loan in the principal amount of 8.0 million which bears interest at a rate of 15% and is due monthly, with the principal amount due in full in June 2022.

Sale Building

Additionally, Greenlane put its headquarters up for sale in May 2022 and has garnered significant interest from several buyers amidst a Florida commercial real estate market. “Given management’s decision to transition to a hybrid working model, the company plans to lease the top floor to another tenant until the building is sold. Along with this initiative, the company is in the process of selling other non-core assets which, if sold with the building at management’s anticipated sale price, should generate an additional $10 million in cash.

Sell ​​inventory

Finally, the Company endeavors to sell, through its excess and obsolete (“E&O”) inventory, low-margin and non-strategic products, while reducing the overall level of inventory on hand. In May, the company launched its official in-house E&O sales program and has since sold over $1 million of previously reserved E&O inventory. Management expects proceeds from these E&O sales, combined with a general sale of other non-essential third-party brand inventory, to generate more than $10 million in cash for the company.

With all of these moves, Greenlane believes it can generate over $30 million in cash on a non-dilutive basis by the end of 2022 if all of these steps are successful.

“We are excited about the speed and scale of our efforts to generate significant non-dilutive cash, especially in the context of this challenging macroeconomic environment,” said Nick Kovacevich, CEO of Greenlane. “Given the current depressed state of the broader capital markets, we are extremely focused on fully executing this plan to generate the cash we need to run and grow the business.”

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