Item 8.01. Other Events.
As previously disclosed, on March 31, 2021, Greenlane Holdings, Inc. (the
"Company" or "Greenlane"), Merger Sub Gotham 1, LLC, a wholly owned subsidiary
of the Company ("Merger Sub 1"), and Merger Sub Gotham 2, LLC, a wholly owned
subsidiary of the Company ("Merger Sub 2" and, together with the Company and
Merger Sub I, the "Greenlane Parties"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") with KushCo Holdings, Inc. ("KushCo"). Pursuant
to the terms of the Merger Agreement, subject to the satisfaction or waiver of
certain conditions set forth in the Merger Agreement: (i) Merger Sub 1 will be
merged with and into KushCo with KushCo as the surviving corporation and a
wholly-owned subsidiary of the Company ("Initial Surviving Corporation")
("Merger 1"); and (ii) the Initial Surviving Corporation will then be merged
with and into Merger Sub 2 with Merger Sub 2 as the surviving limited liability
company and a wholly-owned subsidiary of the Company ("Merger 2," and together
with Merger 1, the "Mergers").
This Current Report on Form 8-K provides certain information with respect to the
proposed Mergers for the purpose of incorporating such information by reference
into the Company's registration statement on Form S-3 (Registration
No. 333-257654) filed under the Securities Act of 1933, as amended (the
"Securities Act"), and to update and supersede certain information previously
included in the Company's joint proxy statement/prospectus (the "Joint Proxy
Statement/Prospectus") that forms a part of its Registration Statement on
Form S-4 (Registration No. 333- 256582) (the "Form S-4") declared effective by
the Securities and Exchange Commission ("SEC") on July 2, 2021.
Specifically, this Current Report on Form 8-K provides: (1) KushCo's unaudited
condensed consolidated financial statements as of May 31, 2021 and for the three
and nine months ended May 31, 2021 and 2020, which are attached hereto as
Exhibit 99.1 (the "KushCo Q. 3 Financials"), (2) KushCo's audited consolidated
financial statements as of and for the year ended August 31, 2020, which were
previously filed as an exhibit to the Form S-4 that was declared effective by
the SEC on July 2, 2021, are included as Exhibit 99.2 hereto, (3) the Company's
unaudited pro forma condensed combined financial statements as of and for the
three months ended March 31, 2021 and for the year ended December 31, 2020 (the
"Updated Pro Forma Financials"), giving effect to the proposed Mergers, which
are attached hereto as Exhibit 99.3, (4) information regarding KushCo's
business, which is attached hereto as Exhibit 99.4, and (5) information
regarding litigation filed in connection with the Mergers, as set forth below.
The information in Exhibit 99.1, Exhibit 99.2 and Exhibit 99.4 was provided by
KushCo.
The KushCo Q. 3 Financials and the Updated Pro Forma Financials included as
Exhibits 99.1 and 99.3, respectively, to this Current Report on Form 8-K are
incorporated by reference into the Joint Proxy Statement/Prospectus and
supersede the information included therein. The Updated Pro Forma Financials
update the information under "Unaudited Pro Forma Condensed Combined Financial
Information" beginning on page F-2 of the Joint Proxy Statement/Prospectus in
order to reflect the impact of the KushCo Q. 3 Financials.
Merger-Related Litigation
On July 19, 2021, a complaint was filed in the United States District Court for
the Eastern District of New York captioned Hugh Meighan v. KushCo
Holdings, Inc., Nick Kovacevich, Eric Baum, Barbara Goodstein, Donald H. Hunter,
Dallas Imbimbo, and Pete Kadens, Case No. 1:21-cv-04048 (the "Action"). The
Action names as defendants KushCo and each of the members of the KushCo's board
of directors. The Action alleges, among other things, that all defendants
violated provisions of the Securities Exchange Act of 1934, as amended, insofar
as the Joint Proxy Statement/Prospectus allegedly omits
and/or misrepresents material information concerning the (i) KushCo's and
Greenlane's financial projections, (ii) the financial analyses performed by the
KushCo's financial advisor, Jefferies LLC, in connection with its fairness
opinion, and (iii) potential conflicts of interest involving Jefferies that
purportedly render certain sections of the definitive joint proxy statement
false and misleading. The complaint seeks, among other things, injunctive
relief, rescissory damages, an award of plaintiffs' fees and expenses and a
trial by jury. The defendants believe the claims asserted in the Action are
without merit and intend to vigorously defend them.
The foregoing summary is incorporated by reference into the Joint Proxy
Statement/Prospectus.
The supplemental information contained in this Current Report on Form 8-K should
be read in conjunction with the Joint Proxy Statement/Prospectus, which should
be read in its entirety.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The unaudited consolidated financial statements of KushCo as of May 31, 2021 and
for the three and nine months ended May 31, 2020 and 2021 are filed herewith as
Exhibit 99.1 and incorporated in this Item 9.01(a) by reference.
The audited consolidated financial statements of KushCo as of and for the year
ended August 31, are filed herewith as Exhibit 99.2 and incorporated in this
Item 9.01(a) by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements of Greenlane as
of and for the three months ended March 31, 2021 and for the year ended
December 31, 2020, giving effect to the proposed Mergers, are filed herewith as
Exhibit 99.3 and are incorporated in this Item 9.01(b) by reference.
(d) Exhibits
Exhibit
No. Description
23.1 Consent of Marcum LLP
99.1 Unaudited Condensed Consolidated Financial Statements of KushCo
Holdings, Inc. as of May 31, 2021 and for the three and nine months
ended May 31, 2021 and 2020.
99.2 Audited Consolidated Financial Statements of KushCo Holdings, Inc. as
of and for the year ended August 31, 2020 (Incorporated by reference to
Exhibit 99.11 to Greenlane Holdings, Inc.'s Registration Statement on
Form S-4/A, filed on July 1, 2021).
99.3 Unaudited Pro Forma Condensed Combined Financial Statements of
Greenlane Holdings, Inc. as of and for the three months ended March 31,
2021 and for the year ended December 31, 2020.
99.4 Information About KushCo Holdings, Inc. - Description of the
Business.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
Important Information for Investors and Stockholders
In connection with the proposed transaction, Greenlane has filed with the SEC a
registration statement on Form S-4 (File No. 333-256582) (the "Registration
Statement") that was declared effective by the SEC on July 2, 2021. The
Registration Statement includes a preliminary joint proxy statement of Greenlane
and KushCo that also constitutes a prospectus of Greenlane. Greenlane and KushCo
also plan to file other relevant documents with the SEC regarding the proposed
transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain free copies of the registration
statement and the joint proxy statement/prospectus and other relevant documents
filed by Greenlane and KushCo with the SEC at the SEC's website at www.sec.gov.
Copies of the documents filed by the companies will be available free of charge
on their respective websites at www.gnln.com and www.kushco.com.
Participants in Solicitation
This communication relates to a proposed transaction between Greenlane and
KushCo. This communication is not a proxy statement or solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
potential transaction. Greenlane, KushCo and their respective directors and
executive officers may be considered participants in the solicitation of proxies
in connection with the proposed transaction. Information about the directors and
executive officers of Greenlane is set forth in its joint proxy
statement/prospectus for its 2021 annual meeting of stockholders, which was
filed with the SEC on July 2, 2021. Information about the directors and
executive officers of KushCo is set forth in its proxy statement for its 2021
annual meeting of stockholders, which was filed with the SEC on December 28,
2020. These documents can be obtained free of charge from the sources indicated
above. Additional information regarding the participants in the proxy
solicitations and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with the SEC when
they become available.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell
or the solicitation of an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote of approval, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the Securities
Act.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. These
forward- looking statements are based on current expectations, estimates and
projections about the industry and markets in which Greenlane and KushCo operate
and beliefs of, and assumptions made by, Greenlane management and KushCo
management and involve uncertainties that could significantly affect the
financial results of Greenlane, KushCo or the combined company following the
proposed transaction between Greenlane and KushCo (the "Combined Company").
Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words and similar expressions are intended to
identify such forward-looking statements, which generally are not historical in
nature. Such forward-looking statements include, but are not limited to,
statements about the anticipated benefits of the business combination
transaction involving Greenlane and KushCo, including future financial and
operating results, and the Combined Company's plans, objectives, expectations
and intentions. All statements that address operating performance, events or
developments that Greenlane and KushCo expect or anticipate will occur in the
future are forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict. Although Greenlane and KushCo believe the expectations
reflected in any forward-looking statements are based on reasonable assumptions,
Greenlane and KushCo can give no assurance that their expectations will be
attained and therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in such forward-looking statements. Some of the
factors that may affect outcomes and results include, but are not limited to:
risks associated with the companies' ability to consummate the proposed
transaction, including the risk that one of the necessary proposals is not
approved by the required vote, the timing and closing of the proposed
transaction and unexpected costs or unexpected liabilities that may arise from
the proposed transaction, whether or not consummated; risks related to
disruption of management's attention from the ongoing business operations due to
the proposed transaction; the effect of the announcement of the proposed
transaction on Greenlane's or KushCo's business relationships with, third-party
suppliers and service suppliers and businesses generally; each of Greenlane's
and KushCo's success, or the success of the Combined Company, in implementing
its business strategy and its ability to identify, underwrite, finance,
consummate and integrate acquisitions or investments; changes in national,
regional and local economic climates; public health crises, including the
COVID-19 pandemic; changes in financial markets and interest rates, or to the
business or financial condition of Greenlane, KushCo or the Combined Company or
their respective businesses; the nature and extent of future competition; each
of Greenlane's and KushCo's ability, or the ability of the Combined Company, to
pay down, refinance, restructure and/or extend its indebtedness as it becomes
due; availability to Greenlane, KushCo and the Combined Company of financing and
capital; the impact of any financial, accounting, legal or regulatory issues or
litigation, including any legal proceedings, regulatory matters or enforcement
matters that have been or in the future may be instituted against Greenlane,
KushCo or others relating to the merger agreement, that may affect Greenlane,
KushCo or the Combined Company; risks associated with acquisitions, including
the integration of Greenlane's and KushCo's businesses; and those additional
risk factors of Greenlane, KushCo and the Combined Company discussed in the
Form S-4. Should one or more of the risks or uncertainties described above or in
the Form S-4, or should underlying assumptions prove incorrect, actual results
and plans could differ materially from those expressed in any forward-looking
statements. You are cautioned not to place undue reliance on these statements,
which speak only as of the date of this communication. All forward-looking
statements, express or implied, included in this communication are expressly
qualified in their entirety by this cautionary statement. This cautionary
statement should also be considered in connection with any subsequent written or
oral forward-looking statements that Greenlane, KushCo or persons acting on
their behalf may issue. Neither Greenlane nor KushCo undertakes any duty to
update any forward-looking statements appearing in this communication.
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