Mailstop 3561
April 5, 2019
Aaron LoCascio
Chief Executive Officer
Greenlane Holdings, Inc.
6501 Park of Commerce Boulevard, Suite 200
Boca Raton, Florida 33487
Re: Greenlane Holdings, Inc.
Registration Statement on Form S-1
Filed March 20, 2019
Response dated April 3, 2019
File No. 333-230405
Dear Mr. LoCascio:
We have reviewed your response letter and have the following
comments. In some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell us
why in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Response Letter dated April 3, 2019
Recent Developments
Operating Results, page 10
1. We note your proposed disclosure that you may include in a
subsequent amendment
regarding your partial first quarter net sales, and it appears the
presentation of this
preliminary result in isolation provides investors with an
incomplete picture of your
financial results. Accordingly, we have the following comments:
Aaron LoCascio
Greenlane Holdings, Inc.
April 5, 2019
Page 2
Please discuss the way(s) in which these results are consistent with
or different from
your results of operations in prior periods. Please also expand your
disclosure to
explain both quantitatively and qualitatively the factors that you
believe have
contributed to the changes. The nature of any unusual or
nonrecurring items that have
impacted or are expected to impact the preliminary results should
also be disclosed.
We note your statement in your proposed disclosure that you..."may
identify items
that require [you] to make adjustments to the financial information
set forth above
and those changes could be material." If you choose to disclose
preliminary results,
you should be able to assert that the actual results are not
expected to vary materially
from that reflected in the preliminary results. Accordingly, please
remove this
statement, as it implies that investors should not rely on the
information presented, or
explain why the presentation of this information alongside a
disclaimer that the
preliminary financial information could differ materially provides
meaningful
disclosure to investors.
Please also confirm your understanding that if, prior to the effective
date of your
registration statement, more precise numbers become available as you
conduct your
financial closing procedures for the quarter ended March 31, 2019, they
will be included
in your registration statement.
Corporate Structure, Page 14
2. We note that you show in the organizational charts here and on page 66
that investors in
the offering will have a 22.6% economic interest in Greenlane Holdings,
Inc. We also
note that you show that the founder and non-founder members will have no
economic
interest in the registrant. We further note that in the third bullet
point on page 65, you
state that purchasers in the offering will own 100% of the economic
interest in you.
Please clarify for us what percentage of economic interest that
investors in the offering
will own after the offering and update your disclosures as needed.
Dilution, page 71
3. We note your dilution calculation and have the following comments.
Please show us how you calculated your net tangible book value as of
December 31,
2018 of $(12.6) million and net tangible book value per share of
$(0.34). It appears
you have used 41,333,333 shares as outstanding in this calculation.
If so, please
explain your basis for using this amount of shares as it appears to
be the amount of
common units outstanding in the LLC and also to include the shares
purchased in this
offering.
Please also explain how this represents Class A common stock owned
by your
founder and non-founding members, when it appears they will not hold
Class A stock
but will be issued Class B and Class C common stock.
Aaron LoCascio
Greenlane Holdings, Inc.
April 5, 2019
Page 3
For your net tangible book value per share after the offering of
$2.47, it appears you
have also used 41,333,333 shares. Please explain to us why you
believe this is the
appropriate amount of shares to use as this appears to be the common
units
outstanding in the LLC and not the shares issued for the registrant.
4. Please show us how you determined the amounts shown in the table on page
72. Please
explain why you show new investors as purchasing 4,666,666 shares and
excluded the
shares sold to new investors by selling shareholders. Please also
explain why the total
number of shares is 41,333,333 shares as this appears to be the common
units outstanding
for the LLC and not the total number of shares to be outstanding for the
registrant. Please
finally show us how you determined the amount of total consideration
contributed by
existing shareholders. We may have further comment.
Unaudited Pro Forma Consolidated Financial Information, page 74
Unaudited Pro Forma Condensed Consolidated Balance Sheet, page 76
5. Please show us your calculations for the amounts in the final pro forma
Greenlane
Holdings Inc. column for common units and additional paid in capital.
Please explain to
us why there remains a balance in member's equity after giving effect to
the transactions
and offering. Please also explain to us why you show a negative amount
in retained
earnings for the amount of your non-controlling interest.
You may contact Lisa Sellars, Staff Accountant, at (202)551-3348 or
James Allegretto,
Senior Assistant Chief Accountant, at (202)551-3849 if you have questions
regarding comments
on the financial statements and related matters. Please contact Jennifer L pez,
Staff Attorney, at
(202)551-3792, Lilyanna Peyser, Special Counsel, at (202)551-3222 or me at
(202)551-3720
with any other questions.
Sincerely,
/s/ Lilyanna Peyser
for
Mara L. Ransom
Assistant Director
Office of Consumer
Products