Greenlane Holdings Inc

Previous wording

On May 6, 2024, the Company, Warehouse Goods and Synergy Imports LLC (“Synergy”) entered into an asset purchase agreement, dated May 1, 2024 (the “Asset Purchase Agreement”) pursuant to which Synergy purchased all of the intellectual property, a specified amount of inventory, and other assets related to the Eyce and DaVinci brands. In consideration for the acquisition, all parties entered into a loan modification agreement, effective May 1, 2024 (the “Loan Modification Agreement”) and an amended and restated secured promissory note, effective May 1, 2024 (the Amended and Restated Secured Promissory Note”), an amendment to the original Eyce and Davinci Asset Purchase Agreements, a distribution agreement, the termination of a license granted by Eyce, and the termination of certain consulting and employment agreements.

Current wording

On May 6, 2024, the Company, Warehouse Goods and Synergy entered into an asset purchase agreement, dated May 1, 2024 (the “Asset Purchase Agreement”) pursuant to which Synergy purchased all of the intellectual property, a specified amount of inventory, and other assets related to the Eyce and DaVinci brands. In consideration for the acquisition, all parties entered into a loan modification agreement, effective May 1, 2024 (the “Loan Modification Agreement”) and an amended and restated secured promissory note, effective May 1, 2024 (the “Amended and Restated Secured Promissory Note”), an amendment to the original Eyce and Davinci Asset Purchase Agreements, a distribution agreement, the termination of a license granted by Eyce, and the termination of certain consulting and employment agreements. As part of the overall modification, the principal balance with Synergy decreased by $2.7 million from $5.1 million. Synergy acquired certain assets from the Company in exchange for the reduction in overall principal owed and as part of the transaction, the Company recognized a gain on the debt modification of $2.2 million. This amount is included in the accompanying financial statements within the statement of operations for the three and six months ended June 30, 2024 within other income (expense). At June 30, 2024, $2.5 million of such financing remained outstanding. The updated date of maturity will be through August 2024.

Previous wording

The following table presents operating results for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents operating results for the three and six months ended June 30, 2024 and 2023:

Previous wording

For the three months ended March 31, 2024, net sales were approximately $4.9 million, compared to approximately $23.9 million for the same period in 2023, representing a decrease of $19.0 million, or 79.4%. The year-over-year decrease in net sales was due to a major restructuring of our Industrial Group in April of 2023, involving our packaging and industrial vaping product lines; transitioning much of this business from a gross sales to a commission structure to preserve working capital. Revenues decreased in the Consumer Brands Group due, in part, to restructuring efforts and shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing third-party brand offerings, which generated top line revenue with lower margins. Our Industrial Goods operating segment reported net sales of approximately $2.7 million compared to approximately $16.1 million for the same period in 2023, representing a decrease of $13.5 million or 83.9%. The consumer business also was affected by the inability to access capital markets on equitable terms, resulting in stock-outs and shortages of higher velocity inventory. The Company is continuing to focus on profitable revenue and as a result top line revenue has significantly been reduced. Concurrently, the Company has continued its focus on right-sizing the business during the fiscal year ended December 31, 2023 and through present, in an effort to reduce sales and marketing costs and reduce or eliminate certain administrative functions.

Current wording

For the three months ended June 30, 2024, net sales were approximately $2.6 million, compared to approximately $19.6 million for the same period in 2024, representing a decrease of $17.0 million, or 86.5%. The year-over-year decrease in net sales was due to a major restructuring of our Industrial Group in April of 2023, involving our packaging and industrial vaping product lines; transitioning much of this business from a gross sales to a commission structure to preserve working capital. Revenues decreased in the Consumer Brands Group due, in part, to restructuring efforts and shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing third-party brand offerings, which generated top line revenue with lower margins. Our Industrial Goods operating segment reported net sales of approximately $1.7 million compared to approximately $13.6 million for the same period in 2023, representing a decrease of $11.9 million or 87.5%. The consumer business also was affected by the inability to access capital markets on equitable terms, resulting in stock-outs and shortages of higher velocity inventory. The Company is continuing to focus on profitable revenue and as a result top line revenue has significantly been reduced. Concurrently, the Company has continued its focus on right-sizing the business during the fiscal year ended December 31, 2023 and through present, in an effort to reduce sales and marketing costs and reduce or eliminate certain administrative functions.

Previous wording

For the three months ended March 31, 2024, cost of sales decreased by $15.0 million, or 81.5%, as compared to the same period in 2023. The decrease in the cost of sales is driven by the 79.4% decrease in revenue in addition to a decrease in damaged and obsolete inventory write-offs.

Current wording

For the three months ended June 30, 2024, cost of sales decreased by $13.4 million, or 89.1%, as compared to the same period in 2023. The decrease in the cost of sales is driven by the 86.5% decrease in revenue in addition to a decrease in damaged and obsolete inventory write-offs.

Previous wording

Salaries, benefits and payroll taxes expenses decreased by approximately $2.4 million, or 45.1%, to $2.9 million for the three months ended March 31, 2024, compared to $5.4 million for the same period in 2023. The decrease is related to the reduction in workforce to right-size the business and focus on profitability.

Current wording

Salaries, benefits and payroll taxes expenses decreased by approximately $3.6 million, or 70.7%, to $1.5 million for the three months ended June 30, 2024, compared to $5.2 million for the same period in 2023. The decrease is related to the reduction in workforce to right-size the business and focus on profitability.

Previous wording

General and administrative expenses decreased by approximately $5.4 million, or 70.1%, for the three months ended March 31, 2024, compared to the same period in 2023. The decrease is related to major restructuring effort by the Company to reduce cost and right-size the business. Compared with the first quarter of 2023, the Company focused on reduction across the board in general and administrative expenses and saw large decreases in professional and outside services, facility expenses, outbound freight, other general and administrative, marketing, taxes and licenses, and general insurance.

Current wording

General and administrative expenses decreased by approximately $4.2 million, or 59.8%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is related to major restructuring effort by the Company to reduce cost and right-size the business. Compared with the first quarter of 2023, the Company focused on reduction across the board in general and administrative expenses and saw large decreases in professional and outside services, facility expenses, outbound freight, other general and administrative, marketing, taxes and licenses, and general insurance.

Previous wording

Depreciation and amortization expense decreased $0.2 million, or 48.3%, for the three months ended March 31, 2024, compared to the same period in 2023. The decrease is related to a major restructuring effort to reduce cost and right-size the business resulting in the sale and disposal of assets related to reducing our warehousing and office footprint.

Current wording

Depreciation and amortization expense decreased $0.3 million, or 58.9%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is related to a major restructuring effort to reduce cost and right-size the business resulting in the sale and disposal of assets related to reducing our warehousing and office footprint.

Previous wording

Interest expense decreased approximately $0.3 million for the three months ended March 31, 2024 compared to the same period in 2023. The decrease is primarily related to reduction in overall debt financing and refinancing debt for more favorable terms.

Current wording

Interest expense decreased approximately $0.6 million for the three months ended June 30, 2024 compared to the same period in 2023. The decrease is primarily related to reduction in overall debt financing and refinancing debt for more favorable terms.

Previous wording

Other income, net, decrease by approximately $0.1 million for the three months ended March 31, 2024, compared to the same period in 2023. The change is primarily due previously recognized change in fair value of equity investments recorded during the three months ended March 31, 2023.

Current wording

Other income, net, decreased by approximately $0.1 million for the three and six months ended June 30, 2024, compared to the same period in 2023. The change is primarily due previously recognized change in fair value of equity investments recorded during the three and six months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024 and 2023, respectively, the effective tax rate differed from the U.S. federal statutory tax rate of 21% primarily due to the Operating Company’s pass-through structure for U.S. income tax purposes (through December 31, 2022), the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, and the valuation allowance against the deferred tax asset.

Current wording

For the three and six months ended June 30, 2024 and 2023, respectively, the effective tax rate differed from the U.S. federal statutory tax rate of 21% primarily due to the Operating Company’s pass-through structure for U.S. income tax purposes (through December 31, 2022), the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, and the valuation allowance against the deferred tax asset.

Previous wording

Following the completion of the KushCo merger in late August 2021, we reassessed our operating segments based on our new organizational structure. Based on this assessment, we determined we had two operating segments as of December 31, 2021, which are the same as our reportable segments: (1) Consumer Goods, which largely comprises Greenlane’s legacy operations across the United States, Canada, and Europe, and (2) Industrial Goods, which largely comprises KushCo’s legacy operations. These changes in operating segments align with how we manage our business as of the first quarter of 2024.

Current wording

Following the completion of the KushCo merger in late August 2021, we reassessed our operating segments based on our new organizational structure. Based on this assessment, we determined we had two operating segments as of December 31, 2021, which are the same as our reportable segments: (1) Consumer Goods, which largely comprises Greenlane’s legacy operations across the United States, Canada, and Europe, and (2) Industrial Goods, which largely comprises KushCo’s legacy operations. These changes in operating segments align with how we manage our business as of the second quarter of 2024.

Previous wording

Our chief operating decision maker (“CODM”) allocates resources to and assesses the performance of our two operating segments based on the operating segments’ net sales and gross profit. The following table sets forth information by reportable segment for the three months ended March 31, 2024 and 2023:

Current wording

Our chief operating decision maker (“CODM”) allocates resources to and assesses the performance of our two operating segments based on the operating segments’ net sales and gross profit. The following table sets forth information by reportable segment for the three and six months ended June 30, 2024 and 2023:

Previous wording

For the three months ended March 31, 2024, our Consumer Goods operating segment reported net sales of approximately $2.3 million compared to approximately $7.8 million for the same period in 2023, representing a decrease of $5.5 million or 70.9%. The year-over-year decrease was due to a major restructuring and continued effort by the company to right-size the business and to reduce sales and marketing costs to align with gross profit, sale of certain Company brands and a major shift in strategy to focus on in-house brands that have a higher margin profile and rationalized third-party brand offering generating top line revenue with lower margins as well as some stockouts of key items.

Current wording

For the three months ended June 30, 2024, our Consumer Goods operating segment reported net sales of approximately $0.9 million compared to approximately $6.0 million for the same period in 2023, representing a decrease of $5.1 million or 85.1%. The year-over-year decrease was due to a major restructuring and continued effort by the company to right-size the business and to reduce sales and marketing costs to align with gross profit, sale of certain Company brands and a major shift in strategy to focus on in-house brands that have a higher margin profile and rationalized third-party brand offering generating top line revenue with lower margins as well as some stockouts of key items. In addition, the consumer business also was affected by the inability to access capital markets on equitable terms, resulting in stock-outs and shortages of higher velocity inventory.

Previous wording

For the three months ended March 31, 2024, the cost of sales decreased by $3.9 million, or 71.5%, as compared to the same period in 2023. The decrease in the cost of sales was primarily due to the decrease in the net sales of Consumer Goods.

Current wording

For the three months ended June 30, 2024, the cost of sales decreased by $3.5 million, or 82.1%, as compared to the same period in 2023. The decrease in the cost of sales was primarily due to the decrease in the net sales of Consumer Goods.

Previous wording

For the three months ended March 31, 2024, our Industrial Goods operating segment reported net sales of approximately $2.6 million compared to approximately $16.1 million for the same period in 2023, representing a decrease of $13.5 million or 83.6%. The year-over-year decrease was due to a major restructuring from gross to net revenue recognition and continued effort by the company to right size the business and reduce sales and marketing costs to align with the gross profit and the announcement to sell the Company’s packaging business interrupting sales.

Current wording

For the three months ended June 30, 2024, our Industrial Goods operating segment reported net sales of approximately $1.8 million compared to approximately $13.6 million for the same period in 2023, representing a decrease of $11.8 million or 87.1%. The year-over-year decrease was due to a major restructuring from gross to net revenue recognition and continued effort by the company to right size the business and reduce sales and marketing costs to align with the gross profit and the announcement to sell the Company’s packaging business interrupting sales.

Previous wording

For the three months ended March 31, 2024, the cost of sales decreased by $11.1 million, or 85.8%, as compared to the same period in 2023. The decrease in the cost of sales was primarily due to the 83.6% decrease in the net sales of the Industrial Goods.

Current wording

For the three months ended June 30, 2024, the cost of sales decreased by $9.9 million, or 91.8%, as compared to the same period in 2023. The decrease in the cost of sales was primarily due to the 87.1% decrease in the net sales of the Industrial Goods.

Previous wording

The gross margin was approximately 30.6% for the three months ended March 31, 2024, compared to a gross margin of approximately 20.0% for the same period in 2023.

Current wording

The gross margin was approximately 49.6% for the three months ended June 30, 2024, compared to a gross margin of approximately 20.4% for the same period in 2023. Margins increased as the Company moved to a commission-based revenue model.

Previous wording

For the three months ended March 31, 2024, our United States net sales were approximately $3.8 million, compared to approximately $22.4 million for the same period in 2023, representing a decrease of $18.6 million, or 83.0%. The year-over-year decrease in net sales was due to a major restructuring effort and a shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing out third-party brand offerings, which generated top line revenue with lower margins. The Company’s transition out of the Industry packaging business, which impacted sales and required significant working capital and produced low margins. The company entered into a strategic partnership with an affiliate of one our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”). As part of the Vape Partnership, we will introduce our Vape Partner to to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage and distribution of such vaporizer products. If our Vape Partner and key customer(s) enter into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s). In exchange we would earn quarterly and annual commission payments from our strategic partners. While the strategic partnerships will result in a decrease in top line revenue for these packaging and vape products these partnerships combined with some of our other restructuring initiatives, should allow us to reduce our overall cost-structure and enhance our margins, and convert millions of dollars of existing inventory back into cash, thereby improving our balance sheet. The Company is focused on profitable revenue and as a result top line revenue has significantly been reduced.

Current wording

For the three months ended June 30, 2024, our United States net sales were approximately $1.7 million, compared to approximately $18.6 million for the same period in 2023, representing a decrease of $16.8 million, or 90.6%. The year-over-year decrease in net sales was due to a major restructuring effort and a shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing out third-party brand offerings, which generated top line revenue with lower margins. The Company’s transition out of the Industry packaging business, which impacted sales and required significant working capital and produced low margins. The company entered into a strategic partnership with an affiliate of one our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”). As part of the Vape Partnership, we will introduce our Vape Partner to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage and distribution of such vaporizer products. If our Vape Partner and key customer(s) enter into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s). In exchange we would earn quarterly and annual commission payments from our strategic partners. While the strategic partnerships will result in a decrease in top line revenue for these packaging and vape products these partnerships combined with some of our other restructuring initiatives, should allow us to reduce our overall cost-structure and enhance our margins, and convert millions of dollars of existing inventory back into cash, thereby improving our balance sheet. The Company is focused on profitable revenue and as a result top line revenue has significantly been reduced.

Previous wording

For the three months ended March 31, 2024, our Canadian net sales were approximately $0.4 million, compared to approximately $0.3 million for the same period in 2023, representing a slight increase of $0.1 million, or 22.0%. The company is currently evaluating distribution and sales channels into Canada.

Current wording

For the three months ended June 30, 2024, our Canadian net sales were approximately $0.3 million, compared to approximately $0.1 million for the same period in 2023, representing a slight increase of $0.2 million. The company is currently evaluating distribution and sales channels into Canada.

Previous wording

For the three months ended March 31, 2024, our European net sales were approximately $0.8 million, compared to approximately $1.3 million for the same period in 2023, representing a decrease of $0.5 million or 40.0%. The decrease in net sales was due primarily to major restructuring efforts to improve the profitability of our European operations.

Current wording

For the three months ended June 30, 2024, our European net sales were approximately $0.6 million, compared to approximately $0.9 million for the same period in 2023, representing a decrease of $0.4 million or 39.3%. The decrease in net sales was due primarily to major restructuring efforts to improve the profitability of our European operations.

Previous wording

Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs. Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds other equity issuances. As of March 31, 2024, we had approximately $0.2 million of cash, of which none was restricted and $0.1 million was held in foreign bank accounts, and approximately $0.8 million ofnegative working capital, which is calculated as total current assets minus total current liabilities, as compared to approximately $0.5 million of cash, of which $0.1 million was held in foreign bank accounts, and approximately $3.7 million of working capital as of December 31, 2023. The repatriation of cash balances from our foreign subsidiaries could have adverse tax impacts or be subject to capital controls; however, these balances are generally available to fund the ordinary business operations of our foreign subsidiaries without legal or other restrictions.

Current wording

Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs. Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds other equity issuances. As of June 30, 2024, we had approximately $0.2 million of cash, of which none was restricted and $0.1 million was held in foreign bank accounts, and approximately $1.1 million of negative working capital, which is calculated as total current assets minus total current liabilities, as compared to approximately $0.5 million of cash, of which $0.1 million was held in foreign bank accounts, and approximately $3.7 million of working capital as of December 31, 2023. The repatriation of cash balances from our foreign subsidiaries could have adverse tax impacts or be subject to capital controls; however, these balances are generally available to fund the ordinary business operations of our foreign subsidiaries without legal or other restrictions.

Previous wording

We believe that our cash on hand and the cash flow that we generate from our operations will not be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations, for the next 12 months. Based on our cash on hand and working capital at March 31, 2024, we may have insufficient cash to fund planned operations intothe third quarter of 2024. This is evident from our continued efforts to raise capital and leverage external funding to fulfill our capital needs as highlighted below.

Current wording

We believe that our cash on hand and the cash flow that we generate from our operations will not be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations, for the next 12 months. Based on our cash on hand and working capital at June 30, 2024, we may have insufficient cash to fund planned operations into the fourth quarter of 2024. This is evident from our continued efforts to raise capital and leverage external funding to fulfil our capital needs as highlighted below.

Previous wording

We formerly used a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) to conduct securities offerings. In August 2021, we filed a prospectus supplement and established an “at-the-market” equity offering program (the “ATM Program”) that provided for the sale of shares of our Class A common stock having an aggregate offering price of up to $50 million, from time to time. H

Current wording

We formerly used a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) to conduct securities offerings. In August 2021, we filed a prospectus supplement and established an “at-the-market” equity offering program (the “ATM Program”) that provided for the sale of shares of our Class A common stock having an aggregate offering price of up to $50 million, from time to time.

Previous wording

On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A Common Stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 8,095,238 shares of our Class A common stock (the “July 2023 Standard Warrants”). The July 2023 units were offered pursuant to a Registration Statement on Form S-1 (the “July 2023 Offering”). The July 2023 Offering generated gross proceeds of approximately $4.3 million and net proceeds to the Company of approximately $3.8 million and closed on July 3, 2023.

Current wording

On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 50,952 shares of our Class A common stock, pre-funded warrants to purchase up to 317,013 shares of our Class A Common Stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 735,931 shares of our Class A common stock (the “July 2023 Standard Warrants”). The July 2023 units were offered pursuant to a Registration Statement on Form S-1 (the “July 2023 Offering”). The July 2023 Offering generated gross proceeds of approximately $4.3 million and net proceeds to the Company of approximately $3.8 million and closed on July 3, 2023.

Previous wording

We have incurred net losses of $4.5 million and $8.7 million for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, cash used in operating activities was $0.1 million and cash used in operating activities for the year ended December 31, 2023 was $1.8 million. The recent macroeconomic environment has caused weaker demand than contemplated under our business plan, resulting in a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

Current wording

We have incurred net losses of $5.1 million and $17.8 million for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, cash used in operating activities was $0.4 million and cash used in operating activities for the year ended December 31, 2023 was $1.8 million. The recent macroeconomic environment has caused weaker demand than contemplated under our business plan, resulting in a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities of approximately $0.1 million consisted of (i) net loss of $4.5 million, offset by non-cash adjustments to net loss of approximately $0.3 million, and (ii) a $4.1 million increase in working capital primarily driven by increases in accounts payable, accrued expenses of approximately $1.7 million and decreases in inventories and other current assets of approximately $2.7 million.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities of approximately $0.4 million consisted of (i) net loss of $5.1 million, offset by non-cash adjustments to net loss of approximately $2.6 million, and (ii) a $7.3 million increase in working capital primarily driven by increases in accounts payable, accrued expenses of approximately $3.7 million and decreases in inventories and other current assets of approximately $3.8 million.

Previous wording

During the three months ended March 31, 2023, net cash provided by operating activities of approximately $1.9 million consisted of (i) net loss of $8.7 million, offset by non-cash adjustments to net loss of approximately $0.9 million, including depreciation and amortization expense of approximately $0.5 million and stock based compensation expense of $0.2 million, and (ii) a $9.7 million decrease in working capital primarily driven by decreases in inventories, vendor deposits and other current assets of approximately $9.0 million, including cash collections of approximately $4.9 million related to ERC sales, and increases in accounts payable and accrued expenses of approximately $2.9 million, offset partially by a $1.4 million increase in accounts receivable and a $0.8 million decrease in customer deposits.

Current wording

During the six months ended June 30, 2023, net cash provided by operating activities of approximately $4.7 million consisted of (i) net loss of $17.8 million, offset by non-cash adjustments to net loss of approximately $1.8 million, including depreciation and amortization of expense of approximately $1.0 million, equity-based compensation expense of approximately $0.3 million, change in the fair value of contingent consideration of approximately $0.1 million, and other expenses of approximately $0.5 million, and (ii) a $20.6 million decrease in working capital primarily driven by decreases in accounts receivable, inventories, vendor deposits and other current assets of approximately $19.7 million, increases in accounts payable of approximately $1.9 million, offset by decreases in customer deposits of approximately $1.0 million.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities of approximately $0.2 million consisted primarily of capital expenditures.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities of approximately $0.2 million consisted primarily of capital expenditures.

Previous wording

During the three months ended March 31, 2023, net cash used in investing activities of approximately $0.2 million consisted primarily of capital expenditures.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities of approximately $0.3 million largely consisted of capital expenditures, including development costs for our new enterprise resource planning (“ERP”) system.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities of approximately $0.1 million primarily consisted of approximately $0.3 million in payments on loans against future accounts receivable and approximately $0.2 million in proceeds from future receivables financing.

Current wording

During the six months ended June 30, 2024, net provided by financing activities of approximately $0.2 million primarily consisted of approximately $0.6 million in payments on loans against future accounts receivable, approximately $0.2 million in proceeds from future receivables financing, and approximately $0.6 million in proceeds from notes payable.

Previous wording

During the three months ended March 31, 2023, net cash used in financing activities of approximately $8.2 million consisted of repayments of the Asset-Based Loan of approximately $6.5 million, payments on the Eyce and DaVinci promissory notes of approximately $0.9 million, and Asset-Based Loan costs incurred of approximately $0.8 million.

Current wording

During the six months ended June 30, 2023, net cash used in financing activities of approximately $12.1 million largely consisted of debt service payments of approximately $11.8 million, including $10.2 million related to the Asset-Based Loan and $1.6 million for the Eyce and DaVinci promissory notes, and $0.3 million in payments of contingent consideration related to the DaVinci acquisition.