Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 30, 2021, Aaron LoCascio, the President and co-founder of Greenlane
Holdings, Inc. (the "Company") and a member of the Company's Board of Directors
(the "Board"), entered into a Separation and General Release Agreement (the
"Separation Agreement") with Warehouse Goods LLC, a wholly owned subsidiary of
the Company, whereby Mr. LoCascio's employment with the Company was terminated
effective December 31, 2021 (the "Separation Date"). Mr. LoCascio's decision to
step down as President of the Company and enter into the Separation Agreement is
due to his desire to pursue other interests and is not the result of any
disagreement with the Company or any matter relating to the Company's operating,
policies or practices. Mr. LoCascio will continue to serve as a member of the
Board after the Separation Date.
Pursuant to the Separation Agreement, Mr. LoCascio will (i) receive a cash
severance payment totaling $267,420.44, representing eight months' salary and
COBRA payments, each payable in accordance with the Company's ordinary payroll
practices, (ii) be eligible for the cash payment of his 2021 bonus (the "2021
Bonus"), if any, in an amount to be determined by the Compensation Committee of
the Board (the "Committee") and payable within 15 days of the 2021 Bonus's
approval by the Committee, (iii) not forfeit any equity awards still subject to
vesting under the Company's Amended and Restated 2019 Equity Incentive Plan, and
(iv) be entitled to compensation for serving as a member of the Board in
accordance with the Company's existing director compensation program starting
January 1, 2022. In addition, upon the Separation Date, the Company will make
good faith efforts to remove Mr. LoCascio as the personal guarantor for certain
Company accounts (the "Personal Guarantee Accounts") and will indemnify Mr.
LoCascio against any and all claims that may arise from the Personal Guarantee
Accounts. As consideration for entering into the Separation Agreement, Mr.
LoCascio agreed to a full and complete release of any and all waivable claims
and rights against the Company, its parents, subsidiaries and affiliates, and
each of their officers, directors, members, shareholders, employees, agents,
representatives, consultants, fiduciaries, attorneys, insurers, benefit plans,
plan administrators, joint venture partners, subsidiaries and affiliates, and
all of their predecessors, successors, and assigns, up to and through the
Separation Date.
Pursuant to the Separation Agreement, Mr. LoCascio is subject to certain
continuing obligations and restrictions, including with respect to
confidentiality, non-competition, non-solicitation and non-disparagement.
The foregoing description of the Separation Agreement is qualified in its
entirety by reference to the full text of the Separation Agreement, which is
attached hereto as Exhibit 10.1.
Item 7.01. Regulation FD Disclosure.
On January 4, 2022, the Company issued a press release announcing Mr. LoCascio's
departure as President of the Company and the transition of Adam Schoenfeld from
Chief Strategy Officer to Chief Marketing Officer. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated by reference into this
Item 7.01.
Investors and others should note that the Company may announce material
information using press releases, presentation materials, public conference
calls, webcasts and the "Investors" section of the Company's website, which is
accessible at www.gnln.com. In the future, the Company intends to continue to
use these distribution channels to distribute material and other information
about the Company and to communicate important information about the Company,
key personnel, corporate initiatives, regulatory updates and other matters. The
Company encourages investors, the media, business partners and others interested
in the Company to review the information on the Company's website. Users may
automatically receive email alerts and other information about the Company when
enrolling an email address by visiting the "Email Alerts" page of the "Investors
Resources" section of the Company's website. While not all of the information
posted on the Company's website is or will be of a material nature, some of the
information posted to the Company's website may be deemed material. Information
on the Company's website is not incorporated by reference in this Current Report
on Form 8-K and does not constitute a part of this Current Report on Form 8-K.
The information in this Item 7.01, including Exhibit 99.1, is furnished and
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
liabilities under that section, and shall not be deemed to be incorporated by
reference into the filings of the Company under the Securities Act or the
Exchange Act, regardless of any general incorporation language in such filings.
This Current Report will not be deemed an admission as to the materiality of any
information of the information in this Item 7.01, including Exhibit 99.1.
Item 8.01.Other Events
On December 30, 2021, the Company entered into a Secured Promissory Note (the
"Loan") with Mr. LoCascio, in which he agreed to provide the Company with a $8.0
million bridge loan maturing on June 30, 2022 (the "Maturity Date"), at a simple
interest rate of 15% and secured by a continuing security interest in all the
Company's assets and properties whether then or thereafter existing or acquired,
including its inventory and receivables (as defined under the Universal
Commercial Code). The Loan also includes negative covenants restricting the
Company's ability to incur further indebtedness and engage in certain asset
dispositions until the earlier of the Maturity Date or the date that the Loan
has been fully repaid. The Company will owe no prepayment penalty to Mr.
LoCascio if it elects to repay the Loan in full before the Maturity Date. As
consideration for providing the Loan, a non-refundable origination fee of
$120,328.77 was paid to Mr. LoCascio.
The terms of the Loan were negotiated and approved by the Audit Committee of the
Board in accordance with the Company's Related Party Transaction Policy and
Procedures.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
10.1 Separation and General Release Agreement by and between Warehouse
Goods LLC and Aaron LoCascio, dated as of December 30, 2021.
99.1 Press Release of Greenlane Holdings, Inc., dated January 4, 2022.
104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101).
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