Overview

Eightco Holdings Inc. (the “Company” or “Eightco”) is a Delaware corporation that was originally incorporated in September 2021. The Company is comprised of two main businesses: the Forever 8’s Inventory Cash Flow Solution and the Corrugated Packaging Business of Ferguson Containers.

In May 2022, the Company separated from its former parent company, Vinco Ventures Inc., and became an independent, publicly traded company. As part of the separation, the Company entered into various agreements with Vinco to allocate assets, liabilities, and obligations between the two companies.

Financings and Forever 8 Acquisition

The Company has undertaken several financing activities, including:

February 2024 Private Placement: The Company sold 865,856 shares of common stock to investors for gross proceeds of $0.71 million.

Series A, B, C, and D Financings: The Company’s subsidiary, Forever 8, entered into a series of loan and security agreements with various lenders to obtain financing for its operations. As of the filing date, a total of $10 million has been committed under these agreements.

May 2023 Debt Exchange: The Company exchanged certain secured promissory notes for new notes with improved terms.

March 2023 Offering: The Company issued a $5.555 million senior secured convertible note and a warrant to purchase up to 889,512 shares of common stock.

In October 2022, the Company acquired 100% of the membership interests of Forever 8, a company focused on purchasing inventory and becoming a supplier for e-commerce retailers.

Series A Preferred Stock Dividend

In January 2023, the Company declared a dividend of one one-thousandth of a share of Series A Preferred Stock for each outstanding share of common stock.

Critical Accounting Policies and Significant Judgments and Estimates

The Company’s significant accounting policies and critical estimates include principles of consolidation, use of estimates, accounting for long-lived assets and goodwill, and warrant accounting.

Key Components of Results of Operations

The Company’s key revenue sources are its Inventory Management Solutions business (Forever 8) and its Corrugated Packaging Business (Ferguson Containers). Key expenses include cost of revenues, selling, general and administrative expenses, restructuring and severance expenses, interest expense, and other income/expense items.

Results of Operations

For the year ended December 31, 2024, the Company’s revenues from Inventory Management Solutions decreased by 41.36% compared to 2023, primarily due to less capital utilized to purchase inventory for customers. Gross profit decreased by 4.44%, while operating expenses decreased by 13.82% and 33.70% for selling, general and administrative and restructuring/severance, respectively.

Interest expense decreased by 54.23% due to the full amortization of debt issuance costs. The Company also recognized significant gains on forgiveness of earnout and extinguishment of liabilities.

For the discontinued Corrugated Packaging Business, revenues decreased by 11.72% in 2024 compared to 2023, leading to a 17.46% decrease in gross profit.

Liquidity and Capital Resources

As of March 31, 2025, the Company had approximately $9.7 million in outstanding debt obligations. Management expects the need for additional capital to support ongoing operations and scale revenues. The Company plans to continue accessing capital through debt and equity financing.

In November 2024, the Company entered an agreement to sell its Corrugated Packaging Business for approximately $3.1 million, which is expected to close in Q2 2025 and provide increased liquidity.

The Company’s cash flows show net cash used in operating activities of $6.6 million in 2024, net cash used in investing activities of $0.07 million, and net cash provided by financing activities of $1.7 million. The Company has an accumulated deficit and expects to need additional capital to continue operations, raising substantial doubt about its ability to continue as a going concern.