UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 001-41033

EIGHTCO HOLDINGS INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		87-2755739
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

101 Larry Holmes Drive, Suite 313
Easton, Pennsylvania		18042
(Address of Principal Executive Offices)		(Zip Code)

(888) 765-8933

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		OCTO		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

As of May 15, 2025, there were 3,044,744 shares of the registrant’s common stock outstanding.

EIGHTCO HOLDINGS INC.

TABLE OF CONTENTS

		Page Number

PART I		5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	5
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited)	6
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025 and 2024 (Unaudited)	7
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024 (Unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II		40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

	Signatures	42

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, our ability to raise capital, our operational and strategic initiatives or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties, and actual results may differ materially from those in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed in “Risk Factors,” in Part II, Item 1A of this Report as well as information provided elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024, as amended (the “Annual Report”), which was filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2025. You should carefully consider that information before you make an investment decision.

These and other factors discussed above could cause results to differ materially from those expressed in the estimates made by any independent parties and by us.

OTHER PERTINENT INFORMATION

Unless the context otherwise indicates, when used in this Quarterly Report, the terms “Eightco,” “we,” “us,” “our,” the “Company” and similar terms refer to Eightco Holdings Inc., a Delaware corporation, and all of our consolidated subsidiaries and variable interest entities.

PART I - FINANCIAL INFORMATION

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
	2025			2024

ASSETS
Current assets:
Cash and cash equivalents	$	434,427		$	239,187
Accounts receivable, net		614,020			1,592,049
Inventories, net		6,166,917			7,834,351
Prepaid expenses and other current assets		747,905			1,002,023
Current assets of discontinued operations held for sale		1,862,455			1,798,239
Total current assets		9,825,724			12,465,849
Property and equipment, net		5,579			5,452
Intangible assets, net		13,253,572			13,828,214
Goodwill		22,324,588			22,324,588
Loan held-for-investment		2,224,252			2,224,252
Total assets	$	47,633,715		$	50,848,355

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,730,598		$	2,061,265
Accounts payable – related parties		180,000			300,000
Accounts payable		180,000			300,000
Accrued expenses and other current liabilities		2,482,275			2,936,580
Accrued expenses and other current liabilities – related parties		2,800,235			2,050,684
Accrued expenses and other current liabilities		2,800,235			2,050,684
Convertible notes payable – related parties, net		11,500,000			11,500,000
Line of credit		6,250,000			6,850,000
Line of credit – related parties		3,525,000			3,525,000
Line of credit		3,525,000			3,525,000
Due to Former Parent		222,409			480,000
Current liabilities of discontinued operations held for sale		36,394			107,731
Total current liabilities		28,726,911			29,811,260

Convertible notes payable, net of debt discount of $0 and $0, respectively		-			-
Convertible notes payable – related parties, net of debt discount of $500,000 and $750,000, respectively		9,611,218			9,521,155
Convertible notes payable		9,611,218			9,521,155
Total liabilities	$	38,338,129		$	39,332,415

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares outstanding at March 31, 2025 and December 31, 2024, respectively		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized and 3,044,744 and 2,479,363 shares outstanding at March 31, 2025 and December 31, 2024, respectively	$	3,045		$	2,479
Additional paid-in capital		124,272,178			124,129,543
Accumulated deficit		(115,118,774	)		(112,570,049	)
Foreign currency translation		553,651			368,481
Total stockholders’ attributable to Eightco Holdings Inc.		9,710,100			11,930,454
Non-controlling interest		(414,514	)		(414,514	)
Total stockholders’ equity		9,295,586			11,515,940
Total liabilities and stockholders’ equity	$	47,633,715		$	50,848,355

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2025			2024
	For the Three Months Ended March 31,
	2025			2024

Revenues, net	$	9,913,987		$	7,958,697
Cost of revenues		9,100,728			6,569,687
Gross profit		813,259			1,389,010

Operating expenses:
Selling, general and administrative expenses		2,229,425			3,127,943
Restructuring and severance		-			1,414,838
Total operating expenses		2,229,425			4,542,781
Operating loss		(1,416,166	)		(3,153,771	)

Non-operating income (expense):
Interest income (expense), net		(1,288,804	)		(1,198,771	)
Gain on forgiveness of earnout		-			6,100,000
Other income		21,898			26,677
Total non-operating income (expense)		(1,266,906	)		4,927,906

Net income (loss) before income tax expense		(2,683,072	)		1,774,135

Income tax expense (benefit)		(28,793	)		-

Net income (loss) from continuing operations		(2,654,279	)		1,774,135
Net income from discontinued operations, net of tax		105,553			166,828
Net income (loss)	$	(2,548,725	)	$	1,940,963
Net loss attributable to non-controlling interest		-			(12	)
Net income (loss) attributable to Eightco Holdings Inc.	$	(2,548,725	)	$	1,940,975
Net income (loss) per share:
Net income (loss) per share basic	$	(0.84	)	$	1.95
Net income (loss) per share diluted	$	(0.84	)	$	1.42
Weighted average number of common shares outstanding – basic		3,044,744			997,839
Weighted average number of common shares outstanding – diluted		3,044,744			1,369,177

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	2025			2024
	For the Three Months Ended March 31,
	2025			2024

Net income (loss)	$	(2,548,725	)	$	1,940,963
Foreign currency translation – unrealized gain (loss)		185,170			(177,477	)
Comprehensive income (loss)	$	(2,363,555	)	$	1,763,486

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Shares		Amount		Capital			Interest			Deficit			Income			Total
	Common Stock				Additional Paid in			Non controlling			Retained Earnings (Accumulated)			Accumulated Other
	Shares		Amount		Capital			Interest			Deficit			Income			Total

Balances, January 1, 2025		2,479,363	$	2,479	$	124,129,543		$	(414,514	)	$	(112,570,049	)	$	368,481		$	11,515,940
Issuance of common stock to note holders – interest		485,381		485		(485	)		-			-			-			-
Issuance of common stock to vendors for settlement of liabilities		80,000		81		143,120			-			-			-			143,201
Foreign currency translation		-		-		-			-			-			185,170			185,170
Net loss for the three months ended March 31, 2025		-		-		-			-			(2,548,725	)		-			(2,548,725	)
Balances, March 31, 2025		3,044,744	$	3,045	$	124,272,178		$	(414,514	)	$	(115,118,774	)	$	553,651		$	9,295,586

Balances, January 1, 2024		941,284	$	941	$	108,620,943		$	(414,502	)	$	(113,278,588	)	$	723,303		$	(4,347,903	)
Balances		941,284	$	941	$	108,620,943		$	(414,502	)	$	(113,278,588	)	$	723,303		$	(4,347,903	)

Issuance of common stock - investors		173,171		173		709,827			-			-			-			710,000
Issuance of common stock - conversions		24,195		24		99,175			-			-			-			99,199
Issuance of common stock – settlement of cash warrants		50,434		50		206,729			-			-			-			206,779
Issuance of common stock to noteholders		294,633		295		1,207,705			-			-			-			1,208,000
Issuance of common stock to board of directors and former employees		77,966		78		262,838			-			-			-			262,916
Issuance of common stock to consultants		145,779		146		492,547			-			-			-			492,693
Forgiveness of interest – related parties		-		-		3,006,896			-			-			-			3,006,896
Share-based compensation expense		-		-		33,938			-			-			-			33,938
Foreign currency translation		-		-		-			-			-			(177,477	)		(177,477	)
Net income for the three months ended March 31, 2024		-		-		-			(12	)		1,940,975			-			1,940,963
Net income (loss)		-		-		-			(12	)		1,940,975			-			1,940,963
Balances, March 31, 2024		1,707,462	$	1,707	$	114,633,768		$	(414,514	)	$	(111,337,613	)	$	545,826		$	3,436,004
Balances		1,707,462	$	1,707	$	114,633,768		$	(414,514	)	$	(111,337,613	)	$	545,826		$	3,436,004

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024
Cash flows from operating activities:
Net income (loss)	$	(2,548,725	)	$	1,940,963
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization – continuing operations		574,672			556,300
Depreciation and amortization – discontinued operations		37,992			49,496
Amortization of debt issuance costs		250,000			587,750
Share-based compensation		-			33,938
Amortization of prepaid share-based compensation		-			111,000
Gain on forgiveness of earnout		-			(6,100,000	)
Changes in assets and liabilities:
Accounts receivable		978,029			(419,007	)
Inventories		1,852,604			809,084
Prepaid expenses and other current assets		254,118			56,933
Accounts payable		(450,667	)		(301,222	)
Accrued expenses and other current liabilities		180,856			2,138,574
Discontinued operations		(129,055	)		(187,101	)

Net cash provided by (used in) operating activities		999,824			(723,292	)

Cash flows from investing activities:
Purchases of property and equipment – continuing operations		(157	)		-
Purchases of property and equipment – discontinued operations		(44,490	)		-

Net cash used in investing activities		(44,647	)		-

Cash flows from financing activities:
Net proceeds from issuance of common stock		-			710,000
Net (repayments) borrowings under line of credit		(600,000	)		575,000
Repayments under convertible notes payable		-			(4,915,000	)
Repayments under convertible notes payable – related parties		(159,937	)		(85,767	)
Repayments under convertible notes payable		(159,937	)		(85,767	)

Net cash used in financing activities		(759,937	)		(3,715,767	)

Net decrease in cash and cash equivalents		(195,240	)		(4,439,059	)
Cash and cash equivalents, beginning of the period		239,187			5,247,836
Cash and cash equivalents, end of the period	$	434,427		$	808,777

Supplemental disclosure of cash flow information:
Cash paid for interest	$	375,637		$	268,500
Cash paid for income taxes	$	-		$	-
Issuance of common stock to line of credit holders	$	-		$	60,000
Issuance of common stock to vendors for future services	$	-		$	387,000
Issuance of common stock to employees and directors for settlement of liabilities	$	-		$	262,916
Issuance of common stock to vendors for settlement of liabilities	$	143,201		$	105,693
Issuance of common stock to noteholders for settlement of accrued interest	$	-		$	1,148,000
Issuance of common stock to noteholders for settlement of cash warrant liabilities	$	-		$	206,779
Forgiveness of interest – related parties	$	-		$	3,006,896
Convertible shares under notes payable	$	-		$	99,199

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

As used herein, “Eightco” and the “Company” refer to Eightco Holdings Inc., a Delaware corporation originally incorporated on September 21, 2021 (date of inception) under the laws of the State of Nevada, and subsidiaries. On March 9, 2022, the Company converted to a Delaware corporation pursuant to a plan of conversion entered into with its former parent, Vinco Ventures, Inc. (“Vinco” or “Former Parent”). The Company operates in two main businesses: Forever 8 Inventory Cash Flow Solution and Corrugated Packaging Business. Forever 8 Fund LLC (“Forever 8”), which focuses on purchasing inventory for e-commerce retailers, was acquired by the Company on October 1, 2022, and is part of its Inventory Solution Business. The Company previously sold BTC mining equipment and developed an NFT character set under its Web3 Business but has no intention of continuing this business at this time. The Corrugated Packaging Business manufactures and sells custom packaging for a wide variety of products and helps customers generate brand awareness and promote brand image through packaging. Prior to the Separation (as defined below), the Company was 100% owned by Vinco.

As of March 31, 2025, Eightco had three wholly-owned subsidiaries: Forever 8, Ferguson Containers, Inc. (“Ferguson Containers” or “Corrugated Packaging Business”) and BlockHiro, LLC. Ferguson Containers owns 100% of 8co Holdings Shared Services, LLC. Eightco owns 51% of CW Machines, LLC which is consolidated under the voting interest entity model. Under the voting interest entity model, control is presumed by the holder of a majority voting interest unless noncontrolling shareholders have substantive participating rights. Forever 8 owns 100% of Forever 8 UK, Ltd and Forever 8 Fund EU Holdings BV.

During 2021, the Former Parent announced it plans to spin-off (the “Separation”) certain of its businesses. The Former Parent has included Ferguson Containers as well as other subsidiaries of the Former Parent (the “Eightco Businesses”) as part of the spin-off. In anticipation of the Separation, the Former Parent contributed its assets and legal entities comprising the Eightco Businesses to facilitate the Separation. As a result of the Separation, the Company became an independent, publicly traded company comprised of the Eightco Businesses on June 30, 2022.

On March 29, 2022, Ferguson Containers ownership was assigned by the Former Parent to the Company. This transaction between entities under common control resulted in a change in reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of Eightco.

Basis of Presentation.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2025 may not be indicative of results for the full year. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2024 included in the Annual Report.

The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2021 and has elected to comply with certain reduced public company reporting requirements.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reverse Stock Split: On August 8, 2024, the Company filed an amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effectuate a 1-for-5 reverse stock split of its Common Stock (the “2024 Reverse Stock Split”). All share, equity award, and per share amounts contained in the consolidated financial statements have been adjusted to reflect the Reverse Stock Splits for all prior periods presented.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Company’s significant estimates used in these condensed consolidated financial statements include, but are not limited to, fair value of warrants, revenue recognition and the determination of the economic useful life of depreciable property and equipment. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

Business Combinations. For business combinations that meet the accounting definition of a business, the Company determines and allocates the purchase price of an acquired company to the tangible and intangible assets acquired, the liabilities assumed, and noncontrolling interest, if applicable, as of the date of acquisition at fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future. Revenues and costs of the acquired companies are included in the Company’s operating results from the date of acquisition. The Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, and these estimates and assumptions are inherently uncertain and subject to refinement during the measurement period not to exceed one year from the acquisition date. As a result, any adjustment identified subsequent to the measurement period is included in operating results in the period in which the amount is determined.

Discontinued Operations. A component of an entity that is disposed of by sale or abandonment is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. The results of discontinued operations are aggregated and presented separately in the Consolidated Statement of Operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheet, including the comparative prior year period. Cash flows are reflected as cash flows from discontinued operations within the Company’s Consolidated Statements of Cash Flows for each period presented.

Cash and Cash Equivalents. The Company considers all highly liquid, short-term investments with original maturities of six months or less when purchased to be cash equivalents.

Accounts Receivable. Accounts receivable are carried at their contractual amounts, less an estimated allowance for credit losses. Management estimates the allowance for credit losses using a loss-rate approach based on historical loss information, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected credit losses. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors, industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Management believes that the composition of receivables at year-end is consistent with historical conditions as credit terms and practices and the client base has not changed significantly. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted. The allowance for credit losses was $60,000 as of March 31, 2025 and December 31, 2024.

Inventories. Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors.

Property and Equipment. Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment, 5 to 7 years for furniture and fixtures, 6 to 10 years for machinery and equipment, 10 to 15 years for building improvements, 5 years for software, 5 years for molds, 5 to 7 years for vehicles and 40 years for buildings. When fixed assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the statements of comprehensive loss for the respective period. Minor additions and repairs are expensed in the period incurred. Major additions and repairs which extend the useful life of existing assets are capitalized and depreciated using the straight-line method over their remaining estimated useful lives.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Intangible Assets and Long-lived Assets. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company assesses the recoverability of its long-lived assets using undiscounted cash flows. If an asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s fair value. We record intangible assets based on their fair value on the date of acquisition. Intangible assets include the cost of developed technology, customer relationships, trademarks and tradenames. Intangible assets are amortized utilizing the straight-line method over their remaining economic useful lives, as follows: 10 years for developed technology, 7 years for customer relationships and 7 years for trademarks and tradenames. The Company reviews long-lived assets and intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to no longer allocate resources to an asset, an impairment loss equal to the remaining carrying value of the asset is recorded. The Company did not record any impairment charges related to intangibles assets or long-lived assets during the three months ended March 31, 2025 and 2024, respectively.

Goodwill. Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net identifiable tangible and intangible assets acquired. The Company performs an impairment assessment of goodwill on an annual basis as of December 31st, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill is assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business. The Company may assess our goodwill for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value. When performing a qualitative test, the Company assesses various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that the goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis would be performed to determine if impairment is required. The Company may also elect to perform a quantitative analysis of goodwill initially rather than using a qualitative approach. The impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment, discounted cash flow and market multiples method, requires our management to make certain assumptions and estimates regarding certain industry trends and future profitability of the Company’s reporting units. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. The valuation of goodwill is affected by, among other things, the Company’s business plan for the future and estimated results of future operations. Future events could cause the Company to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.

Contingent Liabilities. The Company, from time to time, may be involved in certain legal proceedings. Based upon consultation with outside counsel handling its defense in these matters and the Company’s analysis of potential outcomes, if the Company determines that a loss arising from such matters is probable and can be reasonably estimated, an estimate of the contingent liability is recorded in its condensed consolidated financial statements. If only a range of estimated loss can be determined, an amount within the range that, based on estimates, assumptions and judgments, reflects the most likely outcome, is recorded as a contingent liability in the condensed consolidated financial statements. In situations where none of the estimates within the estimated range is a better estimate of probable loss than any other amount, the Company records the low end of the range. Any such accrual would be charged to expense in the appropriate period. Litigation expenses for these types of contingencies are recognized in the period in which the litigation services were provided.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue when it satisfies performance obligations, by transferring promised goods or services to customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for fulfilling those performance obligations. Revenue for product sales is recognized upon receipt by the customer. There are no contract assets or contract liabilities and therefore no unsatisfied performance obligations. One customer represented 86% of total revenues for the three months ended March 31, 2025.

Disaggregation of Revenue. The Company’s primary revenue stream include the sale of consumer goods through its inventory management solutions business. The revenue stream for discontinued operations primarily include the sale of corrugated packaging materials. There are no other material operations that were separately disaggregated for segment purposes.

Cost of Revenues. Cost of revenues includes freight charges, purchasing and receiving costs, depreciation and inspection costs.

Comprehensive income. The Company follows Accounting Standards Codification (“ASC”) 220 in reporting comprehensive income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. For the three months ended March 31, 2025 and 2024, the Company recognized other comprehensive gain (loss) for foreign currency translation of $185,170 and $(177,477), respectively.

Foreign Currency Transactions and Translation. Eightco’s functional currency is the United States Dollar (“USD”) and the Forever 8 functional currency in which it operates is the Euro (“EUR”).

For the purpose of presenting these condensed consolidated financial statements the reporting currency is USD. Forever 8 assets and liabilities are expressed in USDs at the exchange rate on the balance sheet date, equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholders’ equity section of the balance sheets.

Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in statement of comprehensive loss.

Exchange rates used for the translations are as follows:

SCHEDULE OF EXCHANGE RATE

	March 31, 2025		December 31, 2024
Spot
USD to EUR	$	0.9259	$	0.9615
USD to GBP	$	0.7752	$	0.8000

	March 31, 2025		March 31, 2024
Average
USD to EUR	$	0.9494	$	0.9259
USD to GBP	$	0.7916	$	0.8130

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings Per Share. The Company follows ASC 260 when reporting Earnings Per Share (“EPS”) resulting in the presentation of basic and diluted earnings per share. Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

For the three months ended March 31, 2025, the Company had net losses and therefore excluded the dilutive effect of certain securities in its diluted EPS calculation. For the three months ended March 31, 2024, the Company had net income and therefore included the dilutive effect of certain securities in its diluted EPS calculation as their effect would have been anti-dilutive.

The following is a reconciliation of the weighted average number of common shares outstanding used in calculating the basic and diluted net income (loss) per share:

	2024		2023
	March 31,
	2025		2024

Weighted average shares outstanding – basic		3,044,744		997,839
Warrants for noteholders and placement agents		-		44,217
Warrants for equity investors		-		145,600
Other shares to be issued		-		181,521
Weighted average shares outstanding – diluted		3,044,744		1,369,177

As of March 31, 2025, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

	March 31, 2025

Convertible notes payable issued in acquisition of Forever 8 Fund, LLC		42,222
Total common stock equivalents		42,222

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred Financing Costs. Deferred financing costs include debt discounts and debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct deduction from the carrying value of the debt liability. Amortization of deferred financing costs are included as a component of interest expense. Deferred financing costs are amortized using the straight-line method over the term of the recognized debt liability which approximates the effective interest method.

Income Taxes. The Company accounts for income taxes under the provisions of the FASB ASC Topic 740 “Income Taxes” (“ASC Topic 740”). The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s condensed consolidated financial statements as of March 31, 2025 and 2024. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of comprehensive income. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

Fair Value Measurements. The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable and other current liabilities approximate fair values due to the short-term nature of these instruments. The Company’s long-term debt consists of $21,111,218, of which $11,500,000 is current. The estimated fair value of this debt approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market interest rates.

Concentration of Credit Risks. Financial instruments that potentially subject the Company to concentrations of credit risk are cash equivalents and accounts receivable. Cash and cash equivalents are invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. The Company has not experienced any significant losses on its deposits of cash and cash equivalents. In regard to trade receivables, the Company performs ongoing evaluations of its customers’ financial condition as well as general economic conditions and, generally, requires no collateral from its customers. On March 31, 2025, the amount due from two customers represented approximately 23% and 15% of accounts receivable, respectively.

Leases. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021. Early adoption is permitted. The Company has adopted ASU 2016-02 as of January 1, 2022. The adoption of the standard did not have a material impact on the balance sheet.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recently Issued Accounting Pronouncements Adopted. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The amendments in this Update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in this Update retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

Recent Accounting Pronouncements. Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the Company’s condensed consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

Segment Reporting. The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and Chief Executive Officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company’s primary revenue streams include inventory management solutions and the sale of corrugated packaging materials. Based on the CODM’s evaluation and internal reporting, the Company has two reportable segments: Inventory Management Solutions and Corrugated Packaging.

Reclassifications. Certain prior period amounts have been reclassified to conform to the current period presentation, including amounts related to the Corrugated Packaging Business, which was classified as a discontinued operations. These reclassifications had no impact on previously reported net income or stockholders’ equity.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. GOING CONCERN

The condensed consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has negative cash flows from operations, incurred a loss since inception resulting in an accumulated deficit of $115,118,774 as of March 31, 2025 and further losses are anticipated in the development of its business. These factors raise substantial doubts about the Company’s ability to continue as a going concern for a period of 12 months from the filing date of this Form 10-Q.

As of March 31, 2025, the Company had approximately $0.4 million in cash and cash equivalents as compared to $0.2 million at December 31, 2024. The Company expects that its current cash and cash equivalents, approximately $0.2 million as of the date of this annual report, will not be sufficient to support its projected operating requirements for at least the next 12 months from this date.

The Company expects to need additional capital in order to increase revenues above current levels. Any additional equity financing, if available, may not be on favorable terms and would likely be significantly dilutive to the Company’s current stockholders, and debt financing, if available, may involve restrictive covenants. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will likely have a materially adverse effect on its business, financial condition and results of operations. The Company raised capital in 2024 and will continue to look to reduce costs in 2025 and raise capital as required for its operations. These consolidated condensed financial statements do not include any adjustments that might result from the Company’s inability to continue as a going concern.

4. ACQUISITIONS AND DIVESTITURES

Effective October 1, 2022, the Company acquired 100% of the issued and outstanding membership interests of Forever 8.

During fiscal year 2024, the Company entered into multiple amendments with the former owners of Forever 8 that significantly altered the original acquisition consideration. These changes included:

	●	The forgiveness of $5.4 million in principal on the Promissory Notes,
	●	The waiver of 215,000 non-voting preferred membership units initially included in the acquisition terms,
	●	The release of $6.1 million in contingent consideration, which was recognized as a gain in other income during the year ended December 31, 2024, and
	●	The forgiveness and conversion of approximately $5.7 million in accrued interest on the Promissory Notes, resulting in the issuance of approximately 1.9 million shares of the Company’s common stock. The remaining forgiven interest, totaling $3.86 million, was recorded as a capital contribution to additional paid-in capital (APIC) due to the related-party nature of the transaction.

These modifications resulted in a substantial reduction in the total consideration payable under the original purchase agreement.

Discontinued Operations

On November 22, 2024, Eightco Holdings Inc. (the “Company”) entered into an Asset Purchase Agreement (the “APA”) to sell substantially all of the assets of its wholly owned subsidiary, Ferguson Containers, Inc. (the “Corrugated Packaging Business”), to Ferguson Containers, LLC, a New Jersey limited liability company controlled by certain management employees of the Corrugated Packaging Business (the “Buyers”). This sale was completed on April 7, 2025. See Subsequent events Note 23 for more details.

As a result of entering into the APA, the Company has classified the operations of Ferguson Containers as discontinued operations in the consolidated financial statements for all periods presented. Assets and liabilities associated with Ferguson Containers have been classified as “held for sale” as of March 31, 2025 and December 31, 2024.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. ACQUISITIONS AND DIVESTITURES (continued)

The following summarizes the components of the assets and liabilities from discontinued operations to be divested as of March 31, 2025 and December 31, 2024:

SCHEDULE OF DISCONTINUED OPERATIONS

	March 31,		December 31,
	2025		2024

ASSETS
Current assets:
Cash and cash equivalents	$	125,431	$	168,323
Accounts receivable, net		771,162		788,317
Inventories		179,923		101,577
Prepaid expenses and other current assets		144,668		105,249
Property and equipment, net		641,271		634,773
Total assets	$	1,862,455	$	1,798,239

LIABILITIES
Current liabilities:
Accounts payable	$	168	$	2,980
Accrued expenses and other current liabilities		24,998		31,775
Income tax payable		11,228		72,976
Deferred tax liabilities		-		-
Total liabilities	$	36,394	$	107,731

The following summarizes the components of net income from discontinued operations for the three months ended March 31, 2025 and 2024:

	2025		2024
	Three Months Ended March 31,
	2025		2024

Revenues		1,773,929		1,661,123
Cost of revenues		1,276,685		1,164,371
Gross profit:		497,244		496,752

Operating expenses:
Selling, general and administrative		393,013		334,016
Restructuring and severance		-		-
Operating income		104,231		162,736

Other (expense) income:
Interest (expense)		-		-
Other income		1,322		4,092
Total other income, net		1,322		4,092
Income before income taxes		105,553		166,828
Income tax benefit		-		-
Net income from discontinued operations	$	105,553	$	166,828

The following summarizes the components of cash flows from discontinued operations for the three months ended March 31, 2025 and 2024:

	For the Three Months Ended March 31, 2025			For the Three Months Ended March 31, 2024
Cash flows from operating activities:
Net income	$	105,553		$	166,828
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		37,992			49,496
Changes in assets and liabilities:
Accounts receivable		17,155			(260,688	)
Inventories		(78,346	)		26,359
Prepaid expenses and other current assets		(39,419	)		15,475
Accounts payable		(2,812	)		31,029
Accrued expenses and other current liabilities		(6,777	)		726
Income tax payable		(61,748	)		-

Net cash provided by (used in) operating activities		(28,402	)		29,225

Cash flows from investing activities:
Repayments (proceeds) from/to Eightco Holdings, Inc.		30,000			(1,285,000	)
Purchases of property and equipment		(44,490	)		-

Net cash used in investing activities		(14,490	)		(1,285,000	)

Net decrease in cash and cash equivalents		(42,892	)		(1,255,775	)
Cash and cash equivalents, beginning of the period		168,323			1,358,806
Cash and cash equivalents, end of the period	$	125,431		$	103,031

As a result of this classification, prior period amounts have been reclassified to conform to the current period presentation.

EIGHTCO HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5. RESTRUCTURING AND SEVERANCE

Restructuring and severance charges consist of the following for the three months ended March 31, 2025 and 2024, respectively:

SCHEDULE OF RESTRUCTURING AND SEVERANCE

	March 31, 2025		March 31, 2024

Severance expense	$	-	$	1,404,038
Rent expense		-		10,800
Total restructuring and severance	$	-	$	1,414,838

The changes in the carrying amount of restructuring and severance liabilities for the period from January 1, 2025 through March 31, 2025 consisted of the following:

Balance, January 1, 2025	$	3,060,388
Additions and adjustments		-
Payments and adjustments		-
Balance, March 31, 2025	$	3,060,388

6. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at March 31, 2025 and December 31, 2024:

SCHEDULE OF ACCOUNTS RECEIVABLE

	March 31, 2025			December 31, 2024

Trade accounts receivable	$	1,445,182		$	2,440,366
Less: allowance for credit losses		(60,000	)		(60,000	)
Total accounts receivable		1,385,182			2,380,366
Less: accounts receivable – discontinued operations		(771,162	)		(788,317	)
Accounts receivable – continuing operations	$	614,020		$	1,592,049

7. INVENTORIES

Inventories consist of the following at March 31, 2025 and December 31, 2024:

SCHEDULE OF INVENTORIES

SEC Form 10-Q filed by Eightco Holdings Inc.