UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
or
| 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:
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction | (I.R.S. Employer | |
| of Incorporation or Organization) | Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(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 | ||
| The
|
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.
☒
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).
☒
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 ☐ |
| 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
As of August 7, 2026, there were shares of the registrant’s common stock outstanding.
EIGHTCO HOLDINGS INC.
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the period ended June 30, 2026 (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 and include, without limitation, statements about: our ability to raise capital, and access the capital markets, including through our At-The-Market equity offering program; our Digital Asset Treasury Strategy, including our ability to acquire, hold, and liquidate digital assets, expectations regarding the fair value and volatility of our digital asset holdings (including Worldcoin (WLD), Ethereum (ETH), and U.S. dollar-denominated stablecoins), and the impact of fair value changes on our reported earnings; our strategic investments in privately held companies (including OpenAI, Beast Industries, and Mythical Games), including expectations about their future value, liquidity, and impairment risk; our liquidity position and ability to fund operations and meet our obligations for at least the next twelve months; management’s assessment of going concern and our ability to continue as a going concern; our expectations regarding Forever 8’s operations, including customer relationships, revenue concentration, credit loss estimates, and the outcome of ongoing discussions with our largest customer; the adequacy of our internal control over financial reporting and our plans to remediate the identified material weakness, including our anticipated engagement of external advisors; our expected cash use rate, consulting fees, and other contractual obligations; and our future financial performance, results of operations, and competitive position,. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “intends,” “may,” “plans,” “potential,” “predict,” “should,” “will,” “would” 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 of 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 conform these statements to actual results, unless required by law.
You should not place undue reliance on forward-looking statements. The forward-looking statements contained in this Quarterly Report are subject to substantial risks and uncertainties that could cause, actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others: the volatility in the market prices of digital assets, including Worldcoin (WLD) and Ethereum (ETH), which could result in significant gains or losses on our digital asset holdings and material volatility in our reported earnings; the illiquidity of our strategic investments in privately held companies, which may prevent us from realizing value from those investments when needed; our customer concentration, with one customer representing approximately 99% of our revenues, and the significant deterioration in the creditworthiness of that customer that has already resulted in bad debt expense and impairment charges; changes in regulatory requirements affecting digital assets, including custody, trading, classification, and taxation; cybersecurity risks and risks associated with our reliance on third-party digital asset custodians; our ability to successfully remediate the material weakness in our internal control over financial reporting; our ability to attract and retain key personnel; the success of our Digital Asset Treasury Strategy and our strategic investments in frontier technology companies; the accuracy of our estimates and judgments, including those related to fair value, expected credit losses, and impairment; our ability to maintain compliance with Nasdaq listing requirements; dilution from future equity issuances under our ATM program or otherwise; and other risks and uncertainties described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), which was filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2026, and Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. You should carefully consider that information before you make an investment decision.
These and other factors discussed in this Quarterly Report could cause results to differ materially from those expressed any forward-looking statements made by us or on our behalf. Given these uncertainties, you should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| 3 |
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 Texas corporation, and all of our consolidated subsidiaries and variable interest entities.
| 4 |
PART I - FINANCIAL INFORMATION
EIGHTCO HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Digital assets, at fair value | ||||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Other investments | ||||||||
| Loan held-for-investment | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related parties | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Accrued expenses and other current liabilities – related parties | ||||||||
| Line of credit | ||||||||
| Line of credit – related parties | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ par value, shares authorized and shares outstanding at June 30, 2026 and December 31, 2025, respectively | ||||||||
| Common stock, $ par value, and shares authorized and and shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Foreign currency translation | ||||||||
| Total stockholders’ equity attributable to Eightco Holdings Inc. | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See the accompanying notes to the condensed consolidated financial statements.
| 5 |
EIGHTCO HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For
the Three Months Ended | For
the Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues, net | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Impairments | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-operating income (expense): | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on divestiture | ||||||||||||||||
| Change in fair value of digital assets | ( | ) | ||||||||||||||
| Change in fair value of short-term investments | ||||||||||||||||
| Gain on extinguishment of liabilities | ||||||||||||||||
| Other income | ||||||||||||||||
| Total non-operating income (expense) | ( | ) | ( | ) | ||||||||||||
| Net income (loss) before income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense (benefit) | ( | ) | ||||||||||||||
| Net income (loss) from continuing operations | $ | $ | ( | ) | ( | ) | ( | ) | ||||||||
| Net income from discontinued operations | ||||||||||||||||
| Net income (loss) | $ | ( | ) | ( | ) | ( | ) | |||||||||
| Net loss attributable to non-controlling interest | ||||||||||||||||
| Net income (loss) attributable to Eightco Holdings, Inc. | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) per share: | ||||||||||||||||
| Net income (loss) per share – basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per share – diluted | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average number of common shares outstanding – basic | ||||||||||||||||
| Weighted average number of common shares outstanding – diluted | ||||||||||||||||
See the accompanying notes to the condensed consolidated financial statements.
| 6 |
EIGHTCO HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
For
the Three Months Ended | For
the Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Foreign currency translation – unrealized gain (loss) | ( | ) | ( | ) | ||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
See the accompanying notes to the condensed consolidated financial statements.
| 7 |
EIGHTCO HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Common Stock | Additional Paid in | Non controlling | Retained Earnings (Accumulated) | Accumulated Other | ||||||||||||||||||||||||
| Shares | Amount | Capital | Interest | Deficit | Income | Total | ||||||||||||||||||||||
| Balances, January 1, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Issuance of common stock - ATM | ||||||||||||||||||||||||||||
| Option to repurchase shares | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Share-based compensation expense | ||||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Issuance of common stock - ATM | ||||||||||||||||||||||||||||
| Issuance of common stock – warrants | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation expense | ||||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Balances, January 1, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Issuance of common stock to note holders – interest | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock to vendors for settlement of liabilities | ||||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
See the accompanying notes to the condensed consolidated financial statements.
| 8 |
EIGHTCO HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization – continuing operations | ||||||||
| Impairment | ||||||||
| Amortization of debt issuance costs | ||||||||
| Amortization of prepaid share-based compensation | ||||||||
| Share-based compensation | ||||||||
| Change in fair value of digital assets | ||||||||
| Allowance for credit losses | ||||||||
| Gain on sale of assets | ( | ) | ||||||
| Gain on disposal of short-term investments | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Discontinued operations | ( | ) | ||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment – continuing operations | ( | ) | ||||||
| Purchases of digital assets | ( | ) | ||||||
| Purchases of short-term investments | ( | ) | ||||||
| Purchase of other investments | ( | ) | ||||||
| Proceeds from sale of short-term investments | ||||||||
| Repayment of principal under loans held-for-investment | ||||||||
| Proceeds from sale of assets of Ferguson Containers, Inc. | ||||||||
| Purchases of property and equipment – discontinued operations | ( | ) | ||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from issuance of common stock | ||||||||
| Prepayment for share repurchase option | ( | ) | ||||||
| Net (repayments) borrowings under line of credit | ( | ) | ||||||
| Repayments under convertible notes payable – related parties | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of the period | ||||||||
| Cash and cash equivalents, end of the period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
See the accompanying notes to the condensed consolidated financial statements.
| 9 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
As used herein, “Eightco,” “we,” “us,” “our,” and the “Company” refer to Eightco Holdings Inc., a Texas corporation, and its consolidated subsidiaries. The Company was originally incorporated on September 21, 2021 under the laws of the State of Nevada and converted to a Delaware corporation on March 9, 2022 pursuant to a plan of conversion with its former parent, Vinco Ventures, Inc. (“Vinco” or the “Former Parent”). On February 2, 2026, we changed our state of domicile to the State of Texas.
Operating Structure and Recent Changes
Historically, the Company operated multiple business lines, including:
| ● | Forever 8 Inventory Cash Flow Solutions (“Forever 8”) | |
| ● | Corrugated Packaging Business, operated through Ferguson Containers, Inc. | |
| ● | Web3 operations, including BTC mining hardware sales and NFT development |
The Company has since exited its non-core operations. Forever 8 now represents the Company’s sole operating business.
Forever 8, acquired on October 1, 2022, provides inventory funding and purchasing services to e-commerce retailers and remains the Company’s core operating platform.
On April 7, 2025, the Company completed the sale of the assets comprising its Corrugated Packaging Business. All operations related to this business ceased as of that date. The Company previously completed its wind-down of Web3 and BTC mining hardware sales activities and does not intend to resume revenue-generating operations in that area.
Adoption of Digital Asset Treasury Strategy
On September 8, 2025, the Company’s Board of Directors approved a Digital Asset Treasury (“DAT”) Strategy under which the Company deploys a portion of its excess liquidity, operating cash flows, and capital from financing activities into digital assets as part of its long-term capital allocation framework.
Under this strategy, the Company holds various digital assets, including Worldcoin (WLD), Ethereum (ETH), and USD denominated stablecoins for treasury, liquidity management, and strategic investment purposes. The Company does not currently generate revenue from its digital asset holdings. Digital assets are custodied with institutional third-party providers, including Kraken, Coinbase, and FalconX.
The Company adopted ASU 2023-08 effective January 1, 2025. Eligible digital assets are measured at fair value with changes recognized in net income.
Strategic Investments in Frontier Technology Companies
In addition to its digital asset holdings, the Company deploys capital into strategic equity investments in privately-held frontier technology companies as part of its long-term capital allocation framework. The Company’s investment philosophy centers on sectors it believes are fundamental to the future of authentication, digital identity, and the AI-driven economy—including blockchain infrastructure, human verification, artificial intelligence platforms, and next-generation consumer distribution. These investments are intended to complement the Company’s digital asset treasury strategy and position the Company at the intersection of transformative technology platforms. See Note 11 — Other Investments for additional information.
Corporate Organization
As of June 30, 2026, Eightco had the following wholly-owned subsidiaries:
| ● | Forever 8 Fund LLC | |
| ● | Ferguson Containers, Inc. (inactive following divestiture) | |
| ● | Orb Subsidiary One, LLC | |
| ● | AI Innovation Capital LLC |
Forever 8’s wholly owned foreign subsidiaries:
| ● | Forever 8 UK, Ltd. | |
| ● | Forever 8 Fund EU Holdings BV |
In
addition, the Company owns
| 10 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION (continued)
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 and six months ended June 30, 2026 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, 2025 included in the Annual Report.
Liquidity
and Going Concern. In accordance with ASC 205-40, management has evaluated whether there are conditions or events, considered in
the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the
date these condensed consolidated financial statements are issued. For the six months ended June 30, 2026, the Company reported an operating
loss of $
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 three months or less when purchased to be cash equivalents.
Digital Assets. Digital assets primarily consist of cryptocurrencies and other crypto-tokens held for treasury, investment, or operational purposes. Effective January 1, 2025, the Company adopted ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60). Under this guidance, eligible crypto assets are measured at fair value at each reporting date, with changes in fair value recognized in net income in the period in which they occur. Upon adoption, historical impairment-only accounting ceased. Digital assets are presented on the face of the condensed consolidated balance sheets as “Digital assets, at fair value.” Assets expected to be converted into cash or otherwise used to fund operations within twelve months are classified as current assets; all other digital assets are classified as noncurrent assets. The Company determines fair value using quoted prices in its principal market for each digital asset at the measurement time. The principal market is identified as the market with the greatest volume and level of activity for the digital asset that the Company can access, and is assessed on a periodic basis. As of June 30, 2026, the Company’s principal markets consisted primarily of established institutional trading venues, including Kraken and Coinbase. Digital assets with quoted prices in active markets are classified as Level 1 in the fair value hierarchy. When observable market inputs other than quoted prices are used (such as certain wrapped tokens, restricted tokens, or stablecoins whose value is not derived solely from exchange-traded prices), such assets are classified as Level 2. The Company did not classify any digital assets as Level 3 during the periods presented. The Company’s U.S. dollar-denominated stablecoin holdings (USDC and USDT) are within the scope of ASU 2023-08 and are measured at fair value with changes recognized in net income. Fair value of stablecoins approximates their U.S. dollar-denominated face value given their pegged nature to the U.S. dollar. Realized and unrealized gains and losses from changes in the fair value of digital assets are recorded within “Change in fair value of digital assets” in the condensed consolidated statements of operations. Realized gains and losses on disposals are determined using the specific identification method. Transaction costs incurred in connection with the acquisition or disposition of digital assets, including exchange fees and related charges, are expensed as incurred and are not capitalized into the cost basis of the digital assets. Digital assets are held with third-party custodians and institutional trading counterparties. These arrangements expose the Company to counterparty, concentration, and safeguarding risks, including technological, operational, and cyber-security risks. The Company does not hold digital assets on behalf of third parties and therefore does not apply the guidance in SAB 121. As of the periods presented, the Company does not stake, lend, or pledge its digital assets, and there are no digital-asset collateral or borrowing arrangements outstanding.
| 11 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 period-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.
Inventory. 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 inventory for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors.
Other Investments. Other investments consist of equity interests in privately held companies that do not have readily determinable fair values. The Company has elected to apply the measurement alternative under ASC 321, Investments — Equity Securities, under which such investments are measured at cost, less any impairment, plus or minus observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company reassesses the availability of observable price changes each reporting period. During the periods presented, no observable price changes were identified that required remeasurement of the carrying value of the Company’s other investments. For each of its other investments, the Company has evaluated whether consolidation is required under ASC 810, Consolidation, and has concluded that consolidation is not required because (i) the Company does not hold a controlling financial interest under the voting interest model and (ii) either the investee is not a variable interest entity or, where the investee is a variable interest entity, the Company is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the entity’s economic performance. The Company also does not exercise significant influence over the operating and financial policies of the investees such that the equity method under ASC 323 would apply. Each reporting period, the Company performs a qualitative impairment assessment for each investment accounted for under the measurement alternative. Indicators of impairment include, but are not limited to, a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; a significant adverse change in the regulatory, economic, or technological environment of the investee; a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of the investment; and factors that raise significant concerns about the investee’s ability to continue as a going concern. If a qualitative assessment indicates that the investment is impaired, the Company estimates the fair value of the investment in accordance with ASC 820 and, if the fair value is less than the carrying amount, recognizes an impairment loss in earnings equal to the difference between the carrying amount and fair value.
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:
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.
Warrants. The Company evaluates warrants and other freestanding instruments to determine whether they should be classified as equity or as assets or liabilities in the consolidated balance sheets. Warrants that are freestanding financial instruments and are indexed to the Company’s own stock and meet the criteria for equity classification are recorded in equity at issuance and are not subsequently remeasured. Warrants that do not meet the criteria for equity classification are recorded as assets or liabilities at fair value upon issuance and remeasured to fair value at each reporting date, with changes in fair value recognized in earnings.
| 12 |
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.
Disaggregation of Revenue. The Company’s primary revenue stream includes the sale of consumer goods through its inventory management solutions business. The revenue stream for discontinued operations primarily includes 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 and loss . 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.
Foreign Currency Transactions and Translation. Eightco’s functional currency is the United States Dollar (“USD”) and the Forever 8 subsidiaries have functional currencies in Euro (“EUR”), British Pound Sterling (“GBP”), and USD.
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 consolidated balance sheets.
| 13 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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:
| June 30, 2026 | December 31, 2025 | |||||||
| Spot | ||||||||
| USD to EUR | $ | $ | ||||||
| USD to GBP | $ | $ | ||||||
For
the Three Months Ended | For
the Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Average | ||||||||||||||||
| USD to EUR | $ | $ | $ | $ | ||||||||||||
| USD to GBP | $ | $ | $ | $ | ||||||||||||
| 14 |
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 consolidated balance sheet as a direct deduction from the carrying value of the debt liability. Amortization of deferred financing costs is 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 June 30, 2026. 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)
Effective January 1, 2025, the Company adopted ASU 2023-08, which requires eligible digital assets to be measured at fair value, with changes in fair value recognized in earnings each reporting period. Digital assets that trade in active markets and have readily determinable fair values, including Worldcoin (WLD), Ethereum (ETH), and U.S. dollar-denominated stablecoins, are classified within Level 1 of the fair value hierarchy. Digital assets are valued based on quoted market prices obtained from principal market exchanges where the assets are actively traded.
The Company’s financial instruments that are not measured at fair value, including cash, accounts receivable, accounts payable, accrued expenses, and short-term borrowings, approximate fair value due to their short-term maturities.
No transfers between Level 1, Level 2, or Level 3 occurred during the periods presented.
Concentration of Credit Risks. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, digital assets held with third-party custodians, and accounts receivable. See Note 3 — Concentrations of Credit Risk.
| 15 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Issued Accounting Pronouncements Not Yet Adopted. In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its consolidated financial statements.
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. As of June 30, 2026, the Company operates as one reportable segment.
3. CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, digital assets held with third-party custodians, and accounts receivable. The Company evaluates concentrations on an ongoing basis and mitigates exposure through the use of established financial institutions and digital asset custodians, diversification of counterparties where practicable, and ongoing monitoring of customer creditworthiness. The Company has not experienced any losses on deposits or digital asset holdings during the periods presented.
Cash and Cash Equivalents. The Company maintains its cash balances with multiple U.S. financial institutions. Balances held with these institutions may, from time to time, exceed federally insured limits. As of June 30, 2026 and December 31, 2025, the majority of the Company’s cash balances exceeded federally insured limits.
Digital Asset Custodians. The Company’s digital assets are held with a limited number of institutional-grade third-party custodians. Balances held with digital asset custodians are not federally insured. The Company manages custodial risk through the use of multiple counterparties, ongoing evaluation of each custodian’s financial stability, and review of their security and safekeeping practices. From time to time, a significant portion of the Company’s digital assets may be concentrated with a single custodian. As of June 30, 2026, digital assets were held with the following custodians:
| June 30, 2026 | ||||||||
| Fair Value | % of Total | |||||||
| Kraken | % | |||||||
| Coinbase | % | |||||||
| FalconX | % | |||||||
| Total | $ | % | ||||||
The Company maintains a custody relationship with FalconX, although no digital assets were held with FalconX as of June 30, 2026.
Digital
Asset Composition. The Company’s digital asset holdings are concentrated in a limited number of crypto assets. As of June 30,
2026, approximately $
Accounts Receivable. The Company performs ongoing evaluations of customer creditworthiness and does not require collateral. As of June 30, 2026, one customer represented approximately 100% of total accounts receivable. The Company maintains an allowance for expected credit losses based on historical experience and forward-looking information. See Note 7 — Accounts Receivable for further discussion of a significant deterioration in the creditworthiness of the Company’s largest customer during the six months ended June 30, 2026 and the resulting increase in the allowance for expected credit losses.
Revenues
and Geographic Concentration. For the three and six months ended June 30, 2026 and 2025, one customer represented approximately
4. SHORT-TERM INVESTMENTS
Short-term investments consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Government securities | $ | $ | ||||||
| Mutual funds | ||||||||
| Total short-term investments | $ | $ | ||||||
| 16 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
5. RESTRUCTURING AND SEVERANCE
The changes in the carrying amount of restructuring and severance liabilities for the period from January 1, 2026 through June 30, 2026 consisted of the following:
| Balance, January 1, 2026 | $ | |||
| Additions and adjustments | ||||
| Payments and adjustments | ( | ) | ||
| Balance, June 30, 2026 | $ |
The restructuring and severance liabilities are included in accrued expenses as of June 30, 2026.
6. DIGITAL ASSETS
Digital assets consist of the following at June 30, 2026:
| June 30, 2026 | ||||||||
| Quantity | Fair Value | |||||||
| Worldcoin (WLD) – Level 1 | $ | |||||||
| Ethereum (ETH) – Level 1 | ||||||||
| Stablecoins (USDC, USDT) – Level 1 | ||||||||
| Total digital assets, at fair value | $ | |||||||
Digital assets consist of the following at December 31, 2025:
| December 31, 2025 | ||||||||
| Quantity | Fair Value | |||||||
| Worldcoin (WLD) – Level 1 | $ | |||||||
| Ethereum (ETH) – Level 1 | ||||||||
| Stablecoins (USDC, USDT) – Level 1 | ||||||||
| Total digital assets, at fair value | $ | |||||||
The Company’s digital assets are held with third-party custodians and institutional trading counterparties. These arrangements expose the Company to counterparty, concentration, and safeguarding risks, including technological, operational, and cybersecurity risks. The Company does not hold digital assets on behalf of third parties.
The changes in the carrying amount of digital assets for the period from January 1, 2026 through June 30, 2026 consisted of the following:
| Beginning balance, December 31, 2025 | $ | |||
| Purchases of digital assets | ||||
| Realized/unrealized gains (losses) | ( | ) | ||
| Sales of digital assets | ||||
| $ |
The following table presents the Company’s digital asset holdings by token, including cost basis, fair value, and unrealized gains (losses) as of June 30, 2026:
| Cost Basis | Fair Value |
Cumulative Unrealized Gain (Loss) | ||||||||||
| Token: | ||||||||||||
| WLD | $ | $ | $ | ( | ) | |||||||
| ETH | ( | ) | ||||||||||
| USDC / USDT | ||||||||||||
| Total | $ | $ | $ | ( | ) | |||||||
Unrealized gains (losses) represent the difference between the original cost basis and the fair value of each token as of the consolidated balance sheet date, based on the closing market price of each respective digital asset.
| 17 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. ACCOUNTS RECEIVABLE
Accounts receivable consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Trade accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Total accounts receivable | $ | $ | ||||||
The
allowance for credit losses was $
During
the three and six months ended June 30, 2026, the Company’s largest customer, a distributor of consumer cellular products that
historically accounted for a substantial majority of the Company’s Forever 8 revenues, experienced a significant deterioration
in its financial condition, including the liquidation of inventory positions and an inability to satisfy amounts owed to the Company
on a timely basis. In response, the Company suspended new order fulfillment for this customer, ceased purchasing new inventory to support
this customer relationship, recognized bad debt expense of $
During the six months ended June 30, 2026, the Company revised its loss-rate assumptions to reflect the significant deterioration in the creditworthiness of its largest customer described below, and increased the allowance accordingly. Management exercises significant judgment in determining expected credit losses, including in evaluating the amount and probability of any recoveries from ongoing customer discussions or other remedies. Actual credit losses may differ materially from management’s estimates, and additional charges may be required in future periods.
8. INVENTORY
Inventory consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Finished goods | $ | $ | ||||||
| Reserve for obsolescence | ( | ) | ||||||
| Total inventory | $ | $ | ||||||
The
reserve for obsolescence was $ and $
9. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Other current assets consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Deposits on inventory | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Deposits | ||||||||
| Other | ||||||||
| Total other current assets | $ | $ | ||||||
10. LOAN HELD-FOR-INVESTMENT
Loan held-for-investment consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Wattum Management Inc. – | $ | $ | ||||||
| Reichard Containers, LLC – | ||||||||
| Total loan held-for-investment | ||||||||
| Less: allowance for credit losses | ||||||||
| Loan held-for-investment | $ | $ | ||||||
Wattum Management Inc. is a non-controlling member of CW Machines, LLC, previously a related party, when CW Machines was doing business. The Wattum note is secured by assets of Wattum Management, Inc. The Wattum Management Inc. note is interest only with the entire principal balance due in October 2026.
Reichard
Containers, LLC purchased the assets of Ferguson Containers, Inc. on April 7, 2025. The Reichard note is secured by assets of Reichard
Containers, LLC. The Reichard note is due on April 2035 and with monthly payments of $
Expected credit losses for loan held for investment are based on management’s assessment of credit risk associated with the loan, including consideration of factors such as the financial condition of the entity, historical payment behavior, and any collateral or guarantees provided. The Company determined it was not necessary to record an allowance for credit losses as of June 30, 2026 and December 31, 2025.
| 18 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
11. OTHER INVESTMENTS
Other investments consist of the Company’s minority equity investments in privately-held companies, accounted for under the measurement alternative. The following table summarizes the carrying value of these investments as of June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Mythical Games, Inc. | $ | $ | ||||||
| Beast Industries | ||||||||
| OpenAI (indirect investment) | ||||||||
| Total other investments | $ | $ | ||||||
Mythical Games, Inc.
In
October 2025, the Company invested $
Beast Industries
During
the six months ended June 30, 2026, the Company acquired a minority equity interest in Beast Industries, a privately-held company, for
total cash consideration of $
OpenAI
During
the six months ended June 30, 2026, the Company acquired an indirect interest in OpenAI through a structured investment vehicle (the
“SPV”) sponsored by an unaffiliated third party, for total cash consideration of $
The
Company’s interest in the SPV does not have a readily determinable fair value and is accounted for using the measurement alternative
under ASC 321, pursuant to which the investment is recorded at cost, less any impairment, and adjusted for observable price changes in
orderly transactions for identical or similar investments. As of June 30, 2026, the carrying value of the investment was $
12. PROPERTY AND EQUIPMENT, NET
Property
and equipment were $ and $
| 19 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
13. INTANGIBLE ASSETS, NET
Intangible
assets were $
14. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Payroll and related benefits | $ | $ | ||||||
| Professional fees | ||||||||
| Accrued interest | ||||||||
| Accrued rent | ||||||||
| Accrued other taxes | ||||||||
| Other | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Lines of credit, %-% | $ | $ | ||||||
For the three months ended June 30, 2026 and 2025, interest expense under lines of credit was $ and $, respectively. For the six months ended June 30, 2026 and 2025, interest expense under lines of credit was $ and $, respectively.
The lines of credit were previously secured by the Company’s inventory. Following the disposition of the Company’s inventory during the six months ended June 30, 2026, the lines of credit are currently unsecured.
16. LINES OF CREDIT – RELATED PARTIES
Principal due under the lines of credit – related parties was as follows at June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | |||||||
| Lines of credit, | $ | $ | ||||||
During the six months ended June 30, 2026, certain counterparties previously classified as related parties ceased to meet the definition of a related party under ASC 850 in connection with changes in the Company’s management and the settlement of a seller note. Accordingly, amounts previously classified as related-party balances were reclassified to third-party balances during the period.
For
the three months ended June 30, 2026 and 2025, interest expense under lines of credit – related parties was $
The lines of credit were previously secured by the Company’s inventory. Following the disposition of the Company’s inventory during the six months ended June 30, 2026, the lines of credit are currently unsecured.
| 20 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
17. INCOME TAXES
Eightco Holdings Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income.
Forever
8 Fund, LLC, Cryptyde Shared Services, LLC, Orb Subsidiary One, LLC, and AI Innovation Capital LLC are limited liability companies which
are disregarded entities for income tax purposes and are owned
CW
Machines, LLC is a limited liability company for income tax purposes and is owned
Ferguson Containers is taxed as a corporation and pays corporate federal, state and local taxes on income.
Forever 8 UK Ltd. is taxed as a corporation and pays foreign taxes on income.
F8 Fund EU Holdings BV is taxed as a corporation and pays foreign taxes on income.
For
the three months ended June 30, 2026 and 2025, income tax (benefit) expense was $ and $, respectively. For the six months ended June
30, 2026 and 2025, income tax (benefit) expense was $ and $(
There
are
The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2021 and thereafter are subject to examination by the relevant taxing authorities.
As
of June 30, 2026, the Company had a net operating loss carryforward for federal income tax
purposes of approximately $
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted, which includes significant amendments to the Internal Revenue Code. Key provisions include:
| ● | Limitations on the deductibility of certain interest and R&D expenses; | |
| ● | Modifications to the foreign-derived intangible income (“FDII “) and global intangible low-taxed income (“GILTI”) regimes. |
The Company evaluated the impact of the legislation on its consolidated financial statements, including deferred tax assets and liabilities, and incorporated the effects of the enacted changes in these condensed consolidated financial statements for the period ended June 30, 2026, consistent with ASC 740-10-45-15. The Company continues to evaluate the impact of the OBBBA on its effective tax rate in future periods.
| 21 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
18. STOCKHOLDERS’ EQUITY
Common Stock
The Company is authorized to issue shares of common stock, par value $ per share. As of June 30, 2026 and December 31, 2025, the Company had and shares of common stock issued and outstanding, respectively. In connection with the Company’s redomestication to Texas effective February 2, 2026, the authorized shares of common stock were increased from to shares, par value $ per share.
Preferred Stock
As of June 30, 2026 and December 31, 2025, the Company had issued and outstanding shares of Series A Preferred Stock.
Common stock issuances during the six months ended June 30, 2026:
On
January 5, 2026, the Company issued shares of common stock to a consultant in settlement of past services rendered to the Company
with a grant-date fair value of $
On
March 11, 2026, the Company issued shares of common stock to members of the board related to their agreements with a grant-date
fair value of $
On
March 12, 2026, the Company granted stock options to directors, officers and employees to purchase an aggregate of shares of
common stock at an exercise price of $
On March 25, 2026, the Company released shares of common stock to the Company’s former Chairman of the Board related to his restricted stock which was vested upon his departure from the board of directors. For the three and six months ended June 30, 2026, the Company recognized share-based compensation expense of $ and $, respectively.
On
May 22, 2026, the Company issued shares of common stock to members of the board related to their agreements with a grant-date
fair value of $
On
May 28, 2026, the Company issued shares of common stock to pre-funded warrant holders. The Company previously received proceeds
of $
During
the three and six months ended June 30, 2026, the Company sold and shares under the Cantor Fitzgerald ATM agreement
for gross proceeds of $
| 22 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
18. STOCKHOLDERS’ EQUITY (continued)
On March 12, 2026, the Company’s Board authorized an increase of additional shares of common stock available for issuance under the 2022 Long-Term Incentive Plan.
Option to Repurchase Shares
During
the six months ended June 30, 2026, the Company paid $
Equity Awards and Share-Based Compensation
The grant-date fair value of equity-classified awards is recognized as compensation expense on a straight-line basis over the requisite service period of each award, with forfeitures recognized as they occur. The fair value of stock options is estimated using the Black-Scholes option-pricing model; the fair value of restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the grant date. For the six months ended June 30, 2026, the Company used the following weighted-average assumptions in the Black-Scholes model for options granted: expected term of years, expected volatility of %, risk-free rate of %, and expected dividend yield of %.
Summary of Outstanding Warrants as of June 30, 2026
Number Outstanding | Exercisable | Weighted Average Remaining Term | Classification | |||||||||||||
| Instrument: | ||||||||||||||||
| Strategic Advisor Warrants | Equity | |||||||||||||||
| Placement Agent Warrants | Equity | |||||||||||||||
| Total outstanding | ||||||||||||||||
The strategic advisor and placement agent warrant awards were issued as inducement grants, outside of the Company’s equity incentive plan.
The changes in the warrant activity for the period from January 1, 2026 through June 30, 2026 consisted of the following:
Number of Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding, January 1, 2026 | $ | |||||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited / Expired | - | - | ||||||||||||||
| Outstanding and Exercisable, June 30, 2026 | $ | $ | ||||||||||||||
| Vested and expected to vest, June 30, 2026 | $ | $ | ||||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Common Stock, which was $ and $ per share on June 30, 2026 and December 31, 2025, respectively.
A summary of the status of nonvested warrants subject to service-based vesting conditions as of and for the three months ended June 30, 2026 is presented below:
| Warrant Activity | ||||||||
| Number of Units | Weighted- Average Grant- Date Fair Value | |||||||
| Nonvested, January 1, 2026 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ( | ) | ||||
| Forfeited | ||||||||
| Nonvested, June 30, 2026 | $ | |||||||
Summary of Outstanding Options
| 23 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
18. STOCKHOLDERS’ EQUITY (continued)
Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding, January 1, 2026 | $ | - | ||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited / Expired | - | - | ||||||||||||||
| Outstanding, June 30, 2026 | $ | $ | ||||||||||||||
| Exercisable, June 30, 2026 | $ | - | $ | |||||||||||||
| Vested and expected to vest, June 30, 2026 | $ | $ | ||||||||||||||
A summary of the status of nonvested stock options as of and for the six months ended June 30, 2026 is presented below:
| Stock Option Activity | ||||||||
| Number of Units | Weighted- Average Grant- Date Fair Value | |||||||
| Nonvested, January 1, 2026 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ||||||||
| Nonvested, June 30, 2026 | $ | |||||||
Summary of Outstanding Restricted Stock and Restricted Stock Units
The Company did not have any outstanding restricted stock and restricted stock units as of June 30, 2026.
A summary of the status of nonvested restricted stock units as of and for the three and six months ended June 30, 2026 is presented below:
| Restricted Stock Unit Activity | ||||||||
| Number of Units | Weighted- Average Grant- Date Fair Value | |||||||
| Nonvested, January 1, 2026 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Nonvested, June 30, 2026 | $ | |||||||
The Company issued the restricted stock units upon vesting.
Share-based compensation expense recognized for the three months ended June 30, 2026 was $. Share-based compensation expense recognized for the six months ended June 30, 2026 was $. The following is a disaggregated breakdown of stock compensation expense for the three months ended June 30, 2026:
| Fair Value | Prior Expensed | For the Six Months Ended June 30, 2026 | Unrecognized Expense | |||||||||||||
| Instrument: | ||||||||||||||||
| Strategic Advisor Warrants | $ | $ | $ | $ | ||||||||||||
| Restricted Stock | ||||||||||||||||
| Stock Options – Former Chairman of Board* | ( | ) | ||||||||||||||
| Restricted Stock Units | ||||||||||||||||
| Stock Issuance | ||||||||||||||||
| Stock Options | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| * | The stock options to the former chairman of the Board were forfeited upon departure. |
| 24 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table sets forth the computation of basic and diluted earnings (loss) per share for the periods presented:
For the three months ended June 30, 2026, the Company reported net income; however, basic and diluted earnings per share are the same because the exercise prices of all outstanding options and warrants exceeded the average market price of the Company’s common stock during the period, and accordingly the effect of their inclusion would have been anti-dilutive under the treasury stock method. For the three months ended June 30, 2025 and the six months ended June 30, 2026 and 2025, the Company reported a net loss and all potentially dilutive common share equivalents were excluded from the calculation of diluted loss per share as their inclusion would have been anti-dilutive.
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Warrants for noteholders and placement agents | ||||||||||||||||
| Warrants for equity investors | ||||||||||||||||
| Other shares to be issued | ||||||||||||||||
| Weighted average shares outstanding – diluted | ||||||||||||||||
June 30, 2026 | June 30, 2025 | |||||||
| Options | ||||||||
| Warrants | ||||||||
| Convertible notes payable issued in acquisition of Forever 8 Fund, LLC | ||||||||
| Total common stock equivalents | ||||||||
20. COMMITMENTS AND CONTINGENCIES
Operating Leases. The Company leases certain office space from an entity affiliated through common ownership under an operating lease agreement on a month-to-month basis. The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.
For
the three months ended June 30, 2026 and 2025, rent expense was $
Consulting Agreement. On September 9, 2025, the Company entered into a consulting agreement with Worldcoin Tower LLC to support the Company’s digital asset treasury strategy. Fees include:
| ● | 1%
of AUM up to $ | |
| ● | 0.5%
of AUM between $ | |
| ● | 0.25%
of AUM above $ | |
| ● | Milestone
payments based on treasury AUM exceeding $ | |
| ● | A
$ |
On
May 1, 2026, the Company entered into an Amended and Restated Consulting Agreement (the “A&R DACA”) with Worldcoin Tower
LLC (the “Consultant”), which amends and restates in its entirety the Consulting Agreement dated as of September 9, 2025,
between the Company and the Consultant (the “Original DACA”). Pursuant to the A&R DACA, the Consultant will continue
to provide consulting services with respect to the Company’s digital asset treasury strategy and expands the scope of the Consultant’s
engagement to a broader “Strategic Asset Strategy” consisting of two components: (1) the Digital Asset Treasury Strategy,
which remains focused on accumulating digital assets, and (2) a new Strategic Investment Strategy, which is focused on deploying capital
to invest in emerging companies. The A&R DACA also updates the applicable fee structure, whereby the Company will pay the Consultant
a consulting fee equal to
The
agreement has a five-year initial term with automatic five-year renewal. No equity awards were issued under this agreement. Consulting
expense for the three months ended June 30, 2026 was $
Master
Loan Agreement. On September 7, 2025, ORB Subsidiary One LLC, a wholly-owned subsidiary of the Company, entered into a Master Loan
Agreement providing up to $
Employment Agreements
On September 8, 2025, the Company entered into new employment agreements with its Chief Executive Officer, Kevin O’Donnell, and its Chief Financial Officer, Brett Vroman (together, the “Executives”). The agreements provided for one-year terms with an option for the Company to renew each agreement for an additional one-year term.
Chief Executive Officer – Kevin O’Donnell
Under
the September 8, 2025 agreement (the “Prior Agreement”), Mr. O’Donnell was entitled to an annualized base salary of $
Subject
to Board approval, Mr. O’Donnell also received
restricted stock units (“RSUs”) under the Prior Agreement, which vested in full after six months of continuous service.
The RSUs were granted with a grant date fair value of $
On June 5, 2026, the Company entered into an Amended and Restated Compensation Agreement (the “A&R Agreement”) with Mr. O’Donnell, which amends and restates in its entirety the Prior Agreement. The A&R Agreement provides for a term of up to three years commencing June 5, 2026, during which Mr. O’Donnell will continue to serve as Chief Executive Officer.
Under
the A&R Agreement, Mr. O’Donnell will receive an annual base salary of $
Mr. O’Donnell will be entitled to accrued but unpaid base salary and reimbursable expenses only, and all unvested equity awards will be forfeited upon a termination for Cause; and (iii) upon death or disability, Mr. O’Donnell (or his estate) will be entitled to accrued but unpaid base salary and reimbursable expenses, plus an additional six months of base salary and benefits, including, in the case of death, continuation of dependent benefits for six months.
Chief Financial Officer – Brett Vroman
Under
his agreement, Mr. Vroman will receive an annualized base salary of $
On September 9, 2025, the Company entered into Board of Directors Agreements (the “Director Agreements”) with three existing directors: Louis Foreman, Nic Caiano, and Frank Jennings (collectively, the “Directors”). The Director Agreements establish the terms of service, compensation, indemnification, and other obligations applicable to each Director. The agreements became effective on each Director’s respective appointment date. Under the Director Agreements, each Director:
| ● | Entitled
to an annual cash retainer of $ | |
| ● | Eligible
to receive equity compensation valued at up to $ | |
| ● | Eligible for discretionary bonuses in cash or equity at the Company’s sole discretion. No discretionary bonuses were granted to the Directors for the year ended December 31, 2025. | |
| ● | Is entitled to reimbursement for reasonable business expenses and will receive full indemnification, along with coverage under the Company’s directors’ and officers’ liability insurance program. |
On
April 27, 2026, the Company entered into a Board of Directors Agreement with Thomas Lee, pursuant to which Mr. Lee will receive annual
cash compensation of $
The Director Agreements also require each Director to comply with confidentiality obligations, fiduciary duties, conflict-of-interest restrictions, and certain termination-related provisions, including automatic resignation from officer positions upon separation.
| 25 |
EIGHTCO HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
21. SEGMENT REPORTING
The Company follows ASC 280, Segment Reporting, and determines its reportable segments based on the internal financial information reviewed by the Chief Executive Officer, who serves as the Company’s Chief Operating Decision Maker (“CODM”). The CODM evaluates the business on a consolidated basis for purposes of assessing performance, making operating decisions, allocating resources, and planning for future periods.
Historically,
the Company operated two reportable segments: (i) Forever 8, its Inventory Management Solutions business, and (ii) the Corrugated Packaging
Business. On April 7, 2025, the Company completed the sale of the assets comprising the Corrugated Packaging Business. Following the
divestiture, the Company operates as
On September 8, 2025, the Company initiated digital asset treasury management activities (“DAT Strategy”) as part of its broader corporate strategy to diversify its cash and liquidity management. These digital asset activities do not constitute a separate operating segment under ASC 280 because:
| ● | They are not managed as a distinct business unit. |
| ● | No discrete financial information is prepared or reviewed by the CODM for purposes of performance assessment. |
| ● | The CODM reviews digital asset activity only as part of consolidated corporate treasury management. |
Accordingly, digital asset treasury management activities are included within Corporate and do not represent a separate operating or reportable segment.
The Company therefore reports as one operating and reportable segment:
| ● | Forever 8 (Inventory Management Solutions) — the Company’s sole revenue-generating business. |
Corporate-level functions consisting primarily of centralized finance, treasury (including DAT-related activities), stock-based compensation, board costs, public company costs, interest expense, income taxes, and other non-operating items are not allocated to the Forever 8 segment. The CODM reviews Forever 8 working capital and operating assets to assess performance. Corporate assets include digital asset holdings, cash not used in Forever 8, goodwill, and other long-term corporate assets, none of which are allocated to operating segments. Segment assets reviewed by the CODM primarily include working capital assets for the Company’s operating business. Digital asset balances are monitored as part of corporate treasury and are not allocated to a segment.
The Company had no intersegment revenues during the periods presented. Segment information is presented in accordance with the manner in which the CODM internally evaluates operating performance and allocates resources.
22. SUBSEQUENT EVENTS
Repayment of Lines of Credit
On July 7, 2026, the Company repaid $
On July 24, 2026, the Company repaid $
Nasdaq Minimum Bid Price Notification
On
August 5, 2026, the Company received a written notification letter from the Listing Qualifications Department of The Nasdaq Stock Market
LLC (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days (from June 23, 2026 to August 4,
2026), the closing bid price of the Company’s common stock was below the minimum $1.00 per share required for continued listing
on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The notification letter has no immediate effect on the listing
or trading of the Company’s common stock, which continues to trade on The Nasdaq Capital Market under the symbol “ORBS.”
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until February 1, 2027, to
regain compliance. Compliance may be achieved if the closing bid price of the Company’s common stock is at least $
| 26 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Unless otherwise indicated, the terms “we,” “us,” “our,” “Eightco,” and the “Company” refer to Eightco Holdings Inc. together with its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
This section contains forward-looking statements within the meaning of the federal securities laws, including statements regarding our strategy, plans, future financial performance, liquidity, and capital allocation framework. These statements involve risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause such differences are discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report, as well as under “Risk Factors” in this Quarterly Report and in our most recent Annual Report on Form 10-K. We undertake no obligation to update any forward-looking statements except as required by law.
Overview
Eightco Holdings Inc. (NASDAQ: ORBS) is building the authentication and trust layer for the post-AGI world. Through a first-of-its-kind Worldcoin digital asset treasury strategy and a portfolio of strategic investments in frontier technology companies, the Company is establishing a universal foundation for digital identity and Proof of Human (PoH) verification. The Company’s mission is organized around three core pillars: consumer authentication, enterprise authentication, and gaming authentication.
The Company also operates Forever 8, an e-commerce inventory solutions business acquired in October 2022, which represents its sole revenue-generating operating segment.
Our corporate headquarters are located in Easton, Pennsylvania, and our common stock is listed on the Nasdaq Capital Market under the symbol “ORBS.”
Forever 8
Forever 8 provides funding solutions and inventory management services for e-commerce businesses, enabling sellers to maintain optimal stock levels without tying up their own capital. Forever 8 is the Company’s sole operating segment and primary source of revenue. For the fiscal years ended December 31, 2025 and 2024, Forever 8 generated revenues of $32,981,126 and $39,621,272, respectively. Forever 8’s revenue base is highly concentrated, with one customer representing approximately 89% and 75% of total revenues for the fiscal years ended December 31, 2025 and 2024, respectively.
Adoption of Digital Asset Treasury (“DAT”) Strategy
Strategy Overview
On September 8, 2025, our Board of Directors approved the adoption of a Digital Asset Treasury Strategy under which Eightco holds digital assets, primarily Worldcoin (WLD), as part of a long-term treasury reserve framework. Under this policy, we may allocate excess liquidity, operating cash flows, and proceeds from financing transactions to the acquisition of digital assets.
This strategy reflects a dual-pillar model combining (i) the operating performance of Forever 8, and (ii) long-term digital asset holdings designed to enhance our capital base and provide shareholders with exposure to emerging decentralized technologies.
Rationale for Strategy
Key factors underlying the DAT Strategy include:
| ● | The growth and potential of the Worldcoin ecosystem | |
| ● | The belief that certain digital assets may serve as long-term stores of value | |
| ● | The ability to report digital assets at fair value under ASU 2023-08 | |
| ● | Opportunities for differentiated long-term returns | |
| ● | The availability of capital to scale a treasury strategy of meaningful size | |
| ● | Management expects digital assets to remain a significant component of our long-term capital allocation framework. |
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Capital Raising Activities
During the quarter ended June 30, 2026, we completed substantial financing transactions to support the DAT Strategy:
| ● | We generated additional proceeds through our at-the-market (“ATM”) equity offering program. |
A significant portion of the ATM proceeds were deployed to acquire digital assets and invest in strategic investments. These capital raises materially strengthened our liquidity and expanded our consolidated balance sheet.
Digital Asset Acquisitions
Our holdings consist primarily of:
| ● | Worldcoin (WLD) | |
| ● | Ethereum (ETH) | |
| ● | U.S. dollar-denominated stablecoins | |
| ● | Other digital assets used for liquidity management, trade settlement, or operational purposes |
Digital assets are custodied with institutional-grade providers, including Kraken, Coinbase, and FalconX.
Custody, Concentrations and Transfer Restrictions
As of June 30, 2026, substantially all digital assets were held with a small number of U.S.-based institutional custodians under cold-storage arrangements. From time to time, a significant portion of our digital assets may be concentrated with a single custodian. Certain assets (including staking-ineligible or restricted tokens, if any) may be subject to withdrawal, settlement, or transfer restrictions pursuant to platform or network constraints. We continually evaluate custodian concentration and portability risk as part of our liquidity planning.
Accounting for Digital Assets
Effective January 1, 2025, we adopted ASU 2023-08, which requires eligible digital assets to be measured at fair value, with changes recognized in net income each reporting period.
Key effects include:
| ● | Digital assets are presented at fair value on our consolidated balance sheets | |
| ● | Unrealized gains and losses from price fluctuations flow through earnings | |
| ● | Earnings may be more volatile due to digital asset market movements | |
| ● | Historical impairment-only accounting no longer applies |
This measurement model increases transparency but introduces meaningful volatility tied to the valuation of Worldcoin and other digital assets.
Volatility and Earnings Sensitivity
Because we measure eligible crypto assets at fair value under ASU 2023-08, period-to-period changes in the market price of Worldcoin (WLD) and other digital assets will directly affect reported earnings and cash provided by (used in) operating activities to the extent realized on conversion. This may result in material earnings volatility unrelated to our Forever 8 operating performance.
| 28 |
Critical Accounting Policies and Significant Judgments and Estimates
There were no material changes to our critical accounting policies during the three months ended June 30, 2026, other than the adoption of ASU 2023-08, which requires eligible crypto assets to be measured at fair value with changes recognized in net income. Our significant accounting policies are described in Note 2 to the condensed consolidated financial statements included in this Quarterly Report and in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Key Components of our Results of Operations
Revenues
We generate the substantial majority of our revenues from inventory financing and inventory management services through our wholly owned subsidiary, Forever 8. Our revenues are primarily derived from the purchase and resale of consumer products to e-commerce retailers under our inventory management solutions model. Following the adoption of our Digital Asset Treasury (“DAT”) strategy in September 2025, the Company does not expect to generate revenue from digital asset activities.
Cost of Revenues
Cost of revenues includes the cost of purchased inventory, materials and supplies, internal labor and related benefits, subcontractor costs, depreciation, overhead, and shipping and handling costs. These costs are directly associated with our Forever 8 inventory management activities. We no longer incur costs related to the purchase or resale of Bitcoin mining equipment, as this line of business is no longer pursued.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include selling and marketing costs, payroll and employee-related expenses, administrative expenses, professional fees, insurance, technology and software costs, and other overhead required to support both our Forever 8 operations and our corporate infrastructure. SG&A also includes expenses associated with supporting the Digital Asset Treasury function, including custodial fees, compliance costs, and professional services related to digital asset oversight.
Restructuring and Severance Expenses
Restructuring and severance expenses consist of costs associated with organizational changes, including employee severance, benefits continuation, contract termination costs, and costs associated with facility consolidations or other restructuring activities. These expenses vary depending on management’s strategic initiatives.
Interest Expense and Income, Net
Interest expense reflects the cost of borrowings under our lines of credit and other financing arrangements used to support our Forever 8 inventory-financing activities. Interest income primarily includes earned interest on notes receivable and cash-equivalent investments, as well as yield earned on short-term instruments.
Change in Fair Value of Digital Assets
Beginning in September 2025, following the deployment of our Digital Asset Treasury strategy, the Company holds digital assets measured at fair value in accordance with ASU 2023-08. Changes in the fair value of digital assets including both realized and unrealized gains and losses are recognized in earnings in the period in which they occur. Because the DAT is not a revenue-generating activity, changes in fair value represent a key driver of period-over-period volatility in our results of operations.
Gain on Divestiture
Gain on divestiture represents gains recognized in connection with the sale of assets. This includes the gain recognized on the sale of the Ferguson Containers corrugated packaging business on April 7, 2025.
Gain on Extinguishment of Liabilities
Gain on extinguishment of liabilities includes gains recognized when outstanding liabilities are settled for amounts less than their carrying value, or when obligations are legally extinguished.
| 29 |
Other Income
Other income includes the interest income received from the Wattum Note and Reichard Containers Note.
Results of Operations
Three Months Ended June 30, 2026 versus Three Months Ended June 30, 2025
The following table sets forth information comparing the components of net (loss) income from continuing operations for the three months ended June 30, 2026 and 2025:
Three Months Ended June 30, | Period over Period Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Revenues, net | $ | 2,068,430 | $ | 7,578,646 | $ | (5,510,216 | ) | -72.7 | % | |||||||
| Cost of revenues | 1,968,184 | 6,333,350 | (4,365,166 | ) | -68.9 | % | ||||||||||
| Gross profit | 100,246 | 1,245,296 | (1,145,050 | ) | -92.0 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 6,698,406 | 2,451,832 | 4,246,574 | 173.2 | % | |||||||||||
| Impairments | 5,211,824 | - | 5,211,824 | 100.0 | % | |||||||||||
| Operating loss | (11,809,984 | ) | (1,206,536 | ) | (10,603,448 | ) | -878.8 | % | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest income (expense) | (352,582 | ) | (1,276,726 | ) | 924,144 | 72.4 | % | |||||||||
| Gain on divestiture | - | 1,231,774 | (1,231,774 | ) | -100.0 | % | ||||||||||
| Gain on extinguishment of liabilities | - | - | - | 0.0 | % | |||||||||||
| Change in fair value of digital assets | 29,324,737 | - | 29,324,737 | 100.0 | % | |||||||||||
| Change in fair value of short-term investments | 17,647 | - | 17,647 | 100.0 | % | |||||||||||
| Other income | 521,307 | 81,969 | 439,338 | 536.0 | % | |||||||||||
| Total other income (expense), net | 29,511,109 | 37,017 | 29,474,092 | 79,623.1 | % | |||||||||||
| Income (loss) before income taxes | 17,701,125 | (1,169,519 | ) | 18,870,644 | 1,613.5 | % | ||||||||||
| Income tax expense (benefit) | - | - | - | 0.00 | % | |||||||||||
| Net income (loss) from continuing operations | 17,701,125 | (1,169,519 | ) | 18,870,644 | 1,613.5 | % | ||||||||||
| Net income (loss) from discontinued operations | - | - | - | 0.0 | % | |||||||||||
| Net income (loss) | $ | 17,701,125 | (1,169,519 | ) | 18,870,644 | 1,613.5 | % | |||||||||
Revenue
For the three months ended June 30, 2026, revenues were $2,068,430, representing a decrease of $5,510,216, or 72.7%, compared to revenues of $7,578,646 for the three months ended June 30, 2025. The decrease was primarily attributable to a significant reduction in orders from the Company’s largest customer, which experienced a deterioration in its financial condition during the second quarter of 2026 as further described in Note 7, and to the Company’s continued strategic transition away from the Forever 8 online retail and liquidation-model business.
Cost of Revenues
Cost of revenues was $1,968,184 for the three months ended June 30, 2026, compared to $6,333,350 for the three months ended June 30, 2025, a decrease of $4,365,166, or 68.9%. The decrease correlates to the reduction in revenue volumes described above.
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Gross Profit
Gross profit decreased to $100,246 for the three months ended June 30, 2026, compared to gross profit of $1,245,296 for the three months ended June 30, 2025, a decline of $1,145,050, or 92.0%. Gross margin declined to 4.8% from 16.4% in the prior-year period. The decrease was driven primarily by the reduction in revenues and unfavorable product mix during the transition away from the online retail and liquidation-model operations.
Operating Expenses
Selling, general and administrative (“SG&A”) expenses were $6,698,406 for the three months ended June 30, 2026, compared to $2,451,832 for the three months ended June 30, 2025, an increase of $4,246,574, or 173.2%.
The increase was attributable to:
| ● | Bad debt expense of $1,836,366 recognized during the three and six months ended June 30, 2026 in respect of receivables from the Company’s largest customer, whose financial condition deteriorated during the period. |
| ● | Higher professional fees and advisory costs incurred in connection with the Company’s capital raising and the ongoing implementation of its Digital Asset Treasury strategy; |
| ● | Increased compensation and corporate overhead required to support expanded operations, including share-based compensation; and |
| ● | Higher technology, compliance, and custodial-related costs associated with digital asset oversight. |
The Company also recognized impairment charges of $5,211,824 during the three and six months ended June 30, 2026 relating to a receivable arising from the disposition of inventory by the Company’s largest customer without the Company’s authorization (see Note 7 — Accounts Receivable). There were no comparable impairment charges in the prior-year period.
Interest Expense
Net interest expense totaled $(352,582) for the three months ended June 30, 2026, compared to $(1,276,726) for the three months ended June 30, 2025, a decrease of $924,144, or 72.4%, reflecting lower average borrowings on the Company’s financing facilities.
Gain on divestiture
The Company recognized no gain on divestiture for the three months ended June 30, 2026, compared to a gain of $1,231,774 for the three months ended June 30, 2025 related to the sale of the Ferguson Containers corrugated packaging business completed on April 7, 2025.
Change in Fair Value of Digital Assets
The Company recognized a gain of $29,324,737 related to fair value changes of its digital asset holdings during the three months ended June 30, 2026, reflecting recovery in the market prices of Worldcoin (WLD) and Ethereum (ETH) during the quarter. The Company did not hold digital assets during the comparable 2025 period.
Change in Fair Value of Short-Term Investments
The Company recognized a gain of $17,647 related to fair value changes in its short-term investments during the six months ended June 30, 2026. There were no comparable amounts in the prior-year period.
Other Income
Other income increased to $521,307 for the three months ended June 30, 2026, from $81,969 in the prior-year period, an increase of $439,338, primarily due to interest earned on the Reichard Corrugated Note and other miscellaneous items.
Income tax expense
Income tax expense was $0 for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025. The Company continues to maintain a full valuation allowance on its net deferred tax assets.
Net income (loss)
Net income was $17,701,125 for the three months ended June 30, 2026, compared to a net loss of $(1,169,519) for the three months ended June 30, 2025.
Six Months Ended June 30, 2026 versus Six Months Ended June 30, 2025
The following table sets forth information comparing the components of net (loss) income from continuing operations for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30, | Period over Period Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Revenues, net | $ | 9,630,395 | $ | 17,492,633 | $ | (7,862,238 | ) | -44.9 | % | |||||||
| Cost of revenues | 9,314,888 | 15,434,078 | (6,119,190 | ) | -39.6 | % | ||||||||||
| Gross profit | 315,507 | 2,058,555 | (1,743,048 | ) | -84.7 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 17,426,952 | 4,681,257 | 12,745,695 | 272.3 | % | |||||||||||
| Impairments | 5,211,824 | - | 5,211,824 | 100.0 | % | |||||||||||
| Total operating expenses | 22,638,776 | 4,681,257 | 17,957,519 | 383.6 | % | |||||||||||
| Operating loss | (22,323,269 | ) | (2,622,702 | ) | (19,700,567 | ) | -751.2 | % | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest income (expense) | (629,300 | ) | (2,565,530 | ) | 1,936,230 | 75.5 | % | |||||||||
| Gain on divestiture | - | 1,231,774 | (1,231,774 | ) | -100.0 | % | ||||||||||
| Gain on extinguishment of liabilities | 870,000 | - | 870,000 | 100.0 | % | |||||||||||
| Change in fair value of digital assets | (37,177,137 | ) | - | (37,177,137 | ) | -100.0 | % | |||||||||
| Change in fair value of short-term investments | 23,666 | - | 23,666 | 100.0 | % | |||||||||||
| Other income | 801,261 | 103,867 | 697,394 | 671.4 | % | |||||||||||
| Total other income (expense), net | (36,111,510 | ) | (1,229,889 | ) | (34,881,621 | ) | -2,836.2 | % | ||||||||
| Income (loss) before income taxes | (58,434,779 | ) | (3,852,591 | ) | (54,582,188 | ) | -1,416.8 | % | ||||||||
| Income tax expense (benefit) | - | (28,793 | ) | 28,793 | 100.0 | % | ||||||||||
| Net income (loss) from continuing operations | (58,434,779 | ) | (3,823,798 | ) | (54,610,981 | ) | -1,428.2 | % | ||||||||
| Net income (loss) from discontinued operations | - | 105,553 | (105,553 | ) | -100.0 | % | ||||||||||
| Net income (loss) | $ | (58,434,779 | ) | $ | (3,718,245 | ) | $ | (54,716,534 | ) | -1,471.6 | % | |||||
Revenue
For the six months ended June 30, 2026, revenues were $9,630,395, representing a decrease of $7,862,238, or 44.9%, compared to revenues of $17,492,633 for the six months ended June 30, 2025. The decrease was primarily attributable to a significant reduction in orders from the Company’s largest customer, which experienced a deterioration in its financial condition during the second quarter of 2026 as further described in Note 7, and to the Company’s continued strategic transition away from the Forever 8 online retail and liquidation-model business.
For the three and six months ended June 30, 2026, the Company’s Forever 8 subsidiary derived approximately 99% of its revenue from a single customer, as disclosed in Note 3. As described in Note 7, this customer experienced a significant deterioration in its financial condition during the second quarter of 2026, and the Company can provide no assurance that ordering activity from this customer will continue at prior levels, or at all. The Company intends to sell its remaining inventory to new customers as opportunities arise and is exploring opportunities with respect to the Forever 8 business. There can be no assurance as to the outcome or timing of any such efforts, and revenues from the Forever 8 business in future periods may be materially reduced or eliminated.
Cost of Revenues
Cost of revenues was $9,314,888 for the six months ended June 30, 2026, compared to $15,434,078 for the six months ended June 30, 2025, a decrease of $6,119,190, or 39.6%, correlating to the reduction in revenue volumes.
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Gross Profit
Gross profit decreased to $315,507 for the six months ended June 30, 2026, compared to gross profit of $2,058,555 for the six months ended June 30, 2025, a decline of $1,743,048, or 84.7%. Gross margin declined to 3.3% from 11.8% in the prior-year period. The decrease was driven primarily by the reduction in revenues and unfavorable product mix during the transition away from the online retail and liquidation-model operations.
Operating Expenses
SG&A expenses were $17,426,952 for the six months ended June 30, 2026, compared to $4,681,257 for the six months ended June 30, 2025, an increase of $12,745,695, or 272.3%, driven by the factors described in the three-month discussion above.
The increase was attributable to:
| ● | Bad debt expense of $1,836,366 recognized during the three and six months ended June 30, 2026 in respect of receivables from the Company’s largest customer, whose financial condition deteriorated during the period. | |
| ● | Impairment charges of $5,211,824 were recognized in the second quarter of 2026 and are further described above. There were no impairment charges in the comparable 2025 period. | |
| ● | Higher professional fees and advisory costs incurred in connection with the Company’s capital raising and the ongoing implementation of its Digital Asset Treasury strategy; | |
| ● | Increased compensation and corporate overhead required to support expanded operations, including share-based compensation; and | |
| ● | Higher technology, compliance, and custodial-related costs associated with digital asset oversight. |
Interest Expense
Net interest expense totaled $(629,300) for the six months ended June 30, 2026, compared to $(2,565,530) for the six months ended June 30, 2025, a decrease of $1,936,230, or 75.5%, reflecting lower average borrowings under the Forever 8 Facilities.
Gain on Extinguishment of Liabilities
The Company recognized a gain on extinguishment of liabilities of $870,000 during the six months ended June 30, 2026, related to the fulfillment of settlement agreements for past rents and severances during the first quarter of 2026. There was no comparable activity in the six months ended June 30, 2025.
Change in Fair Value of Digital Assets
The Company recognized a net loss of $(37,177,137) related to fair value changes of its digital asset holdings during the six months ended June 30, 2026, reflecting a $(66,501,874) loss during the first quarter of 2026 partially offset by a $29,324,737 recovery during the second quarter of 2026. The Company did not hold digital assets during the six months ended June 30, 2025.
Change in Fair Value of Short-Term Investments
The Company recognized a gain of $23,666 related to fair value changes in its short-term investments during the six months ended June 30, 2026. There were no comparable amounts in the prior-year period.
Other Income
Other income increased to $801,261 for the six months ended June 30, 2026, from $103,867 in the prior-year period, an increase of $697,394.
Income (Loss) Before Income Taxes
Net loss before income taxes was $(58,434,779) for the six months ended June 30, 2026, compared to $(3,852,591) for the six months ended June 30, 2025. The increased loss is primarily attributable to the net $(37,177,137) unrealized loss on digital assets recognized during the six-month period, higher SG&A expenses supporting the Digital Asset Treasury strategy, and the $5,211,824 impairment charge, partially offset by the $870,000 gain on extinguishment of liabilities and lower net interest expense.
Income tax expense
Income tax expense was $0 for the six months ended June 30, 2026, compared to an income tax benefit of $(28,793) for the six months ended June 30, 2025. The Company continues to maintain a full valuation allowance on its net deferred tax assets.
Net income (loss)
Net loss from continuing operations was $(58,434,779) for the six months ended June 30, 2026, compared to $(3,823,798) for the six months ended June 30, 2025. Net income from discontinued operations was $0 for the six months ended June 30, 2026, compared to $105,553 for the six months ended June 30, 2025. Total net loss was $(58,434,779) for the six months ended June 30, 2026, compared to $(3,718,245) for the six months ended June 30, 2025.
Liquidity and Capital Resources
Overview
Eightco Holdings Inc. funds its operations through a combination of equity and debt financing, including proceeds from its At-The-Market (“ATM”) offering program, private placement transactions, and borrowings under its line of credit facility. These proceeds were deployed primarily into the Company’s Digital Asset Treasury and strategic investments.
As of June 30, 2026, the Company had cash and cash equivalents of $11,003,483, compared to $58,501,108 as of December 31, 2025. In addition to cash, the Company held short-term investments of $50,927,699 and digital assets at fair value of $228,011,086 as of June 30, 2026. Total assets were $407,492,768 at June 30, 2026, compared to $250,193,124 at December 31, 2025, and total liabilities were $13,418,142 at June 30, 2026, compared to $17,975,088 at December 31, 2025, resulting in total stockholders’ equity of $394,074,626 at June 30, 2026, compared to $232,218,036 at December 31, 2025.
Outstanding debt as of June 30, 2026 consisted of $8,075,000 under the Company’s lines of credit and $400,000 under lines of credit with related parties, for total outstanding lines of credit of $8,475,000. Outstanding debt as of December 31, 2025 consisted of $8,150,000 under the Company’s lines of credit and $2,590,000 under lines of credit with related parties, for total outstanding lines of credit of $10,740,000. The lines of credit bear interest at rates ranging from 12% to 18% and are currently unsecured.
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The sale of the Ferguson Containers corrugated packaging business was completed on April 7, 2025. The Company received $557,835 in cash proceeds at closing plus a $2.5 million seller note receivable, and the buyer assumed certain liabilities. The divestiture generated a gain of $1,231,774 and eliminated the operating overhead associated with that business segment.
Liquidity Profile
As of June 30, 2026, our liquidity resources consisted of $11.0 million of cash and cash equivalents, $50.9 million of short-term investments (consisting of U.S. government securities and money market funds), and approximately $86.9 million of U.S. dollar-denominated stablecoins, for total near-cash liquidity of approximately $148.8 million. We also held approximately $141.1 million of other digital assets (primarily Worldcoin (WLD) and Ethereum (ETH)), which are subject to market price volatility. We actively manage working capital by converting stablecoins and, when appropriate, other digital assets to U.S. dollars to meet operating needs.
During the six months ended June 30, 2026, we used $9.7 million of cash in operating activities, or approximately $1.6 million per month. Substantially all of our reported $(57.9) million net loss for the six-month period consisted of non-cash items, including a net $(37.2) million unrealized loss on digital assets, $5.5 million of non-cash share-based compensation, and the $5.2 million impairment charge. Based on our current operating cash use, we believe our near-cash liquidity is sufficient to fund our operating cash needs substantially in excess of the next 12 months, before consideration of additional capital that may be raised under our ATM equity offering program or monetization of our other digital asset and strategic investment holdings.
Sources of Liquidity
ATM Program
During the six months ended June 30, 2026, the Company raised net proceeds of $218.1 million under its ATM program. Proceeds were used to acquire digital assets, fund strategic private company investments, and support working capital needs.
Forever 8 Credit Facilities (Series A, B, C, and D)
Forever 8 continues to rely on its secured inventory financing facilities (the “Forever 8 Facilities”), which remain active. As of June 30, 2026, we had approximately $9.1 million outstanding and unused availability of approximately $2.0 million under the Forever 8 Facilities, subject to borrowing base and other conditions.
In the aggregate, these facilities provide:
| ● | Interest rates ranging from 15% to 18% per annum | |
| ● | Unused commitment fees of approximately 5% per annum | |
| ● | A revolving draw structure through “Initial Loan Advances” and “Subsequent Draws” from lender-controlled escrows | |
| ● | Collateral in the form of Forever 8 inventory, equipment, and related proceeds |
As of June 30, 2026, Forever 8 had approximately $9.1 million outstanding under these facilities to support ongoing inventory purchases.
Digital Assets as Liquidity
Certain digital assets, particularly U.S. dollar-denominated stablecoins, function as near-cash liquidity sources and may be converted to U.S. dollars as needed.
Uses of Liquidity
Digital Asset Purchases
We deploy a substantial portion of ATM proceeds to acquire digital assets. As of June 30, 2026, we held digital assets at fair value of approximately $228.0 million, consisting primarily of Worldcoin (WLD), Ethereum (ETH), and U.S. dollar-denominated stablecoins. These assets are measured at fair value under ASU 2023-08, with changes recognized in net income, and are custodied with institutional-grade providers, including Kraken, Coinbase, and FalconX.
Strategic Private Company Investments
We also deploy liquidity into strategic equity investments in frontier technology companies as part of our long-term capital allocation strategy. In March 2026, we invested $92.6 million in indirect beneficial interests in OpenAI preferred stock. We also invested approximately $18 million in Beast Industries, the business platform of content creator MrBeast. An additional $7 million capital commitment was callable through May 9, 2026, at which point the call period expired without being exercised. Additionally, in October 2025, we invested approximately $1 million in Series D Preferred Stock of Mythical, Inc., a developer of blockchain-based video game ecosystems. As of June 30, 2026, total strategic private company investments were $111.6 million.
Forever 8 Inventory Funding
Forever 8 uses liquidity to support inventory purchasing activities on behalf of e-commerce merchants. These requirements are funded through:
| ● | Operating cash flows | |
| ● | Digital asset conversions | |
| ● | Borrowings under the Forever 8 Facilities |
Operating and Corporate Needs
Liquidity is also used to support routine corporate expenses, personnel, professional fees, vendor obligations, and other working capital needs.
Digital Asset Volatility
During the six months ended June 30, 2026, we recognized a net loss of approximately $(37.2) million related to changes in the fair value of digital assets, consisting of a $(66.5) million loss during the first quarter of 2026 partially offset by a $29.3 million gain during the second quarter of 2026. Such fair value changes materially affect reported results and may impact future liquidity planning given digital asset price volatility. A sustained decline in the price of WLD or ETH would reduce the realizable value of our digital asset holdings and would limit the total liquidity available from our digital asset portfolio. We continue to monitor digital asset market conditions and may adjust our treasury strategy as appropriate.
Future Liquidity Considerations
Our liquidity in future periods will be influenced by:
| ● | The fair value of digital assets held under the DAT Strategy | |
| ● | Market conditions affecting potential capital raises | |
| ● | Working capital needs of Forever 8 | |
| ● | Digital asset market liquidity and volatility | |
| ● | Regulatory developments affecting digital asset custody, trading, and classification | |
| ● | Broader macroeconomic conditions impacting e-commerce demand |
Based on current assumptions and our existing near-cash liquidity of approximately $115.6 million, our other digital asset and strategic equity investment holdings, our continued access to capital through our at-the-market equity offering program, and our currently anticipated operating cash use of approximately $1.6 million per month, we believe our liquidity resources are sufficient to support both our operating business and Digital Asset Treasury Strategy for at least the next twelve months.
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Cash Flows
Since inception, Eightco and its subsidiaries have primarily used its available cash to fund its operations. The following table sets forth a summary of cash flows for the periods presented:
For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash (used in) provided by: | ||||||||
| Operating Activities | $ | (9,697,765 | ) | $ | 340,614 | |||
| Investing Activities | (250,506,400 | ) | 397,759 | |||||
| Financing Activities | 212,706,540 | (281,308 | ) | |||||
| Net increase (decrease) in cash and restricted cash | $ | (47,497,625 | ) | $ | 457,065 | |||
Cash Flows for the Six Months Ended June 30, 2026 and 2025
Operating Activities
Net cash used in operating activities was $(9,697,765) during the six months ended June 30, 2026, which consisted primarily of the net loss of $(58,434,779), offset by non-cash items including the change in fair value of digital assets of $37,177,137, share-based compensation of $5,498,007, the impairment charge of $5,211,824, reserve for bad debts of $1,836,366, depreciation and amortization of $5,061, and a gain on disposal of $(231,501). Changes in operating assets and liabilities used cash of $(759,880), primarily reflecting a decrease in accrued expenses and other current liabilities of $(1,211,595), an increase in accounts receivable of $(1,503,807), and a decrease in accounts payable of $(1,080,351), partially offset by decreases in inventory of $1,920,098 and prepaid expenses and other current assets of $1,115,775.
Net cash provided by operating activities was $340,614 during the six months ended June 30, 2025, which consisted primarily of the net loss of $(3,718,245), offset by non-cash items including depreciation and amortization of $1,187,373, amortization of debt issuance costs of $500,000, and share-based compensation of $143,201, partially offset by the gain on sale of assets of $(1,231,774). Changes in operating assets and liabilities provided cash of $3,426,059, primarily reflecting decreases in inventory of $2,094,868 and accounts receivable of $504,904 and an increase in accrued expenses and other current liabilities of $574,478.
Investing Activities
Net cash used in investing activities was $(250,506,400) during the six months ended June 30, 2026, compared to net cash provided by investing activities of $397,759 for the six months ended June 30, 2025. The change is largely attributable to purchases of short-term investments of $(363,627,127), purchases of other investments of $(111,599,951), and purchases of digital assets of $(89,286,578) in connection with the implementation and continued execution of the Company’s Digital Asset Treasury strategy, partially offset by proceeds from the sale of short-term investments of $312,930,999 and repayments of principal under loans held-for-investment of $76,258.
Financing Activities
Net cash provided by financing activities was $212,706,540 during the six months ended June 30, 2026, compared to net cash used in financing activities of $(281,308) for the six months ended June 30, 2025. The change was largely attributable to net proceeds from the issuance of common stock of $215,971,540 generated through the Company’s ATM program, partially offset by net repayments under lines of credit of $(2,265,000) and prepayment for share repurchase option of $(1,000,000).
During the six months ended June 30, 2026, the Company had an unfunded capital commitment of approximately $7 million to Beast Industries, which was committed for a period of 60 days following the Company’s initial investment. While not a variable interest or structured entity, this commitment represented a contractual obligation that, if called, would have had an impact on liquidity. The applicable period of the commitment expired on May 9, 2026 without being exercised.
Known Trends, Events, Uncertainties and Factors That May Affect Future Operations
Our results and liquidity may be materially affected by:
| ● | Digital asset market volatility, including price, volume, and spreads for WLD and other tokens; | |
| ● | Regulatory developments affecting custody, stablecoins, or exchange operations and their impact on access, withdrawals, or pricing; | |
| ● | Custodian concentration and counterparty risk, including operational incidents, solvency, or cybersecurity; | |
| ● | Capital markets conditions impacting our ability to raise additional equity via PIPE or ATM transactions; | |
| ● | Interest rate levels influencing borrowing costs under the Forever 8 Facilities and customer demand for inventory financing; and | |
| ● | Macro factors (consumer demand, e-commerce trends, geopolitics, inflation, and credit availability). |
Contractual Obligations and Commitments
The Company has no debt covenants that require certain financial information to be met. The following summarizes our material cash requirements as of June 30, 2026:
Unfunded Capital Commitment. As of June 30, 2026, we had an unfunded capital commitment of approximately $7 million to Beast Industries, which was able to be called within 60 days of our initial investment and expired on May 9, 2026.
Consulting Fees. Under the Amended and Restated DACA, we are obligated to pay a consulting fee equal to 1% per annum of assets under management. Based on current AUM levels, we expect cash consulting fees of approximately $2.5 million to $3.5 million over the next 12 months.
Credit Facility Interest and Fees. Based on current borrowing levels and interest rates ranging from 12% to 18%, we expect interest expense and commitment fees under our credit facilities of approximately $1.2 million to $1.5 million over the next 12 months.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of the Company’s financial condition and results of operations is based on the Company’s combined financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
For information on the Company’s significant accounting policies please refer to Note 2 to the Company’s Financial Statements included in this Quarterly Report.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company and are not required to provide certain Item 305 disclosures. There have been no material changes from our year-end market risk profile.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of such period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information that it is required to disclose in reports that the Company files with the SEC is recorded, processed, summarized and reported within the time periods specified by the Exchange Act rules and regulations due to the reasons set forth below.
As of December 31, 2025, management identified the following material weakness in our internal control over financial reporting: the Company was unable to provide a timely financial reporting package in connection with the year end audit. This was primarily the result of the Company’s limited accounting personnel. This also limits the extent to which the Company can segregate incompatible duties and has a lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected. There is a risk under the current circumstances that intentional or unintentional errors could occur and not be detected.
Management has concluded that the material weakness described above currently exists as of June 30, 2026. We continue to remediate the material weakness identified as of December 31, 2025, which persisted at June 30, 2026. During Q4 2025 and into 2026 we are: (i) augmenting accounting resources (including SEC reporting and technical accounting) to improve the timeliness and quality of period-end close; (ii) formalizing and documenting key controls over the financial close, including reconciliations, review controls, and segregation of duties; (iii) implementing enhanced IT-dependent manual controls to support completeness and accuracy of reports used in controls; and (iv) plan to engage external advisors during the third or fourth quarter of 2026 to assist with the design, implementation, and testing of internal controls.
Changes in Internal Control over Financial Reporting
Other than (i) the remediation actions described above, there were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended June 30, 2026.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is party to legal actions that are routine and incidental to its business. However, based upon available information and in consultation with legal counsel, management does not expect the ultimate disposition of any or a combination of these actions to have a material adverse effect on the Company’s assets, business, cash flow, condition (financial or otherwise), liquidity, prospects and/or results of operations.
As discussed in Note 7 — Accounts Receivable to the condensed consolidated financial statements included in this Quarterly Report, during the six months ended June 30, 2026, the Company’s largest customer experienced a significant deterioration in its financial condition, and the Company recognized a receivable and corresponding allowance in connection with the disposition of Company-funded inventory by the customer without authorization. The Company is engaged in ongoing discussions with the customer regarding the resolution of outstanding amounts and is evaluating alternatives to recover its economic exposure. As of the date of this Quarterly Report, no legal proceedings have been commenced by or against the Company with respect to this matter, and the Company can provide no assurance as to the ultimate outcome or timing of any recovery.
ITEM 1A. RISK FACTORS
Other than as set forth below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 or in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
On August 5, 2026, we received a notification letter regarding non-compliance with Nasdaq’s minimum bid price requirement for continued listing. If we do not regain compliance, our common stock may be delisted, which would adversely affect liquidity, market price, and our ability to raise capital.
Our common stock is listed on The Nasdaq Capital Market under the symbol “ORBS.” An active trading market may not be sustained, and the failure of such a market to continue would likely have a material adverse effect on the value of our common stock. The trading price of our securities could be volatile and subject to wide fluctuations in response to various factors beyond our control, including general business and economic conditions, the release of financial reports, and analyst coverage. A decline in market price could adversely affect our ability to issue additional securities and obtain additional financing.
On August 5, 2026, we received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for the 30 consecutive business days from June 23, 2026 to August 4, 2026, the closing bid price of our common stock was below the minimum $1.00 per share required for continued listing pursuant to Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days, or until February 1, 2027, to regain compliance. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days during the compliance period.
If we do not regain compliance by February 1, 2027, we may be eligible for an additional 180-calendar-day compliance period, provided we meet all other initial listing standards for The Nasdaq Capital Market (other than the bid price requirement) and provide written notice of our intention to cure the deficiency. If we are not eligible or Nasdaq determines that we will not be able to cure the deficiency, Nasdaq will provide notice that our common stock is subject to delisting, at which time we may appeal to a Nasdaq Hearings Panel. There can be no assurance that we will regain compliance within the compliance period or any extension thereof, or that we will otherwise maintain compliance with other applicable Nasdaq listing requirements. If our common stock were delisted from Nasdaq, we could face significant adverse consequences, including: limited availability of market quotations; reduced liquidity; a determination that our common stock is a “penny stock,” which would require brokers to adhere to more stringent rules and could reduce trading activity; limited analyst coverage; and a decreased ability to issue additional securities or obtain financing. In such event, we would expect our common stock to be quoted on the OTC Markets or a similar system, on which liquidity would likely be significantly diminished.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the three months ended June 30, 2026.
Share Repurchase Program
On December 28, 2025, the Company’s Board of Directors authorized a share repurchase program pursuant to which the Company may repurchase up to $125 million of its outstanding common stock (the “Share Repurchase Program”). Repurchases under the Share Repurchase Program may be made from time to time through open-market purchases, privately negotiated transactions, or other transactions in accordance with applicable securities laws. The Share Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be suspended, modified, or terminated at any time. No repurchases were made under the Share Repurchase Program during the three months ended June 30, 2026.
ITEM 5. OTHER INFORMATION
During
the three months ended June 30, 2026, no director or officer
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ITEM 6. EXHIBITS
(b) Exhibits
The following documents are filed as exhibits hereto:
| * | Filed herewith. |
| ** | Furnished herewith. |
| † | Certain confidential portions of this exhibit were omitted by means of marking such portions with brackets and asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed, or constituted personally identifiable information that is not material. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 7, 2026
| EIGHTCO HOLDINGS INC. | ||
| By: | /s/ Kevin O’Donnell | |
| Name: | Kevin O’Donnell | |
| Title: | Chief Executive Officer | |
| EIGHTCO HOLDINGS INC. | ||
| By: | /s/ Brett Vroman | |
| Name: | Brett Vroman | |
| Title: | Chief Financial Officer | |
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