TYDE Crptyde Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 16, 2024

 

EIGHTCO HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41033		87-2755739
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		Identification No.)

 

101 Larry Holmes Drive Suite 313 Easton, PA 18042		34695
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (888) 765-8933

 

(Former name or former address, if changed since last report)

Not Applicable

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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. ☐

 

 

 

Item 7.01. Regulation FD Disclosure.

 

On July 16, 2024, Eightco Holdings Inc. (the “Company”) issued a press release providing a shareholder update regarding recent activities and future initiatives for growth. The press release is included as Exhibit 99.1 hereto.

 

The information furnished under this Item 7.01, including the exhibit related thereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release dated July 16, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: July 16, 2024
	Eightco Holdings Inc.
	By:	/s/ Paul Vassilakos
	Name:	Paul Vassilakos
	Title:	Chief Executive Officer

 

 

Exhibit 99.1

 

 

Eightco Provides Shareholder Update

 

Significant Improvement in Financial Condition Allows Renewed Focus on Revenue Growth

 

Easton, PA, July 16, 2024 (GLOBE NEWSWIRE) – Eightco Holdings Inc. (NASDAQ: OCTO) (the “Company” or “Eightco”) is pleased to provide an update to its shareholders regarding recent activities and future initiatives for growth.

 

The Company has made significant progress in the first half of 2024 improving its financial condition, most notably through the elimination of $5.4 million in convertible notes and increasing shareholder equity by over $23 million which allows a renewed focus on the growth of its subsidiary, Forever 8 Fund LLC (“Forever 8”.)

 

Core Business

 

During 2024, the Company eliminated significant costs and roles related to the management of various legacy businesses. The Company’s primary focus now is the growth of Forever 8, which operates in two main areas: providing inventory solutions for small to mid-sized e-commerce sellers and supplying refurbished Apple products for sellers in the United Kingdom and European Union.

 

Forever 8 supports e-commerce sellers by purchasing inventory on their behalf, enabling them to use their capital to grow their brands without the financial strain of maintaining stock. Leveraging Forever 8’s proprietary data-driven tool, it can quickly and confidently assess inventory risk levels, allowing for efficient capital deployment. Forever 8’s predictive inventory solution seeks to ensure optimal inventory levels and capital management, integrating planning, purchasing, and payout into one easy-to-use system. This model helps e-commerce sellers avoid negative cash flow positions that typically arise from the need to continuously supply inventory while awaiting payments.

 

In the refurbished Apple products market, Forever 8 provides inventory for iPhones and has expanded into other Apple products, including iPads, AirPods, Apple Watches and the iPad Pencil due to high customer demand. Forever 8 buys existing inventory from vendors and commits to purchasing future inventory directly from their suppliers, maintaining specific inventory levels to enhance sales and growth. Vendors are invoiced after sales occur on a monthly basis, at which point Forever 8 charges them its cost plus a markup. Forever 8’s tech platform facilitates this entire process end-to-end, making it seamless and scalable.

 

Balance Sheet Improvements

 

During the first half of 2024, Eightco took significant strides to resolve legacy issues and strengthen its balance sheet. More specifically, the Company has improved shareholder equity by over $23 million through the following:

 

	●	Cancellation of $7.4 million of liabilities
	●	Cancellation of $15.6 million of additional liabilities to the former members of Forever 8:
	●	Earnout consideration (fair value of $6.1 million)
	●	$5.4 million in promissory notes
	●	$3.0 million in interest obligations
	●	$1.1 million of interest obligations converted into 1.4 million shares of the Company’s common stock

 

 

The Company also repaid convertible notes which resulted in the elimination of an aggregate of 5,846,627 dilutive shares related to warrants and convertible securities that were cancelled in connection therewith, as well as several one-time accounting events.

 

Financial highlights and statistics:

 

	●	Significant improvement in first quarter 2024 net income of $4.9 million compared to a net loss of $49.9 million for the prior year quarter, due to improved operating performance and elimination of warrant losses related to a retired convertible note.
	●	First quarter 2024 revenues of $9.6 million compared to $15.9 million for the prior year quarter, driven by reduction in capital available for cell phone sales after repayment of the convertible note.
	●	First quarter 2024 SG&A of $3.5 million, down 35.3% from $5.3 million in the prior year quarter.
	●	First quarter 2024 gross profit margin of 19.6%, compared to 11.4% in the prior year quarter.
	●	First quarter 2024 EBITDA of $3.7 million compared to a loss of $46.4 million in the prior year quarter

 

In late February 2024 the Company completed a private placement priced at $0.82 per share. The Company currently has approximately 8.8 million shares outstanding, resulting in a market capitalization of approximately $4.6 million based on the closing price of the Company’s common stock on July 15, 2024. Management believes the current market capitalization may not fully reflect the Company’s substantial progress in enhancing shareholder equity and operational efficiencies described above.

 

Nasdaq listing

 

The Company previously announced that a Hearings Panel of the Nasdaq Stock Market has granted the Company’s request for continued listing on The Nasdaq Capital Market, subject to the Company meeting certain conditions by August 23, 2024. These conditions include requiring the closing bid price of the Company’s common stock to equal or exceed $1.00 per share for a minimum of ten (10) consecutive trading sessions. In order to meet the conditions required by the Hearings Panel, the Company will be mailing a proxy statement seeking shareholder approval to effect a reverse stock split of all of the outstanding shares of the Company’s common stock at a ratio of 1-for-5.

 

Paul Vassilakos, CEO of Eightco and President of Forever 8, said “The Company is excited to focus on prioritizing the Forever 8 business providing inventory capital for e-commerce sellers and refurbished apple product sellers. We have significantly improved our balance sheet and reduced operating expenses and we believe the high demand for our service underscores the value we bring to our customers. ”

 

 

A reconciliation of EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G is set forth below.

 

		For the Three Months Ended
		March 31,
		2024				2023
Revenues, net		$	9,619,820			$	15,889,715
Cost of revenues			7,734,058				14,070,623
Gross profit			1,885,762				1,819,092
Operating expenses:
Selling, general and administrative expenses		$	3,461,959			$	5,349,431
Restructuring and severance			1,414,838				-
Total operating expenses			4,876,797				5,349,431
Operating loss			(2,991,035	)			(3,530,339	)
Net income (loss)			4,947,871				(49,851,140	)

 

		For the Three Months Ended
		March 31,
		2024				2023
Net income (loss)			4,947,871				(49,851,140	)
Interest (income) expense, net			1,198,771				2,813,227
Gain on forgiveness of interest			(3,006,896	)			-
Income tax expense			-				-
Depreciation and amortization			605,796				626,077
EBITDA			3,745,542				(46,411,836	)
Stock-based compensation			144,938				-
Loss on issuance of warrants							43,541,211
Gain on forgiveness of earnout			(6,100,000	)			-
Restructuring and severance costs			1,414,838				-
Adjusted EBITDA			(794,682	)			(2,870,625	)

 

About Eightco

 

Eightco (NASDAQ: OCTO) is committed to growth of its subsidiaries, made up of Forever 8 Fund LLC, an inventory capital and management platform for e-commerce sellers, and Ferguson Containers, Inc., a provider of complete manufacturing and logistical solutions for product and packaging needs, through strategic management and investment. In addition, the Company is actively seeking new opportunities to add to its portfolio of technology solutions focused on the e-commerce ecosystem through strategic acquisitions. Through a combination of innovative strategies and focused execution, Eightco aims to create significant value and growth for its portfolio companies and stockholders.

 

For additional information, please visit www.8co.holdings

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact could be deemed forward looking. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “expand,” “advance,” “develop” “believes,” “guidance,” “target,” “may,” “remain,” “project,” “outlook,” “intend,” “estimate,” “could,” “should,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: Eightco’s ability to regain and maintain compliance with the Nasdaq’s continued listing requirements; unexpected costs, charges or expenses that reduce Eightco’s capital resources; Eightco’s inability to raise adequate capital to fund its business; the inability to innovate and attract users for Eightco’s and its subsidiaries’ products; future legislation and rulemaking negatively impacting digital assets; and shifting public and governmental positions on digital asset mining activity. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Eightco’s actual results to differ from those contained in forward-looking statements, see Eightco’s filings with the Securities and Exchange Commission (the “SEC”), including in its Annual Report on Form 10-K filed with the SEC on April 1, 2024, as amended. All information in this press release is as of the date of the release, and Eightco undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

 

For further information, please contact:
Investor Relations
investors@8co.holdings

 

v3.24.2

Cover	Jul. 16, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 16, 2024
Entity File Number	001-41033
Entity Registrant Name	EIGHTCO HOLDINGS INC.
Entity Central Index Key	0001892492
Entity Tax Identification Number	87-2755739
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	101 Larry Holmes Drive
Entity Address, Address Line Two	Suite 313
Entity Address, City or Town	Easton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	34695
City Area Code	(888)
Local Phone Number	765-8933
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OCTO
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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