UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2023

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

For the transition period from ________ to ________

Commission file number: 001-41033

EIGHTCO HOLDINGS INC.

(f/k/a Cryptyde, Inc.)

(Exact Name of Registrant as Specified in its Charter)

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

200 9^th Avenue North, Suite 220
Safety Harbor, Florida		34695
(Address of Principal Executive Offices)		(Zip Code)

(888) 765-8933

(Registrant’s Telephone Number, Including Area Code)

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

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

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

☒Yes ☐ No

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

☒Yes ☐ No

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

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

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

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

☐ Yes ☒ No

As of May 15, 2023, there were 2,371,949 shares of the registrant’s common stock outstanding.

EIGHTCO HOLDINGS INC.

TABLE OF CONTENTS

		Page Number

PART I		5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2023 and 2022 (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II		30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

	Signatures	33

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended March 31, 2023 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, our ability to raise capital, our operational and strategic initiatives or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

	●	Our ability to effectively execute our business plans including transitioning from being focused on end-to-end consumer product innovation, development, and commercialization to being focused on digital media, advertising and content technologies innovation, development, and commercialization;
	●	Our ability to manage our expansion, growth and operating expenses;
	●	Our ability to protect our brands, reputation and intellectual property rights;
	●	Our ability to obtain adequate financing to support our development plans;
	●	Our ability to repay our debts;
	●	Our ability to rely on third-party suppliers, content contributors, developers, and other business partners;
	●	Our ability to evaluate and measure our business, prospects and performance metrics;
	●	Our ability to compete and succeed in a highly competitive and evolving industry;
	●	Our ability to respond and adapt to changes in technology and consumer behavior;
	●	Our dependence on information technology, and being subject to potential cyberattacks, security problems, network disruptions, and other incidents;
	●	Our ability to comply with complex and evolving laws and regulations including those relating to privacy, data use and data protection, content, competition, safety and consumer protection, e-commerce, digital assets and other matters, many of which are subject to change and uncertain interpretation;
	●	Our ability to enhance disclosure and financial reporting controls and procedures and remedy the existing weakness;
	●	Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;
	●	Taxes;
	●	The stability of the governments and political and business conditions in certain foreign countries in which we or certain of our business partners may operate now or in the future;
	●	Costs and results of potential litigation;
	●	Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;
	●	The use of social or digital media to disseminate false, misleading and/or unreliable or inaccurate information regarding our products, services or the industry in which we operate;
	●	The potential that we do not realize some or all of the benefits expected to result from the spin-off, or the delay of such benefits;
	●	Our ongoing businesses may be adversely affected and subject to certain risks and consequences as a result of the spin-off transaction;
	●	If the distribution of shares of Eightco, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, the Company’s stockholders and the Company could be subject to significant tax liability;
	●	If the spin-off transaction does not comply with state and federal fraudulent conveyance laws and legal dividend requirements;
	●	Our ability to realize the benefits of our acquisition of Forever 8 Fund, LLC; and
	●	Other risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2023.

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

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

Solely for convenience, we refer to trademarks in this Quarterly Report without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.

OTHER PERTINENT INFORMATION

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

PART I - FINANCIAL INFORMATION

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
	2023			2022

ASSETS
Current assets:
Cash and cash equivalents	$	3,094,260		$	5,580,431
Restricted cash		2,850,000			1,000,000
Accounts receivable, net		2,137,267			1,263,552
Inventories		7,877,339			4,502,003
Prepaid expenses and other current assets		987,059			1,736,145
Total current assets		16,945,925			14,082,131
Property and equipment, net		1,120,955			1,321,042
Right of use assets – operating leases		57,769			68,600
Intangible assets, net		18,080,897			18,579,986
Goodwill		22,324,588			22,324,588
Loan held-for-investment		2,224,252			2,224,252
Total assets	$	60,754,386		$	58,600,599

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,014,659		$	2,174,034
Accrued expenses and other current liabilities		4,929,680			2,624,518
Current portion of operating lease liabilities		44,446			43,950
Line of credit		1,850,000			1,850,000
Convertible note payable, net of debt discount of $5,277,250		277,750			--
Due to Former Parent		7,226,700			7,226,700
Total current liabilities		16,343,235			13,919,202

Convertible notes payable, net of debt discount of $316,120 and $1,831,828, respectively		1,683,880			7,911,505
Convertible notes payable – related parties, net of debt discount of $2,616,300 and $2,750,000, respectively		24,883,700			24,750,000
Convertible notes payable		24,883,700			24,750,000
Operating lease liabilities, net of current portion		15,265			26,564
Contingent consideration		6,100,000			6,100,000
Deferred tax liabilities		82,104			82,104
Total liabilities	$	49,108,184		$	52,789,375

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 1,311 and 0 shares outstanding at March 31, 2023 and December 31, 2022, respectively		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized and 1,797,570 and 633,602 shares outstanding at March 31, 2023 and December 31, 2022, respectively	$	1,797		$	633
Additional paid-in capital		106,251,220			50,617,631
Retained earnings (accumulated deficit)		(94,809,339	)		(44,958,199	)
Foreign currency translation		519,033			467,668
Total stockholders’ equity attributable to Eightco Holdings Inc.		11,962,711			6,127,733
Non-controlling interest		(316,509	)		(316,509	)
Total stockholders’ equity		11,646,202			5,811,224
Total liabilities and stockholders’ equity	$	60,754,386		$	58,600,599

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	2023			2022
	For the Three Months Ended March 31,
	2023			2022

Revenues, net	$	15,889,715		$	3,719,647
Cost of revenues		14,070,623			3,174,383
Gross profit		1,819,092			545,264

Operating expenses:
Selling, general and administrative expenses		5,349,431			1,921,795
Operating loss		(3,530,339	)		(1,376,531	)

Non-operating income (expense):
Interest expense, net		(2,813,227	)		(129	)
Loss on issuance of warrants		(43,541,211	)		-
Other income		33,637			49,519
Total non-operating income (expense)		(46,320,801	)		49,390

Net income (loss) before income tax expense		(49,851,140	)		(1,327,141	)

Income tax expense (benefit)		-			(189,997	)

Net income (loss)	$	(49,851,140	)	$	(1,137,144	)
Net income (loss) attributable to non-controlling interest		-			(126,754	)
Net income (loss) attributable to Eightco Holdings Inc.		(49,851,140	)		(1,010,390	)
Net income (loss) per share:
Net income (loss) per share basic	$	(40.15	)	$	(101.04	)
Net income (loss) per share diluted	$	(40.15	)	$	(101.04	)
Weighted average number of common shares outstanding – basic		1,241,624			10,000
Weighted average number of common shares outstanding – diluted		1,241,624			10,000

See the accompanying notes to the condensed consolidated financial statements.

EIGHTCO HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended March 31, 2023 and 2022:

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

Balance, January 1, 2022		10,000	$	10	$	(10	)	$	(128,860	)	$	2,300,212			-	$	2,171,352
Net loss for the three months ended March 31, 2022		-		-		-			(126,754	)		(1,010,390	)		-		(1,137,144	)
Balance, March 31, 2022		10,000		10		(10	)		(255,614	)		1,289,822			-		1,034,208
									-
Balance, January 1, 2023		633,365		633		50,617,631			(316,509	)		(44,958,199	)		467,668		5,811,224
Balance,		633,365		633		50,617,631			(316,509	)		(44,958,199	)		467,668		5,811,224
Issuance of common stock to note holders		774,333		774		7,742,559			-			-			-		7,743,333
Exercise of warrants		366,622		367		14,233			-			-			-		14,600
Share-based compensation		23,250		23		(23	)		-			-			-		-
Issuance of warrants		-		-		47,876,820			-			-			-		47,876,820
Foreign currency translation		-		-

SEC Form 10-Q filed by Cryptyde Inc.