Eightco (US:OCTO)2025-04-15 20:15Financing Activities - The Company completed a Private Placement on February 26, 2024, raising approximately $0.71 million by selling 865,856 shares at $0.82 per share [145]. - As of the date of filing, $2,375,000 has been committed by lenders under the Series A financing agreement, with an interest rate of 15.00% per annum [150]. - The Series B financing agreement, entered into on October 6, 2023, has $175,000 committed by the lender, also at an interest rate of 15.00% per annum [155]. - The Series C financing agreement, dated October 19, 2023, has $7,225,000 committed by the lender at an interest rate of 18.00% per annum [159]. - The Series D financing agreement, established on March 15, 2024, allows for up to $5,000,000 in funding [160]. - The Company entered into a Debt Exchange Agreement on May 30, 2023, exchanging old secured promissory notes for new notes totaling $1,650,000 [162]. - A Senior Secured Convertible Note was issued on March 15, 2023, with an initial principal amount of $5,555,000, which was fully repaid by January 15, 2024 [163]. - The Company redeemed all Hudson Warrants for $660,000 on October 23, 2023, following the repayment of the Hudson Note [164]. Strategic Changes - The Company has shifted its focus away from generating revenue from its Web 3 Business to concentrate on its core operations in inventory cash flow solutions and corrugated packaging [141]. - The Company underwent a name change from Cryptyde, Inc. to Eightco Holdings Inc. on April 3, 2023, reflecting its strategic realignment [141]. - Eightco acquired 100% of Forever 8's membership interests for a total consideration including $4.6 million in cash and various preferred units [166][167]. - The acquisition agreement includes potential earnout payments totaling up to $37 million based on performance thresholds related to cumulative collected revenues [169][170]. - If the VWAP of Eightco shares falls below specified thresholds, additional preferred units may be issued, with a maximum of 3.75 million additional units for the base consideration [168][170]. - The Promissory Notes issued during the acquisition bear interest rates of 10% for the first year and 12% thereafter, with a total obligation to be satisfied by October 30, 2024 [176]. - Approximately $5.7 million in accrued interest was forgiven or converted into equity, resulting in a non-cash gain of $3.86 million recorded directly to additional paid-in capital (APIC) [179][181]. - The Company declared a dividend of one one-thousandth of a share of Series A Preferred Stock for each outstanding common share, effective January 27, 2023 [180]. - The Company has extended the payment deferral period under the Promissory Notes through October 30, 2025 [181]. - The total number of Series A Preferred Stock designated is 300,000, all of which have been redeemed [182]. - The Company recorded a gain of $6.1 million related to the full release of contingent consideration, recognized at the time of acquisition [181]. Financial Performance - For the year ended December 31, 2024, revenues decreased by $27,947,081 or 41.36% compared to 2023, primarily due to less capital utilized for inventory purchases [201]. - Cost of revenues for the year ended December 31, 2024, decreased by $27,669,287 or 45.13% compared to 2023, largely attributable to the decrease in revenues [202]. - Gross profit for the year ended December 31, 2024, decreased by $277,794 or 4.44% compared to 2023, mainly due to the decline in revenues [203]. - Selling, general and administrative expenses decreased by $2,045,908 or 13.82% for the year ended December 31, 2024, compared to 2023 [204]. - Restructuring and severance expenses decreased by $719,144 or 33.70% for the year ended December 31, 2024, compared to 2023, due to the completion of the restructuring plan [205]. - Interest expense decreased to $5,287,920 for the year ended December 31, 2024, from $11,553,477 in 2023, largely due to the full amortization of debt issuance costs [206]. - Total other income was $8,347,033 for the year ended December 31, 2024, compared to a loss of $58,377,298 in 2023, attributed to no further charges for the loss on issuance of warrants [207]. - Net income from continuing operations was $289,811 for the year ended December 31, 2024, compared to a net loss of $69,057,115 in 2023, reflecting significant improvement [209]. - Revenues from the Corrugated Packaging business decreased by $905,854 or 11.72% for the year ended December 31, 2024, compared to 2023, due to reduced orders from a key customer [213]. - Net income from discontinued operations was $418,716 for the year ended December 31, 2024, down from $736,701 in 2023, primarily due to decreased orders [221]. Cash Flow and Debt - As of March 31, 2025, Eightco Holdings Inc. has approximately $9.7 million in outstanding debt obligations related to lines of credit [222]. - The company had approximately $0.2 million in cash as of April 14, 2025, and expects additional capital will be required to support ongoing operations [223]. - In November 2024, Eightco Holdings Inc. agreed to sell its Corrugated Packaging Business for approximately $3.1 million, which includes $557,835 in cash and a $2.5 million seller note [224]. - The net cash used in operating activities for the year ended December 31, 2024, was ($6,637,101), compared to ($6,399,079) for 2023 [226]. - The company reported a net increase in cash and restricted cash of ($5,008,649) for the year ended December 31, 2024 [226]. - Net cash provided by financing activities was $1,698,550 for the year ended December 31, 2024, compared to $2,989,800 for 2023 [229]. - As of December 31, 2024, the accumulated deficit was $112,570,049, raising substantial doubt about the company's ability to continue as a going concern [231]. - The company expects its current cash and cash equivalents will not be sufficient to support projected operating requirements for at least the next 12 months [232]. - The company began reducing headcount in 2023 to lower corporate overhead and intends to continue cost reductions while raising additional capital as needed [233].