Eightco Holdings Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
ORBS$0.75+3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-19.
0001493152-25-012159
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001493152-25-023549
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 150 current paragraphs.
43 unchanged; 12 reworded; 95 added; 58 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (95)
Current report
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.
Current report
During the quarter ended September 30, 2025, we adopted a new Digital Asset Treasury (“DAT”) Strategy, significantly increased our holdings of digital assets, and completed substantial capital-raising activities to support these initiatives. These actions represent material changes to our capital allocation strategy, financial condition, risk profile, and long-term operating model, and therefore require expanded disclosure in this Management’s Discussion and Analysis.
Current report
We continue to operate Forever 8, our inventory funding business that provides inventory purchasing and financing solutions to e-commerce retailers. At the same time, we completed the wind-down of our prior Web3 operations and Bitcoin mining hardware sales, and on April 7, 2025, we sold the assets associated with our Packaging Business. Forever 8 now represents our sole operating business.
Current report
Adoption of Digital Asset Treasury (“DAT”) Strategy
Current report
Strategy Overview
Current report
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 and WCWLD), 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.
Current report
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.
Current report
Rationale for Strategy
Current report
Key factors underlying the DAT Strategy include:
Current report
Capital Raising Activities
Current report
During the quarter ended September 30, 2025, we completed substantial financing transactions to support the DAT Strategy:
Current report
A significant portion of the PIPE and ATM proceeds was deployed to acquire digital assets. These capital raises materially strengthened our liquidity and expanded our balance sheet.
Current report
Digital Asset Acquisitions
Current report
During the quarter, we acquired digital assets with an aggregate fair value of approximately $287 million as of September 30, 2025. Our holdings consist primarily of:
Current report
Digital assets are custodied with institutional-grade providers, including Kraken, Coinbase, and FalconX.
Current report
Custody, Concentrations and Transfer Restrictions
Current report
As of September 30, 2025, 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.
Current report
Accounting for Digital Assets
Current report
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.
Current report
Key effects include:
Current report
This measurement model increases transparency but introduces meaningful volatility tied to the valuation of Worldcoin and other digital assets.
Current report
Volatility and Earnings Sensitivity
Current report
Because we measure eligible crypto assets at fair value under ASU 2023-08, period-to-period changes in the market price of Worldcoin (WLD/WCWLD) 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.
Current report
There were no material changes to our critical accounting policies during the three and nine months ended September 30, 2025, 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, 2024.
Current report
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.
Current report
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.
Current report
Change in Fair Value of Digital Assets
Current report
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.
Current report
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. No such gains were recorded during the periods presented.
Current report
For the three months ended September 30, 2025, revenues were $5,300,527, representing a decrease of $755,519, or 12.48%, compared to revenues of $6,056,046 for the three months ended September 30, 2024. The decrease reflects reduced order volumes from certain customers as the Company exited its liquidation-model operations and is in the process of winding down relationships where we previously were operating customer storefronts to mitigate losses.
Current report
Cost of revenues was $5,496,377 for the three months ended September 30, 2025 compared to $4,451,185 for the three months ended September 30, 2024, a decrease of $1,045,192, or 23.49%. The decrease correlates to the reduction in volumes described above. Cost of revenues for the 2025 period also reflects the impact of product mix shifts and includes certain close-out reserved inventory costs associated with the exit from the liquidation model.
Current report
Gross profit decreased to a loss of $195,850 for the three months ended September 30, 2025 compared to a gross profit of $1,604,861 for the three months ended September 30, 2024, a decline of $1,800,711.
Current report
The decrease was primarily driven by:
Current report
These actions were undertaken to eliminate structurally unprofitable arrangements and are expected to reduce ongoing losses in future periods.
Current report
Selling, general and administrative (“SG&A”) expenses were $6,002,208 for the three months ended September 30, 2025, compared to $3,364,793 for the three months ended September 30, 2024, an increase of $2,637,415, or 78.40%.
Current report
The increase was attributable to:
Current report
The Company did not incur restructuring or severance expenses in either period.
Current report
Net interest expense totaled $(1,095,132) for the three months ended September 30, 2025, compared to $(1,525,274) for the three months ended September 30, 2024, reflecting lower average borrowings on the Company’s financing facilities.
Current report
Change in Fair Value of Digital Assets
Current report
The Company recognized a loss of $(18,639,017) related to fair value changes of its digital asset holdings during the three months ended September 30, 2025. The Company did not hold digital assets during the comparable 2024 period.
Showing the first 40 of 95 passages. Open the source sections for the rest.
Removed paragraphs (58)
Previous report
As used herein, “Eightco” and the “Company” refer to Eightco Holdings Inc. and subsidiaries and/or where applicable, its management, a Delaware corporation originally incorporated on September 21, 2021 (date of inception) under the laws of the State of Nevada. On March 9, 2022, the Company converted to a Delaware corporation pursuant to a plan of conversion entered into with the Former Parent. On April 4, 2023, the Company changed its name to Eightco Holdings Inc. from Cryptyde, Inc. and its stock symbol to “OCTO.” The Company is comprised of three main businesses, Forever 8 Inventory Cash Flow Solution, our Web3 Business, which includes the sale of BTC mining hardware, and our Packaging Business. Our Inventory Solution Business, Forever 8 Fund, LLC, a Delaware limited liability company focused on purchasing inventory for e-commerce retailers, which we acquired on October 1, 2022 (“Forever 8”). We no longer intend to generate revenue from our Web 3 Business. Additionally, on April 7, 2025, we sold the assets that comprised the Packaging Business and we no longer intend to generate revenue from such business
Previous report
On June 29, 2022, the Company separated from its former parent company, Vinco Ventures Inc. (“Vinco”). As previously announced, we concluded a spin-off from Vinco (the “Separation”) and continue operating our Web3 Business, our BTC Mining Hardware Business and our Packaging Business. The Separation occurred concurrently with the distribution (the “Distribution”) of our common stock to stockholders of Vinco as of May 18, 2022 (the “Record Date”) at a ratio of one share of our common stock for every ten shares of Vinco common stock held by the Vinco stockholders. Following the Separation, we are an independent, publicly traded company, and Vinco retains no ownership interest in our Company.
Previous report
In connection with the Separation, we entered into a Separation and Distribution Agreement and other agreements with Vinco to effect the Separation and provide a framework for our relationship with Vinco after the Separation. These agreements provide for the allocation between us and our subsidiaries, on the one hand, and Vinco and its subsidiaries, on the other hand, of the assets, liabilities, legal entities, and obligations associated with the Eightco Businesses, on the one hand, and Vinco’s other current businesses, on the other hand, and govern the relationship between our Company and our subsidiaries, on the one hand, and Vinco and its subsidiaries, on the other hand, following the Separation. In addition to the Separation and Distribution Agreement, the other principal agreements entered into with Vinco include a Tax Matters Agreement and certain commercial agreements.
Previous report
Recent Financings
Previous report
February 2024 Private Placement
Previous report
On February 26, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Investors”), pursuant to which the Company sold to the Investors an aggregate of 865,856 shares (the “Shares”) of the Company’s common stock at a purchase price of $0.82 per Share (the “Private Placement”). The Company received aggregate gross proceeds from the Private Placement of approximately $0.71 million. The Shares are being offered and sold in reliance on the exemption from registration under the Securities Act of 1933, as amended, provided by Section 4(a)(2) and Regulation D promulgated thereunder for transactions not involving a public offering.
Previous report
The Purchase Agreement contains representations and warranties of the Company and the Investors that are typical for transactions of this type. The Purchase Agreement also contains covenants on the part of the Company that are typical for transactions of this type.
Previous report
Series A Financing
Previous report
On May 30, 2023, Forever 8 (the “Borrower”) entered into a Loan and Security Agreement (the “Agreement”) with several individuals, financial institutions and entities as lenders. Under the terms of the Agreement, each lender will severally (and not jointly) make available to Borrower, in an amount not to exceed its respective Commitment, a Loan Advance amount to be determined by the lender (as such amount may be increased, the “Aggregate Commitment”) in the aggregate, of which (x) a certain amount will be deposited into an account of the Borrower in accordance with its written instructions (the “Initial Loan Advance”) and (y) the remaining balance of the Aggregate Commitment after deducting the Initial Loan Advance shall be deposited into the Escrow Account (the “Escrow Funds”). The Borrower may, at any time, request an advance for all or a portion of the Escrow Funds (each such advance, a “Subsequent Draw”).
Previous report
The Borrower issued a Promissory Note to each of the lenders in the amount of the lender’s respective Initial Loan Advance. The principal balance of the Initial Loan Advance and each Subsequent Draw shall bear interest thereon from the Closing Date and applicable Advance Date, respectively, at 15.00% per annum. The Borrower shall pay each lender, according to its Applicable Percentage, an unused commitment fee on the actual daily amount of the Unused Commitment Amount during the immediately preceding calendar quarter at the rate of five percent (5.00%)per annum(the “Unused Commitment Fee”). In the event any payment is not paid on or within five (5) Business Days of the scheduled payment date, an amount equal to two percent (2.00%) of the past due amount shall be payable on demand, in addition to interest accruing. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, the Initial Loan Advance and all Subsequent Draws, including principal, interest, compounded interest, and professional fees thereupon, shall upon the election of the lenders, bear interest at the Interest Rate, plus five (5) percentage points. In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded.
Previous report
As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower granted to the lenders a security interest in all of Borrower’s right, title, and interest in and to all Inventory or Equipment and machinery, in each case, purchased (or refinanced) with the proceeds of the Initial Loan Advance and any Subsequent Draw, and, to the extent not otherwise included, all Proceeds of each of the foregoing and all products, additions, increases and accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.
Previous report
As of the date of this filing, $2,375,000 has been committed by the lenders.
Previous report
Series B Financing
Previous report
On October 6, 2023, the Borrower entered into a Series B Loan and Security Agreement (the “Series B Agreement”) with an individual as lender. Under the terms of the Series B Agreement, the lender will make available to Borrower, in an amount not to exceed its respective Commitment, a Loan Advance amount to be determined by the lender (as such amount may be increased, the “Aggregate Commitment”) in the aggregate, of which (x) a certain amount will be deposited into an account of the Borrower in accordance with its written instructions (the “Initial Loan Advance”) and (y) the remaining balance of the Aggregate Commitment after deducting the Initial Loan Advance shall be deposited into the Escrow Account (the “Escrow Funds”). The Borrower may, at any time, request a Subsequent Draw for all or a portion of the Escrow Funds.
Previous report
The Borrower issued a Promissory Note to the lender in the amount of the lender’s Initial Loan Advance. The principal balance of the Initial Loan Advance and each Subsequent Draw shall bear interest thereon from the Closing Date and applicable Advance Date, respectively, at 15.00% per annum. The Borrower shall pay the lender, according to its Applicable Percentage, an Unused Commitment Fee on the actual daily amount of the Unused Commitment Amount during the immediately preceding calendar quarter at the rate of five percent (5.00%)per annum. In the event any payment is not paid on or within five (5) Business Days of the scheduled payment date, an amount equal to two percent (2.00%) of the past due amount shall be payable on demand, in addition to interest accruing. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, the Initial Loan Advance and all Subsequent Draws, including principal, interest, compounded interest, and professional fees thereupon, shall upon the election of the lender, bear interest at the Interest Rate, plus five (5) percentage points. In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded.
Previous report
As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower granted to the lender a security interest in all of Borrower’s right, title, and interest in and to all Inventory or Equipment and machinery, in each case, purchased (or refinanced) with the proceeds of the Initial Loan Advance and any Subsequent Draw, and, to the extent not otherwise included, all Proceeds of each of the foregoing and all products, additions, increases and accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.
Previous report
From October 12, 2023, through February 26, 2024, the Borrower entered into Lender Joinder Agreements (the “Joinder Agreement”) with several individuals and entities as subsequent lenders. Under the terms of the Joinder Agreement, the subsequent lenders agreed to become a lender and be bound by the terms of the Series B Agreement as a lender pursuant to the Series B Agreement.
Previous report
As of the date of this filing, $175,000 has been committed by the lender and subsequent lenders.
Previous report
Series C Financing
Previous report
On October 19, 2023, the Borrower entered into a Series C Loan and Security Agreement (the “Series C Agreement”) with an individual as lender. Under the terms of the Series C Agreement, the lender will make available to Borrower, in an amount not to exceed its Commitment, a Loan Advance amount to be determined by the lender (as such amount may be increased, the “Aggregate Commitment”) in the aggregate, of which (x) a certain amount will be deposited into an account of the Borrower in accordance with its written instructions (the “Initial Loan Advance”) and (y) the remaining balance of the Aggregate Commitment after deducting the Initial Loan Advance shall be deposited into the Escrow Account (the “Escrow Funds”). The Borrower may, at any time, request a Subsequent Draw for all or a portion of the Escrow Funds.
Previous report
The Borrower issued a Promissory Note to the lender in the amount of the lender’s Initial Loan Advance. The principal balance of the Initial Loan Advance and each Subsequent Draw shall bear interest thereon from the Closing Date and applicable Advance Date, respectively, at 18.00% per annum. The Borrower shall pay the Lender, according to its Applicable Percentage, an Unused Commitment Fee on the actual daily amount of the Unused Commitment Amount during the immediately preceding calendar quarter at the rate of five percent (5.00%)per annum. In the event any payment is not paid on or within five (5) Business Days of the scheduled payment date, an amount equal to two percent (2.00%) of the past due amount shall be payable on demand, in addition to interest accruing. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, the Initial Loan Advance and all Subsequent Draws, including principal, interest, compounded interest, and professional fees thereupon, shall upon the election of the lender, bear interest at the Interest Rate, plus five (5) percentage points. In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded.
Previous report
As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower granted to the lender a security interest in all of Borrower’s right, title, and interest in and to all Inventory or Equipment and machinery, in each case, purchased (or refinanced) with the proceeds of the Initial Loan Advance and any Subsequent Draw, and, to the extent not otherwise included, all Proceeds of each of the foregoing and all products, additions, increases and accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.
Previous report
As of the date of this filing, $7,225,000 has been committed by the lender.
Previous report
Series D Financing
Previous report
On March 15, 2024, the Borrower entered into the Series D Loan and Security Agreement (the “Series D Agreement”), with the lenders party thereto from to time for an amount of up to $5,000,000.
Previous report
In connection with the Series D Agreement, on March 15, 2024, Forever 8 also entered into a Subordination Agreement (the “Subordination Agreement”) with each of the lenders, the several individuals, financial institutions or entities from time to time party thereto (collectively, the “Senior Lenders”) and the collateral agent for the Senior Lenders. Forever 8 additionally entered into an Intercreditor Agreement (the “Intercreditor Agreement”) with the lenders party thereto and the collateral agent for such lenders. As of the date of this filing, a total of $0 has been committed by the lender.
Previous report
May 2023 Debt Exchange
Previous report
On May 30, 2023, the Borrower entered into a Debt Exchange Agreement (the “Debt Agreement”) with two Lenders for funds advanced to the Borrower pursuant to secured promissory notes (the “Old Notes”), executed by the Borrower in favor of the Lenders during 2021. Under the terms of the Debt Agreement, the Old Notes were exchanged for new Notes (“New Notes”) as per the terms of the Loan and Security Agreement dated May 30, 2023. The principal of the New Notes issued under the Debt Agreement is $1,650,000.
Previous report
March 2023 Offering
Previous report
On March 15, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Hudson Bay Master Fund Ltd. (“Hudson Bay”) for the issuance and sale of a Senior Secured Convertible Note with an initial principal amount of $5,555,000 (the “Hudson Note”) at a conversion price of $6.245 per share of the Company’s common stock, and a warrant (the “Hudson Warrant”) to purchase up to 889,512 shares of Common Stock with an initial exercise price of $6.245 per share of Common Stock (the “Private Placement”). The purchase price of the Hudson Note and the Hudson Warrant is $5 million.
Previous report
The entire outstanding principal balance on the Hudson Note and any outstanding fees or interest was due and payable in full on January 15, 2024 (“Maturity Date”). The Hudson Note did not bear interest, provided, however, that the Hudson Note would bear interest at 18% per annum upon the occurrence of an event of default. The Hudson Note was paid in full on February 26, 2024. Additionally, the Company redeemed all of the Hudson Warrants for $660,000 on October 23, 2023. Palladium Capital Group, LLC acted as placement agent for the Private Placement. For the acting as placement agent in the Private Placement, the Placement Agent received (i) cash compensation of $400,000 (8% of the gross proceeds to the Company) and (ii) a warrant to purchase up to 71,161 shares of Common Stock (8% of the shares of Common Stock underlying the Hudson Note).
Previous report
The Company repaid the full amount under the Hudson Note and redeemed the Hudson Warrant in 2024. See “Note 16 – Convertible Note Payable” in the accompanying financial statements for further information.
Previous report
There have been no changes to our critical accounting policies during the three and six months ended June 30, 2025. Critical accounting policies and the significant accounting estimates made in accordance with such policies are regularly discussed with the Audit Committee of the Company’s board of directors. Those policies are discussed under “Critical Accounting Policies” in our “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as in our consolidated financial statements and the footnotes thereto, included in the Annual Report on Form 10-K.
Previous report
Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.
Previous report
Interest expense includes the cost of our borrowings under our debt arrangements. Interest income includes the interest earned under our notes receivable.
Previous report
Gain on extinguishment of liabilities includes the gain recognized related to the write-down of liabilities due to settlements.
Previous report
For the three months ended June 30, 2025, revenues increased by $2,295,053 or 43.44%, as compared to the three months ended June 30, 2024. The increase was attributable to increased demand from our customers due to increased sales to end users.
Previous report
For the three months ended June 30, 2025, cost of revenues increased by $2,373,540 or 59.94%, as compared to the three months ended June 30, 2024. The increase was largely attributable to the increase in revenues as well as the mix of products sold being lower margin.
Previous report
For the three months ended June 30, 2025, gross profit decreased by $78,487 or 5.93%, as compared to the three months ended June 30, 2024. The decrease was largely attributable to lower margin product sales.
Previous report
Selling, general and administrative expenses were $2,451,832 and $2,191,948 for the three months ended June 30, 2025 and 2024, respectively, representing an increase of $259,884, or 11.86%. The increase was largely attributable to an increase in selling costs related to increased revenues.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (12)
Previous wording
As explained above, unless otherwise indicated, the terms “we,” “us,” “our,” “our Company,” and “the Company” refer to Eightco Holdings Inc., together with its consolidated subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read together with the Company’s financial statements and related notes appearing elsewhere in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to the Company’s plans and strategy for the Company’s business and related financing, includes forward-looking statements involving risks and uncertainties and should be read together with the “Cautionary Note Regarding Forwarding- Looking Statements” section of this Quarterly Report. Such risks and uncertainties could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Current wording
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.
Previous wording
We generate the majority of our revenues from inventory financing through our wholly owned subsidiary, Forever 8.
Current wording
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.
Previous wording
Our cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs. In 2022, we incurred costs related to the purchase and resale of Bitcoin mining equipment through CW Machines, LLC. We no longer anticipate purchasing and reselling Bitcoin mining equipment.
Current wording
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.
Previous wording
Restructuring and severance expenses consist of costs associated with organizational changes, including employee severance payments, benefits continuation, contract terminations, asset impairments, and other expenses related to restructuring initiatives.
Current wording
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. No restructuring or severance costs were incurred during the periods presented.
Previous wording
Gain on divestiture includes the gain recognized related to the sale of the assets of Ferguson Containers, Inc.
Current wording
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.
Previous wording
The following table sets forth information comparing the components of net (loss) income for the six months ended June 30, 2025 and 2024:
Current wording
The following table sets forth information comparing the components of net (loss) income for the nine months ended September 30, 2025 and 2024:
Previous wording
Gain on forgiveness of earnout was $0 for the six months ended June 30, 2025 versus $6,100,000 for the six months ended June 30, 2024. The full amount of the earnout rights were forgiven in 2024.
Current wording
Gain on forgiveness of earnout was $0 for the nine months ended September 30, 2025 versus $6,100,000 for the nine months ended September 30, 2024. The full amount of the earnout rights were forgiven in 2024.
Previous wording
Gain on extinguishment of liabilities was $0 for the six months ended June 30, 2025 versus $6,497,193 for the six months ended June 30, 2024.
Current wording
Gain on extinguishment of liabilities was $0 for the nine months ended September 30, 2025 versus $7,427,193 for the nine months ended September 30, 2024.
Previous wording
Cash Flows for the Six Months Ended June 30, 2025 and 2024
Current wording
Cash Flows for the Nine Months Ended September 30, 2025 and 2024
Previous wording
Net cash provided by operating activities was 340,614 during the six months ended June 30, 2025, which consisted primarily of depreciation and amortization of $1,187,373, amortization of debt issuance costs of $500,000, and changes in assets and liabilities of $3,426,059 offset by a net loss of $3,718,245 and gain on divestiture of $1,231,774.
Current wording
Net cash used in operating activities was 1,279,248 during the nine months ended September 30, 2025, which consisted primarily of the net loss of $29,562,461 impacted by noncash items related to gain on divestiture of 1,231,774 offset depreciation and amortization of $1,764,410, amortization of debt issuance costs of $750,000, shared-based compensation of $2,476,906, change in fair value of digital assets of $18,639,017 and changes in assets and liabilities of $5,884,654.
Previous wording
Net cash (used in) operating activities was ($1,163,566) during the six months ended June 30, 2024, which consisted primarily of gain on extinguishment of liabilities of $6,497,193 and gain on forgiveness of earnout of $6,100,000 offset largely by net income of $6,389,855, depreciation and amortization of $1,218,430, amortization of debt issuance costs of $837,750, and changes in assets and liabilities of $3,566,551.
Current wording
Net cash (used in) operating activities was ($1,085,865) during the nine months ended September 30, 2024, which consisted primarily of net income of $3,212,482, depreciation and amortization of $1,831,064, amortization of debt issuance costs of $1,087,750, and changes in assets and liabilities of $5,830,511 offset largely by gain on extinguishment of liabilities of $7,427,193 and gain on forgiveness of earnout of $6,100,000.
Previous wording
Net cash provided by investing activities was $397,759 during the six months ended June 30, 2025 compared to $(5,881) for the six months ended June 30, 2024. The increase in net cash provided by investing activities is largely attributable to the sale of the assets of the assets of the Corrugated Business.
Current wording
Net cash used in investing activities was $304,865,683 during the nine months ended September 30, 2025 compared to $47,685 for the nine months ended September 30, 2024. The increase in net cash used in investing activities is largely attributable to the purchase of digital assets related to our Digital Asset Treasury strategy.