Eightco Holdings Reports Significant Financial Decline, Net Income Turnaround in Latest Quarter

Eightco Holdings Inc. reported significant financial changes in its 10-Q filing for the three and nine months ended September 30, 2024. The company experienced a substantial decline in revenue, with total revenues for the third quarter dropping to $7.7 million from $23.3 million in the same period of 2023, marking a decrease of 67.1%. For the nine-month period, revenues fell to $24.3 million from $59.8 million, a decline of 59.3%. This downturn was primarily attributed to reduced sales in the inventory management solutions segment, as the company redirected capital to repay outstanding convertible notes.

Gross profit for the third quarter also decreased to $2.0 million from $2.7 million year-over-year, while gross profit for the nine months was $5.7 million, down from $7.1 million. Operating losses widened to $(1.7 million) for the third quarter compared to $(687,543) in 2023, although the nine-month operating loss improved slightly to $(6.4 million) from $(7.0 million).

Despite the revenue decline, Eightco reported a net income of $3.2 million for the nine months ended September 30, 2024, a significant turnaround from a net loss of $(62.2 million) in the prior year. This improvement was largely due to total other income of $9.6 million, compared to a loss of $(55.2 million) in 2023, which included gains from extinguishment of liabilities and forgiveness of earnout shares.

The company’s financial position showed a decrease in cash and cash equivalents, which fell to approximately $2.4 million from $5.2 million at the end of 2023. Total current assets also declined to $9.6 million, down from $14.0 million. However, total liabilities decreased significantly to $36.6 million from $59.8 million, resulting in total stockholders’ equity of $12.6 million, a recovery from a deficit of $(4.3 million) at the end of 2023.

Strategically, Eightco has been restructuring its operations, including reducing headcount to lower corporate overhead. The company has also engaged in various financing activities, including the issuance of common stock under an At-The-Market (ATM) agreement, generating net proceeds of approximately $2.2 million. Additionally, the company has been actively managing its debt, including a significant payment agreement with Vinco Ventures to resolve outstanding liabilities.

The company continues to face challenges, including a material weakness in internal controls over financial reporting, which management plans to address by engaging outside consultants. The current cash position raises concerns about the company's ability to sustain operations over the next 12 months, prompting plans to seek additional capital.