SEGMENTING REPORTING

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENTING REPORTING

21. SEGMENTING REPORTING

The Company’s principal operating segments coincide with the types of products to be sold. The products from which revenues are derived are consistent with the reporting structure of the Company’s internal organization. The Company’s two reportable segments for the years ended December 31, 2023 were the Inventory Management Solutions segment and the Corrugated segment. The Company’s chief operating decision maker has been identified as the Chairman and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon the Company’s management organization structure as of December 31, 2023 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed. There are no inter-segment revenue transactions and, therefore, revenues are only to external customers.

Segment operating profit is determined based upon internal performance measures used by the chief operating decision maker. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including net revenues, gross profit and operating loss. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Company manages certain operating expenses separately at the corporate level and does not allocate such expenses to the segments. Segment income from operations excludes interest income/expense and other income or expenses and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges, and unallocated costs in measuring the performance of the reportable segments.

Segment information available with respect to these reportable business segments for the year ended December 31, 2023 and 2022 was as follows:

	For the Years Ended December 31,
	2023			2022
Revenues:
Inventory Management Solutions	$	67,568,353		$	23,785,070
Corrugated		7,729,131			8,035,709
Total segment and consolidated revenues	$	75,297,484		$	31,820,779
Cost of revenues:
Inventory Management Solutions	$	61,308,561		$	23,554,550
Corrugated		5,496,462			6,072,319
Total segment and consolidated cost of revenues	$	66,805,023		$	29,626,869
Gross profit:
Inventory Management Solutions	$	6,259,792		$	230,520
Corrugated		2,232,669			1,963,390
Total segment and consolidated gross profit	$	8,492,461		$	2,193,910
Income from operations:
Inventory Management Solutions	$	(3,063,241	)	$	(3,034,702	)
Corrugated		702,645			391,139
Corporate		(7,116,576	)		(12,863,941	)
Total segment and consolidated income from operations	$	(9,477,172	)	$	(15,507,504	)
Depreciation and amortization:
Inventory Management Solutions	$	2,830,306		$	578,608
Corrugated		214,225			270,325
Total segment and consolidated depreciation and amortization	$	3,044,531		$	848,933
Revenues by geography:
North America	$	14,634,111		$	19,020,719
Europe		60,663,373			12,800,060
Total geography and consolidated revenues	$	75,297,484		$	31,820,779
Segment capital expenditures:
Inventory Management Solutions	$	51,922,852		$	1,775,748
Corrugated		2,967,629			105,703
Corporate		2,409,913			-
Total segment and consolidated capital expenditures	$	57,300,394		$	1,881,451
Segment total assets:
Inventory Management Solutions	$	50,023,910		$	49,572,768
Corrugated		2,967,629			3,109,690
Corporate		2,419,904			5,918,141
Total segment and consolidated assets	$	55,411,443		$	58,600,599

EIGHTCO HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2023 and 2022