INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

20. INCOME TAXES

Eightco Holdings Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income.

Forever 8 Fund, LLC, BlockHiro, LLC, Cryptyde Shared Services, LLC and Orb Subsidiary One, LLC are limited liability companies which are disregarded entities for income tax purposes and are owned 100% by Eightco Holdings Inc. and Ferguson Containers, Inc., respectively. The Company pays corporate federal, state and local taxes on income allocated to it from BlockHiro, LLC and 8co Holdings Shared Services, LLC.

CW Machines, LLC is a limited liability company for income tax purposes and is owned 51% by Eightco Holdings Inc. The Company pays corporate federal, state and local taxes on income allocated to it from CW Machines, LLC.

Ferguson Containers is taxed as a corporation and pays corporate federal, state and local taxes on income.

Forever 8 UK Ltd. is taxed as a corporation and pays foreign taxes on income.

F8 Fund EU Holdings BV is taxed as a corporation and pays foreign taxes on income.

The Company adopted ASU 2023-09 on January 1, 2025, on a prospective basis. Accordingly, the enhanced income tax disclosures required under the new standard are presented only for the year ended December 31, 2025. Prior period amounts have not been recast and are therefore not comparable.

EIGHTCO HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2025 and 2024

20. INCOME TAXES (continued)

Components of income before income taxes were as follows:

	2025			2024
United States	$	(260,413,611	)	$	315,844
Foreign		(1,570,665	)		248,218
Income (loss) before income tax expense	$	(261,984,276	)	$	564,062
Less: income before income tax expense – discontinued operations		(105,308	)		(409,588	)
Income before income tax expense – continuing operations	$	(262,089,584	)	$	154,474

The tax effects of temporary differences that give rise to deferred tax assets or liabilities are presented below:

	2025			2024
Deferred tax assets:
Stock-based compensation	$	2,566,224		$	(8,387	)
Goodwill and intangibles		3,712,216			487,575
Leases		-			-
Reserves		764,137			117,600
Net operating loss carryforwards		16,549,866			8,118,656
Mark-to-market income/loss		47,083,883			-
Less: valuation allowance		(70,676,326	)		(8,715,444	)
Net deferred tax assets	$	-		$	-
Deferred tax liabilities:
Right of use assets	$	-			-
Property and equipment	$	-			-
Net deferred tax liabilities	$	-		$	-
Net deferred taxes	$	-		$	-

The income tax provision consists of the following:

	2025			2024
Current:
Federal	$	-		$	-
State		8,629			72,976
Foreign		20,155			(135,337	)
Total current		28,784			(62,361	)
Deferred:
Federal		50,504,070			(55,816	)
State		11,070,526			(26,287	)
Foreign		296,181			-
Less: change in valuation allowance		(61,870,777	)		-
Total deferred		-			(82,103	)
Total income tax provision (benefit)	$	28,784		$	(144,464	)
Less: income tax provision (benefit) – discontinued operations		8,629			(9,127	)
Total income tax provision (benefit) – continuing operations		20,155			(135,337	)

EIGHTCO HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2025 and 2024

20. INCOME TAXES (continued)

Enhanced Disclosures (ASU 2023-09 – 2025)

Effective Tax Rate Reconciliation (2025)

The following is a reconciliation of the statutory federal income tax rate applied to pre-tax net loss compared to the income taxes in the statement of operations for the year ended December 31, 2025.

In accordance with ASU 2023-09, reconciling items greater than 5% of the statutory tax rate are presented separately. Amounts below this threshold are aggregated within “Other.” The 2025 reconciliation below is not presented on a comparable basis with prior periods due to the adoption of ASU 2023-09.

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2025 is as follows:

	2025			2025
Tax at federal statutory rate	$	(55,016,696	)		21.0	%
State and local income taxes		(16,436,727	)		6.3	%
Foreign tax effects		31,413			0.0	%
Tax credits		-			0.0	%
Provision to return true ups		(1,689,901	)		0.6	%
Rate change		5,570,071			-2.1	%
Nondeductible expenses		5,699,847			-2.2	%
Change in valuation allowance		61,870,777			-23.6	%
Total income tax provision		28,784			0.0	%
Less: adjustment for discontinued operations		(8,629	)		0.0	%
Income tax provision (benefit) from continuing operations	$	20,155			0.0	%

Income Taxes Paid (Disaggregated) – 2025

	2025
U.S. federal	$	-
U.S. state		-
Foreign		-
Total income taxes paid	$	-

Legacy Disclosures (ASC 740 – 2024)

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2024 is as follows:

	2024
Tax at federal statutory rate		21.0	%
State and local income taxes		12.9	%
Foreign tax effects		0.0	%
Tax credits		-24.0	%
Provision to return true ups		0.0	%
Rate change		0.0	%
Nondeductible expenses		-1.7	%
Change in valuation allowance		-33.8	%
Total income tax provision		-25.6	%
Less: adjustment for discontinued operations		-62.0	%
Income tax provision (benefit) from continuing operations		-87.6	%

The Company recorded an income tax expense of approximately $20,155 and an income tax benefit of $135,337 for the years ended December 31, 2025 and 2024, respectively. This expense and benefit reflects the release of certain foreign tax obligations and changes in deferred tax balances, including adjustments for valuation allowances. The Company recorded a full valuation allowance against its deferred tax assets in both 2025 and 2024 due to cumulative losses and the lack of objectively verifiable positive evidence. A separate tax expense of approximately $8,629 related to the discontinued operations of Ferguson Containers is presented within discontinued operations on the consolidated statements of operations.

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2025, the Company had $0 unrecognized tax benefits and $0 charges during 2025, and accordingly, the Company did not recognize any interest or penalties during 2025 related to unrecognized tax benefits. There is $0 accrual for uncertain tax positions as of December 31, 2025.

The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2022 and thereafter are subject to examination by the relevant taxing authorities.

As of December 31, 2025, the Company had a net operating loss carryforward for federal income tax purposes of approximately $66,723,534. These carryforwards were generated in 2022 and later, and therefore do not expire, but are subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions, and may be utilized to offset up to 80% of taxable income in any future period.

On July 2, 2025, U.S. Congress enacted the Taxpayer Fairness and Growth Act of 2025, which includes significant amendments to the Internal Revenue Code. Key provisions include:

● Limitations on the deductibility of certain interest and R&D expenses;

● Modifications to the foreign-derived intangible income (“FDII “) and global intangible low-taxed income (“GILTI”) regimes.

The Company evaluated the impact of the legislation on its consolidated financial statements, including deferred tax assets and liabilities, and incorporated the effects of the enacted changes in these consolidated financial statements for the year ended December 31, 2025, consistent with ASC 740-10-45-15. The Company expects the corporate rate reduction and other provisions to have a favorable impact on its effective tax rate beginning in fiscal 2026.