ACQUISITIONS AND DIVESTITURES

12 Months Ended

Dec. 31, 2024

Restructuring and Related Activities [Abstract]

ACQUISITIONS AND DIVESTITURES

4. ACQUISITIONS AND DIVESTITURES

Effective October 1, 2022, the Company acquired 100% of the issued and outstanding membership interests of Forever 8.

During fiscal year 2024, the Company entered into multiple amendments with the former owners of Forever 8 that significantly altered the original acquisition consideration. These changes included:

● The forgiveness of $5.4 million in principal on the Promissory Notes,

● The waiver of 215,000 non-voting preferred membership units initially included in the acquisition terms,

● The release of $6.1 million in contingent consideration, which was recognized as a gain in other income during the year ended December 31, 2024, and

● The forgiveness and conversion of approximately $5.7 million in accrued interest on the Promissory Notes, resulting in the issuance of approximately 1.9 million shares of the Company’s common stock. The remaining forgiven interest, totaling $3.86 million, was recorded as a capital contribution to additional paid-in capital (APIC) due to the related-party nature of the transaction.

These modifications resulted in a substantial reduction in the total consideration payable under the original purchase agreement.

EIGHTCO HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2024 and 2023

4. ACQUISITIONS AND DIVESTITURES (continued)

Discontinued Operations

On November 22, 2024, Eightco Holdings Inc. (the “Company”) entered into an Asset Purchase Agreement (the “APA”) to sell substantially all of the assets of its wholly owned subsidiary, Ferguson Containers, Inc. (the “Corrugated Packaging Business”), to Ferguson Containers, LLC, a New Jersey limited liability company controlled by certain management employees of the Corrugated Packaging Business (the “Buyers”). This sale was completed on April 7, 2025. See Subsequent events Note 22 for more details.

As a result of entering into the APA, the Company has classified the operations of Ferguson Containers as discontinued operations in the consolidated financial statements for all periods presented. Assets and liabilities associated with Ferguson Containers have been classified as “held for sale” as of December 31, 2024.

The following summarizes the components of the assets and liabilities from discontinued operations to be divested for the years ended December 31, 2024 and 2023:

	December 31,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	168,323	$	-
Accounts receivable, net		788,317		625,293
Inventories		101,577		114,300
Prepaid expenses and other current assets		105,249		129,893
Property and equipment, net		634,773		739,337
Total assets	$	1,798,239	$	1,608,823
LIABILITIES
Current liabilities:
Accounts payable	$	2,980	$	942
Accrued expenses and other current liabilities		31,775		32,790
Income tax payable		72,976		-
Deferred tax liabilities		-		82,104
Total liabilities	$	107,731	$	115,836

The following summarizes the components of net income from discontinued operations for the years ended December 31, 2024 and 2023:

	Year Ended December 31,
	2024			2023
Revenues		6,823,277			7,729,131
Cost of revenues		4,980,338			5,496,462
Gross profit:		1,842,939			2,232,669
Operating expenses:
Selling, general and administrative		1,439,964			1,530,024
Restructuring and severance		-			-
Operating income		402,975			702,645
Other (expense) income:
Interest (expense)		-			(112	)
Other income		6,613			34,168
Total other income, net		6,613			34,056
Income before income taxes		409,588			736,701
Income tax benefit		(9,128	)		-
Net income from discontinued operations	$	418,716		$	736,701

As a result of this classification, prior period amounts have been reclassified to conform to the current period presentation.

EIGHTCO HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years ended December 31, 2024 and 2023