Company: ORBS
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004802
Chunk: 663

Company: Eightco Holdings Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 663
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 not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative
impairment analysis would be performed to determine if impairment is required. We may also elect to perform a quantitative analysis of
goodwill initially rather than using a qualitative approach.

The
impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment,
discounted cash flow and market multiples method, requires our management to make certain assumptions and estimates regarding certain
industry trends and future profitability of our reporting units. If the fair value of a reporting unit exceeds the related carrying value,
the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of a
reporting unit exceeds its fair value, an impairment loss is recorded for the difference. The valuation of goodwill is affected by, among
other things, our business plan for the future and estimated results of future operations. Future events could cause us to conclude that
impairment indicators exist, and, therefore, that goodwill may be impaired. Goodwill is a significant percentage of the Company’s’
long term assets and therefore, estimates regarding the fair value of our goodwill have a material impact on our financial statements.

Warrant
Accounting

The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

The
Company classifies a warrant to purchase shares of its common stock as equity on its consolidated balance sheets as this warrant is a
free-standing financial instrument that is indexed to the Company’s own stock and meets the criteria for equity classification.
Each warrant is initially recorded within equity at the date of grant, net of issuance costs, and is not subsequently re-measured. Changes
in the fair value of the warrant are not recognized after the initial measurement. The warrants will remain classified in equity until
they are exercised or expire.

Key
Components of our Results of Operations

Revenues

We
generate the majority of our revenues from inventory financing through our wholly owned subsidiary, Forever 8. Additionally,
we generate revenues from the sale of corrugated custom packaging to a wide array of customers. In 2022, the Company generated revenues
from the sale of Bitcoin mining equipment through CW Machines, LLC. The Company no longer expects to generate revenue
from this business line.

Cost
of Revenues

Our cost of revenues includes inventory costs, materials and supplies