Company: ORBS
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011052
Chunk: 14

Company: Eightco Holdings Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 14
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 up to 71,161 shares of Common Stock (8% of the shares
of Common Stock underlying the Hudson Note).

The
Company repaid the full amount under the Hudson Note and redeemed the Hudson Warrant in 2024. See “Note 16 – Convertible
Note Payable” in the accompanying financial statements for further information.

34

Critical
Accounting Policies and Significant Judgments and Estimates

There
have been no changes to our critical accounting policies during the nine months ended September 30, 2023. Critical accounting policies
and the significant accounting estimates made in accordance with such policies are regularly discussed with the Audit Committee of the
Company’s board of directors. Those policies are discussed under “Critical Accounting Policies” in our “Management’s
Discussion and Analysis of the Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K
for the year ended December 31, 2022, as well as in our consolidated financial statements and the footnotes thereto, included in the
Annual Report on Form 10-K.

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. In addition, we will generate
revenues from the sale of corrugated custom packaging to a wide array of customers.

Cost
of Revenues

Our
cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs,
depreciation, overhead and shipping and handling costs. In addition, we will incur costs to purchase Bitcoin mining equipment which will
be resold to customers and costs from the development of Web3 products and services.

Selling,
General and Administrative Expenses

Selling,
general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.

Restructuring
and Severance Expenses

Restructuring
and severance expenses consist of costs associated with organizational changes, including employee severance payments, benefits continuation,
contract terminations, asset impairments, and other expenses related to restructuring initiatives.

Interest
Expense and Income, Net

Interest
expense includes the cost of our borrowings under our debt arrangements. Interest income includes the interest earned under our notes
receivable.

Gain
on Forgiveness of Earnout

Gain
on forgiveness of earnout includes the gain recognized related to the forfeiture of the earnout rights by the Sellers of Forever 8.

Other
Income