# Eightco Holdings Inc.: Form 10-Q for the period ended Mar 31, 2026

- Company: [Eightco Holdings Inc.](/companies/orbs.md) (CIK 1892492)
- Form: 10-Q
- Filed: 2026-05-15
- Accepted by EDGAR: May 15, 2026, 16:46 ET
- Period: 2026-03-31
- Accession: 0001493152-26-023890
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1892492/000149315226023890/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1892492/000149315226023890/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $7.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $7.3m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $215.3k | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-01-01 to 2026-03-31 | $10.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | −$10.5m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | −$76.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.32 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 240,575,350 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | −$4.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2026-03-31 | $7.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $224.6m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $340.6m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $18.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $18.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-03-31 | $322.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,070 characters.

*Unless otherwise indicated, the terms “we,” “us,” “our,” “Eightco,” and the “Company” refer to Eightco Holdings Inc. together with its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.*

*This section contains forward-looking statements within the meaning of the federal securities laws, including statements regarding our strategy, plans, future financial performance, liquidity, and capital allocation framework. These statements involve risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause such differences are discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report, as well as under “Risk Factors” in this Quarterly Report and in our most recent Annual Report on Form 10-K. We undertake no obligation to update any forward-looking statements except as required by law.*

### Overview

Eightco Holdings Inc. (NASDAQ: ORBS) is building the authentication and trust layer for the post-AGI world. Through a first-of-its-kind Worldcoin digital asset treasury strategy and a portfolio of strategic investments in frontier technology companies, the Company is establishing a universal foundation for digital identity and Proof of Human (PoH) verification. The Company’s mission is organized around three core pillars: consumer authentication, enterprise authentication, and gaming authentication.

The Company also operates Forever 8, an e-commerce inventory solutions business acquired in October 2022, which represents its sole revenue-generating operating segment.

Our corporate headquarters are located in Easton, Pennsylvania, and our common stock is listed on the Nasdaq Capital Market under the symbol “ORBS.”

### Forever 8

Forever 8 provides funding solutions and inventory management services for e-commerce businesses, enabling sellers to maintain optimal stock levels without tying up their own capital. Forever 8 is the Company’s sole operating segment and primary source of revenue. For the fiscal years ended December 31, 2025 and 2024, Forever 8 generated revenues of $32,981,126 and $39,621,272, respectively. Forever 8’s revenue base is highly concentrated, with one customer representing approximately 89% and 75% of total revenues for the fiscal years ended December 31, 2025 and 2024, respectively.

### Adoption of Digital Asset Treasury (“DAT”) Strategy

### Strategy Overview

On September 8, 2025, our Board of Directors approved the adoption of a Digital Asset Treasury Strategy under which Eightco holds digital assets, primarily Worldcoin (WLD), as part of a long-term treasury reserve framework. Under this policy, we may allocate excess liquidity, operating cash flows, and proceeds from financing transactions to the acquisition of digital assets.

This strategy reflects a dual-pillar model combining (i) the operating performance of Forever 8, and (ii) long-term digital asset holdings designed to enhance our capital base and provide shareholders with exposure to emerging decentralized technologies.

### Rationale for Strategy

Key factors underlying the DAT Strategy include:

- The growth and potential of the Worldcoin ecosystem
- The belief that certain digital assets may serve as long-term stores of value
- The ability to report digital assets at fair value under ASU 2023-08
- Opportunities for differentiated long-term returns
- The availability of capital to scale a treasury strategy of meaningful size
- Management expects digital assets to remain a significant component of our long-term capital allocation framework.

27

### Capital Raising Activities

During the quarter ended March 31, 2026, we completed substantial financing transactions to support the DAT Strategy:

- We generated additional proceeds through our at-the-market (“ATM”) equity offering program.

A significant portion of the ATM proceeds were deployed to acquire digital assets and invest in strategic investments. These capital raises materially strengthened our liquidity and expanded our balance sheet.

### Digital Asset Acquisitions

Our holdings consist primarily of:

- Worldcoin (WLD)
- Ethereum (ETH)
- U.S. dollar-denominated stablecoins
- Other digital assets used for liquidity management, trade settlement, or operational purposes

Digital assets are custodied with institutional-grade providers, including Kraken, Coinbase, and FalconX.

### Custody, Concentrations and Transfer Restrictions

As of March 31, 2026, substantially all digital assets were held with a small number of U.S.-based institutional custodians under cold-storage arrangements. From time to time, a significant portion of our digital assets may be concentrated with a single custodian. Certain assets (including staking-ineligible or restricted tokens, if any) may be subject to withdrawal, settlement, or transfer restrictions pursuant to platform or network constraints. We continually evaluate custodian concentration and portability risk as part of our liquidity planning.

### Accounting for Digital Assets

Effective January 1, 2025, we adopted ASU 2023-08, which requires eligible digital assets to be measured at fair value, with changes recognized in net income each reporting period.

Key effects include:

- Digital assets are presented at fair value on our balance sheets
- Unrealized gains and losses from price fluctuations flow through earnings
- Earnings may be more volatile due to digital asset market movements
- Historical impairment-only accounting no longer applies

This measurement model increases transparency but introduces meaningful volatility tied to the valuation of Worldcoin and other digital assets.

### Volatility and Earnings Sensitivity

Because we measure eligible crypto assets at fair value under ASU 2023-08, period-to-period changes in the market price of Worldcoin (WLD) and other digital assets will directly affect reported earnings and cash provided by (used in) operating activities to the extent realized on conversion. This may result in material earnings volatility unrelated to our Forever 8 operating performance.

### Critical Accounting Policies and Significant Judgments and Estimates

There were no material changes to our critical accounting policies during the three months ended March 31, 2026, other than the adoption of ASU 2023-08, which requires eligible crypto assets to be measured at fair value with changes recognized in net income. Our significant accounting policies are described in Note 2 to the condensed consolidated financial statements included in this Quarterly Report and in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

### Key Components of our Results of Operations

### Revenues

We generate the substantial majority of our revenues from inventory financing and inventory management services through our wholly owned subsidiary, Forever 8. Our revenues are primarily derived from the purchase and resale of consumer products to e-commerce retailers under our inventory management solutions model. Following the adoption of our Digital Asset Treasury (“DAT”) strategy in September 2025, the Company does not expect to generate revenue from digital asset activities.

### Cost of Revenues

Cost of revenues includes the cost of purchased inventory, materials and supplies, internal labor and related benefits, subcontractor costs, depreciation, overhead, and shipping and handling costs. These costs are directly associated with our Forever 8 inventory management activities. We no longer incur costs related to the purchase or resale of Bitcoin mining equipment, as this line of business is no longer pursued.

### Selling, General and Administrative Expenses

Selling, general and administrative expenses include selling and marketing costs, payroll and employee-related expenses, administrative expenses, professional fees, insurance, technology and software costs, and other overhead required to support both our Forever 8 operations and our corporate infrastructure. SG&A also includes expenses associated with supporting the Digital Asset Treasury function, including custodial fees, compliance costs, and professional services related to digital asset oversight.

### Restructuring and Severance Expenses

Restructuring and severance expenses consist of costs associated with organizational changes, including employee severance, benefits continuation, contract termination costs, and costs associated with facility consolidations or other restructuring activities. These expenses vary depending on management’s strategic initiatives. No restructuring or severance costs were incurred during the periods presented.

### Interest Expense and Income, Net

Interest expense reflects the cost of borrowings under our lines of credit and other financing arrangements used to support our Forever 8 inventory-financing activities. Interest income primarily includes earned interest on notes receivable and cash-equivalent investments, as well as yield earned on short-term instruments.

### Change in Fair Value of Digital Assets

Beginning in September 2025, following the deployment of our Digital Asset Treasury strategy, the Company holds digital assets measured at fair value in accordance with ASU 2023-08. Changes in the fair value of digital assets including both realized and unrealized gains and losses are recognized in earnings in the period in which they occur. Because the DAT is not a revenue-generating activity, changes in fair value represent a key driver of period-over-period volatility in our results of operations.

### Gain on Divestiture

Gain on divestiture represents gains recognized in connection with the sale of assets. This includes the gain recognized on the sale of the Ferguson Containers corrugated packaging business on April 7, 2025.

### Gain on Extinguishment of Liabilities

Gain on extinguishment of liabilities includes gains recognized when outstanding liabilities are settled for amounts less than their carrying value, or when obligations are legally extinguished.

### Other Income

Other income includes the interest income received from the Wattum Note and Reichard Containers Note.

### Results of Operations

### Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

The following table sets forth information comparing the components of net (loss) income from continuing operations for the three months ended March 31, 2026 and 2025:

|  | Three Months Ended March 31, 2026 | 2025 | Period over Period Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| **Revenues, net** | $7,561,965 | $9,913,987 | $(2,352,022) | -23.7% |
| Cost of revenues | 7,346,704 | 9,100,728 | (1,754,024) | -19.3% |
| **Gross profit** | 215,261 | 813,259 | (597,998) | -73.5% |
| **Operating expenses:** |  |  |  |  |
| Selling, general and administrative | 10,728,546 | 2,229,425 | 8,499,121 | 381.2% |
| Restructuring and severance | - | - | - | 0.0% |
| Total operating expenses | 10,728,546 | 2,229,425 | 8,499,121 | 381.2% |
| Operating loss | (10,513,285) | (1,416,166) | (9,097,119) | -642.4% |
| **Other (expense) income:** |  |  |  |  |
| Interest income (expense) | (276,718) | (1,288,804) | 1,012,086 | 78.5% |
| Gain on divestiture | - | - | - | 0.0% |
| Gain on extinguishment of liabilities | 870,000 | - | 870,000 | 100.0% |
| Change in fair value of digital assets | (66,501,874) | - | (66,501,874) | -100.0% |
| Gains on disposal of short-term investments | 6,019 | - | 6,019 | 100.0% |
| Other income | 279,954 | 21,898 | 258,056 | 1,178.5% |
| Total other income (expense), net | (65,622,619) | (1,266,906) | (64,355,713) | -5,213.9% |
| Income (loss) before income taxes | (76,135,904) | (2,683,072) | (73,452,832) | -2,737.6% |
| Income tax expense (benefit) | - | (28,793) | 28,793 | 100.0% |
| **Net income (loss) from continuing operations** | (76,135,904) | (2,654,279) | (73,481,625) | -2,768.4% |
| **Net income (loss) from discontinued operations** | - | 105,553 | (105,553) | -100.0% |
| **Net income (loss)** | $(76,135,904) | $(2,548,725) | $(73,587,178) | -2,887.2% |

### Revenue

For the three months ended March 31, 2026, revenues were $7,561,965, representing a decrease of $2,352,022, or 23.7%, compared to revenues of $9,913,987 for the three months ended March 31, 2025. The decrease reflects cancellation of certain agreements with customers and reduced order volumes from certain customers as the Company exited its liquidation-model operations and is in the process of winding down relationships where we previously were operating customer storefronts to mitigate losses.

### Cost of Revenues

Cost of revenues was $7,346,704 for the three months ended March 31, 2026, compared to $9,100,728 for the three months ended March 31, 2025, a decrease of $1,754,024, or 19.3%. The decrease correlates to the reduction in volumes described above.

### Gross Profit

Gross profit decreased to $215,261 for the three months ended March 31, 2026, compared to gross profit of $813,259 for the three months ended March 31, 2025, a decline of $597,998, or 73.5%. The decrease was primarily driven by the decrease in revenues.

### Operating Expenses

Selling, general and administrative (“SG&A”) expenses were $10,728,546 for the three months ended March 31, 2026, compared to $2,229,425 for the three months ended March 31, 2025, an increase of $8,499,121, or 381.2%.

The increase was attributable to:

- Higher professional fees and advisory costs incurred in connection with the Company’s capital raising and the implementation of its Digital Asset Treasury strategy;
- Increased compensation and corporate overhead required to support expanded operations, including share-based compensation; and
- Higher technology, compliance, and custodial-related costs associated with digital asset oversight.

The Company did not incur restructuring or severance expenses in either period.

### Interest Expense

Net interest expense totaled $(276,718) for the three months ended March 31, 2026, compared to $(1,288,804) for the three months ended March 31, 2025, a decrease of $1,012,086, or 78.5%, reflecting lower average borrowings on the Company’s financing facilities.

### Gain on Extinguishment of Liabilities

The Company recognized a gain on extinguishment of liabilities of $870,000 for the three months ended March 31, 2026. The gain on extinguishment of liabilities was related to fulfilling the terms of settlement agreements for past rents and severances. There was no comparable activity in the prior-year period.

### Change in Fair Value of Digital Assets

The Company recognized a loss of $(66,501,874) related to fair value changes of its digital asset holdings during the three months ended March 31, 2026. The Company did not hold digital assets during the comparable 2025 period.

### Other Income

Other income increased to $279,954 for the three months ended March 31, 2026, from $21,898 in the prior-year period, an increase of $258,056, primarily due to addition of the Reichard Corrugated Note.

### Income (Loss) Before Income Taxes

Loss before income taxes was $(76,135,904) for the three months ended March 31, 2026, compared to $(2,683,072) for the three months ended March 31, 2025. The increased loss is primarily attributable to the adoption of the Digital Asset Treasury strategy and the resulting fair value losses recognized during the period, as well as lower gross profit and higher SG&A expenses, as well as asset write-downs related to the exit from the liquidation business model for Forever 8.

### Income tax expense

Income tax expense was $0 for the three months ended March 31, 2026, compared to an income tax benefit of $(28,793) for the three months ended March 31, 2025. The Company continues to maintain a full valuation allowance on its net deferred tax assets.

### Net income (loss)

Net loss from continuing operations was $(76,135,904) for the three months ended March 31, 2026, compared to $(2,654,279) for the three months ended March 31, 2025. Net loss from discontinued operations was $0 for the three months ended March 31, 2026, compared to net income from discontinued operations of $105,553 for the three months ended March 31, 2025. Total net loss was $(76,135,904) for the three months ended March 31, 2026, compared to $(2,548,725) for the three months ended March 31, 2025.

### Liquidity and Capital Resources

### Overview

Eightco Holdings Inc. funds its operations through a combination of equity and debt financing, including proceeds from its At-The-Market (“ATM”) offering program, private placement transactions, and borrowings under its line of credit facility. These proceeds were deployed primarily into the Company’s Digital Asset Treasury and strategic investments.

As of March 31, 2026, the Company had cash and cash equivalents of $7,546,486, compared to $58,501,108 as of December 31, 2025. In addition to cash, the Company held digital assets at fair value of $175,309,890 as of March 31, 2026. Combined cash and digital assets were approximately $182.9 million as of March 31, 2026. Total assets of $340,632,698 at March 31, 2026, and total liabilities of $18,304,512, resulting in total stockholders’ equity of $322,328,186 at March 31, 2026.

Outstanding debt as of March 31, 2026 consisted of $8,725,000 under the Company’s lines of credit and $400,000 under lines of credit with related parties, for a total outstanding lines of credit of $9,125,000. Outstanding debt as of December 31, 2025 consisted of $8,150,000 under the Company’s lines of credit and $2,590,000 under lines of credit with related parties, for a total outstanding lines of credit of $10,740,000, as reported in our Annual Report on Form 10-K. The lines of credit bear interest at rates ranging from 12% to 18% and are collateralized by the inventory of the Company.

The sale of the Ferguson Containers corrugated packaging business was completed on April 7, 2025. The Company received $557,835 in cash proceeds at closing plus a $2.5 million seller note receivable, and the buyer assumed certain liabilities. The divestiture generated a gain of $1,231,774 and eliminated the operating overhead associated with that business segment.

### Liquidity Profile

As of March 31, 2026, our liquidity resources consisted of $7.5 million of cash and cash equivalents, $32.5 million of short-term investments (consisting of U.S. government securities and money market funds), and $75.5 million of U.S. dollar-denominated stablecoins, for total near-cash liquidity of approximately $115.6 million. We also held an additional $99.8 million of other digital assets (primarily Worldcoin (WLD) and Ethereum (ETH)), which are subject to market price volatility. We actively manage working capital by converting stablecoins and, when appropriate, other digital assets to U.S. dollars to meet operating needs. During the three months ended March 31, 2026, we used $4.7 million of cash in operating activities, or approximately $1.6 million per month. Substantially all of our reported $76.1 million net loss for the quarter consisted of non-cash items, including a $66.5 million unrealized loss on digital assets and $5.1 million of non-cash share-based compensation. Based on our current operating cash use, we believe our near-cash liquidity is sufficient to fund our operating cash needs for substantially in excess of the next 12 months, before consideration of additional capital that may be raised under our at-the-market equity offering program or monetization of our other digital asset and strategic investment holdings.

### Sources of Liquidity

#### ATM Program

We raised additional capital during the quarter under our ATM program. Proceeds were used to acquire digital assets and fund working capital needs.

#### Forever 8 Credit Facilities (Series A, B, C, and D)

Forever 8 continues to rely on its secured inventory financing facilities (the “Forever 8 Facilities”), which remain active. As of March 31, 2026, we had approximately $9.1 million outstanding and unused availability of approximately $2.0 million under the Forever 8 Facilities, subject to borrowing base and other conditions.

In the aggregate, these facilities provide:

- Interest rates ranging from 15% to 18% per annum
- Unused commitment fees of approximately 5% per annum
- A revolving draw structure through “Initial Loan Advances” and “Subsequent Draws” from lender-controlled escrows
- Collateral in the form of Forever 8 inventory, equipment, and related proceeds

As of March 31, 2026, Forever 8 had approximately $9.1 million outstanding under these facilities to support ongoing inventory purchases.

#### Digital Assets as Liquidity

Certain digital assets, particularly U.S. dollar-denominated stablecoins, function as near-cash liquidity sources and may be converted to U.S. dollars as needed.

### Uses of Liquidity

#### Digital Asset Purchases

We deploy a substantial portion of ATM proceeds to acquire digital assets. As of March 31, 2026, we held digital assets at fair value of approximately $175.3 million, consisting primarily of Worldcoin (WLD), Ethereum (ETH), and U.S. dollar-denominated stablecoins. These assets are measured at fair value under ASU 2023-08, with changes recognized in net income, and are custodied with institutional-grade providers, including Kraken, Coinbase, and FalconX.

#### Strategic Private Company Investments

We also deploy liquidity into strategic equity investments in frontier technology companies as part of our long-term capital allocation strategy. In March 2026, we invested $92.6 million in indirect beneficial interests in OpenAI preferred stock, which represents approximately 30% of our total treasury position. We also invested approximately $18 million in Beast Industries, the business platform of content creator MrBeast. An additional $7 million capital commitment was callable through May 9, 2026, at which point the call period expired without being exercised. Additionally, in October 2025, we invested approximately $1 million in Series D Preferred Stock of Mythical, Inc., a developer of blockchain-based video game ecosystems.

#### Forever 8 Inventory Funding

Forever 8 uses liquidity to support inventory purchasing activities on behalf of e-commerce merchants. These requirements are funded through:

- Operating cash flows
- Digital asset conversions
- Borrowings under the Forever 8 Facilities

#### Operating and Corporate Needs

Liquidity is also used to support routine corporate expenses, personnel, professional fees, vendor obligations, and other working capital needs.

#### Digital Asset Volatility

During Q1 2026, we recognized net losses of approximately $66.5 million related to changes in the fair value of digital assets, which materially affected reported results and may impact future liquidity planning given price volatility. Although our $115.6 million of near-cash liquidity (consisting of cash, short-term investments, and stablecoins) is not directly subject to WLD or ETH price movements, a sustained decline in the price of WLD or ETH would reduce the realizable value of our remaining $99.8 million of digital asset holdings and would limit the total liquidity available from our digital asset portfolio. We continue to monitor digital asset market conditions and may adjust our treasury strategy as appropriate.

#### Subsequent Events Affecting Liquidity

Subsequent to March 31, 2026, we issued 19,054,067 shares under our ATM for proceeds of approximately $19.4 million. We also amended our consulting agreement to provide for a flat consulting fee equal to 1% of AUM across treasury and investment assets, which will affect cash outflows over the next 12 months. See Note 21 — Subsequent Events for additional information.

### Future Liquidity Considerations

Our liquidity in future periods will be influenced by:

- The fair value of digital assets held under the DAT Strategy
- Market conditions affecting potential capital raises
- Working capital needs of Forever 8
- Digital asset market liquidity and volatility
- Regulatory developments affecting digital asset custody, trading, and classification
- Broader macroeconomic conditions impacting e-commerce demand

Based on current assumptions and our existing near-cash liquidity of approximately $115.6 million, our other digital asset and strategic equity investment holdings, our continued access to capital through our at-the-market equity offering program, and our currently anticipated operating cash use of approximately $1.6 million per month, we believe our liquidity resources are sufficient to support both our operating business and Digital Asset Treasury Strategy for at least the next twelve months.

### Cash Flows

Since inception, Eightco and its subsidiaries have primarily used its available cash to fund its operations. The following table sets forth a summary of cash flows for the periods presented:

| Cash (used in) provided by: | For the Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Operating Activities | $(4,691,568) | $999,824 |
| Investing Activities | (209,008,951) | (44,647) |
| Financing Activities | 162,745,897 | (759,937) |
| Net increase (decrease) in cash and restricted cash | $(50,954,622) | $195,240 |

### Cash Flows for the Three Months Ended March 31, 2026 and 2025

#### Operating Activities

Net cash used in operating activities was $(4,691,568) during the three months ended March 31, 2026, which consisted primarily of the net loss of $(76,135,904), offset by noncash items including the change in fair value of digital assets of $66,501,874, share-based compensation of $5,141,071, depreciation and amortization of $5,102, and a gain on disposal of $(5,949). Changes in assets and liabilities used cash of $(197,762), primarily reflecting a decrease in accrued expenses and other current liabilities of $(1,244,749) and an increase in accounts receivable of $(34,254), partially offset by a decrease in prepaid expenses and other current assets of $706,642, a decrease in inventories of $325,798, and an increase in accounts payable of $48,801.

Net cash provided by operating activities was $999,824 during the three months ended March 31, 2025, which consisted primarily of the net loss of $(2,548,725), offset by noncash items including depreciation and amortization of $612,664 (continuing and discontinued operations) and amortization of debt issuance costs of $250,000. Changes in assets and liabilities provided cash of $2,685,885, primarily reflecting decreases in inventories of $1,852,604 and accounts receivable of $978,029, and an increase in accrued expenses and other current liabilities of $180,856, partially offset by a decrease in accounts payable of $(450,667), an increase in prepaid expenses and other current assets of $254,118, and changes in discontinued operations of $(129,055).

#### Investing Activities

Net cash used in investing activities was $(209,008,951) during the three months ended March 31, 2026, compared to $(44,647) for the three months ended March 31, 2025. The increase in net cash used in investing activities is largely attributable to purchases of investments of $(336,039,104) and purchases of digital assets of $(65,910,119) in connection with the implementation of the Company’s Digital Asset Treasury strategy, partially offset by proceeds from the sale of investments of $192,902,626 and repayments of principal under loans held-for-investment of $37,646.

#### Financing Activities

Net cash provided by financing activities was $162,745,897 during the three months ended March 31, 2026, compared to net cash used in financing activities of $(759,937) for the three months ended March 31, 2025. The change was largely attributable to net proceeds from the issuance of common stock of $165,360,897 generated through the Company’s ATM program, partially offset by a $1,000,000 prepayment under a contract to repurchase and cancel shares of our common stock in a future period and net repayments under the line of credit of $1,615,000. Net proceeds from the issuance of common stock reflect gross ATM proceeds of $167.6 million, reduced by $2.2 million of cash offering costs paid during the quarter and an additional $3.1 million of offering costs incurred during the quarter remained accrued and unpaid as of March 31, 2026 and are reflected as a non-cash item in the supplemental disclosure of cash flow information.

During the quarter ended March 31, 2026, the Company had an unfunded capital commitment of approximately $7 million to Beast Industries, which was committed for a period of 60 days following the Company’s initial investment. While not a variable interest or structured entity, this commitment represents a contractual obligation that, if called, would have had an impact on liquidity. The applicable period of the commitment expired on May 9, 2026.

### Known Trends, Events, Uncertainties and Factors That May Affect Future Operations

Our results and liquidity may be materially affected by:

- Digital asset market volatility, including price, volume, and spreads for WLD and other tokens;
- Regulatory developments affecting custody, stablecoins, or exchange operations and their impact on access, withdrawals, or pricing;
- Custodian concentration and counterparty risk, including operational incidents, solvency, or cybersecurity;
- Capital markets conditions impacting our ability to raise additional equity via PIPE or ATM transactions;
- Interest rate levels influencing borrowing costs under the Forever 8 Facilities and customer demand for inventory financing; and
- Macro factors (consumer demand, e-commerce trends, geopolitics, inflation, and credit availability).

### Contractual Obligations and Commitments

The Company has no debt covenants that require certain financial information to be met. The following summarizes our material cash requirements as of March 31, 2026:

*Unfunded Capital Commitment.* As of March 31, 2026, we had an unfunded capital commitment of approximately $7 million to Beast Industries, which was able to be called within 60 days of our initial investment and expired on May 9, 2026.

*Consulting Fees.* Under the Amended and Restated DACA, we are obligated to pay a consulting fee equal to 1% per annum of assets under management. Based on current AUM levels, we expect cash consulting fees of approximately $2.5 million to $3.5 million over the next 12 months.

*Credit Facility Interest and Fees.* Based on current borrowing levels and interest rates ranging from 12% to 18%, we expect interest expense and commitment fees under our credit facilities of approximately $1.2 million to $1.5 million over the next 12 months.

### Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of the Company’s financial condition and results of operations is based on the Company’s combined financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

For information on the Company’s significant accounting policies please refer to Note 2 to the Company’s Financial Statements included in this Quarterly Report.

## Market risk

As filed, 171 characters.

We are a smaller reporting company and are not required to provide certain Item 305 disclosures. There have been no material changes from our year-end market risk profile.

## Controls and procedures

As filed, 2,805 characters.

### Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of such period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information that it is required to disclose in reports that the Company files with the SEC is recorded, processed, summarized and reported within the time periods specified by the Exchange Act rules and regulations due to the reasons set forth below.

As of December 31, 2025, management identified the following material weakness in our internal control over financial reporting: the Company was unable to provide a timely financial reporting package in connection with the year end audit. This was primarily the result of the Company’s limited accounting personnel. This also limits the extent to which the Company can segregate incompatible duties and has a lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected. There is a risk under the current circumstances that intentional or unintentional errors could occur and not be detected.

Management has concluded that the material weakness described above currently exists as of March 31, 2026. We continue to remediate the material weakness identified as of December 31, 2025, which persisted at March 31, 2026. During Q4 2025 and into 2026 we are: (i) augmenting accounting resources (including SEC reporting and technical accounting) to improve the timeliness and quality of period-end close; (ii) formalizing and documenting key controls over the financial close, including reconciliations, review controls, and segregation of duties; (iii) implementing enhanced IT-dependent manual controls to support completeness and accuracy of reports used in controls; and (iv) planned engagement of external advisors during the second half of 2026 to assist with design, implementation, and testing of internal controls.

### Changes in Internal Control over Financial Reporting

Other than (i) the remediation actions described above, there were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended March 31, 2026.

## Risk factors

As filed, 10,583 characters.

An investment in our securities involves certain risks. Before deciding to invest in our common stock, you should consider carefully the following discussion of risks and uncertainties affecting us and our securities, together with other information in this Quarterly Report. Our business, business prospects, financial condition or results of operations could be seriously harmed as a result of these risks. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial, also may materially and adversely affect our business, financial condition and results of operations. Please also read carefully the section above entitled “Cautionary Note Regarding Forward-Looking Statements.”

Other than as set forth below, there have been no material changes to the “Risk Factors” disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. The risk factors below supplement, and to the extent inconsistent supersede, the risk factors set forth in our Annual Report.

### Risks Related to Our Strategic Investments

***Our strategic investment portfolio is concentrated in a small number of privately held companies, and a decline in the value of, or total loss with respect to, any single investment could materially adversely affect our financial condition and results of operations.***

During the three months ended March 31, 2026, we deployed approximately $110.6 million of capital into strategic equity investments, including approximately $92.6 million in OpenAI and approximately $18.0 million in Beast Industries, in addition to our prior $1.0 million investment in Mythical Games. These three positions collectively represent a substantial portion of our non-digital-asset balance sheet, and we currently intend to continue to deploy material amounts of capital into similarly concentrated positions over time. We have not adopted formal diversification limits with respect to our strategic investments, and we may make additional concentrated investments in the future. Because our strategic investment portfolio is concentrated in a limited number of issuers, a decline in the value of, or a total loss with respect to, any single investment could have a material adverse effect on our financial condition, results of operations, and the market price of our common stock.

***Our strategic equity investments are highly illiquid, and we may be unable to sell, transfer, or otherwise monetize these investments when desired, or at all.***

Our strategic investments are in privately held companies whose securities are not currently traded on any public market. These investments are subject to substantial transfer restrictions, including rights of first refusal, co-sale rights, lock-up provisions, and consent requirements imposed by the issuer, its board of directors, or other equity holders. In certain cases, our economic interest is held indirectly through special purpose vehicles or similar pooled investment structures that impose additional transfer and redemption restrictions. As a result, we may be unable to liquidate our strategic investments on a timely basis, without significant cost, at the carrying value reflected in our financial statements, or at all. Even if a portfolio company conducts an initial public offering or is acquired, our ability to realize value may be delayed by contractual restrictions, during which time the value of our position could decline materially. The illiquidity of these investments may also limit our ability to access capital from these holdings to fund operations or meet other obligations.

***We account for our strategic investments under the measurement alternative permitted by ASC 321, which may result in carrying values that do not reflect current fair value and may expose us to material impairment charges.***

We account for our strategic equity investments in privately held companies that do not have readily determinable fair values under the measurement alternative permitted by ASC 321, Investments — Equity Securities. Under this method, we initially record investments at cost and subsequently adjust the carrying value only upon observable price changes in orderly transactions for identical or similar securities of the same issuer, or upon recognition of an impairment. Between observable transactions, the carrying value of an investment may not reflect its current fair value, which could be materially higher or lower than the amount reported on our balance sheet. If we identify an indicator of impairment, we are required to estimate fair value and, if the estimated fair value is less than the carrying value, recognize an impairment charge equal to the difference. Indicators of impairment may include a significant deterioration in a portfolio company’s earnings performance, financial condition, or business prospects; a significant adverse change in the regulatory, economic, or technological environment; a bona fide offer to purchase or sell the investment at an amount less than the carrying value; or factors raising significant concerns about the issuer’s ability to continue as a going concern. The recognition of an impairment charge, or a series of impairment charges, could have a material adverse effect on our results of operations in the period recognized. The absence of frequent observable transactions for our portfolio company securities may also delay the recognition of declines in value, resulting in carrying values that overstate the actual realizable value of these investments.

***As a minority investor, we have limited information rights and little or no governance control with respect to the issuers of our strategic investments, and we depend on the management teams of our portfolio companies.***

As a minority investor in privately held companies, we generally do not have voting board representation or substantive governance influence with respect to the companies underlying our strategic investments. Our information rights are typically limited to those provided by the issuer’s organizational documents, our investment agreements, or applicable law, and may not include audited financial statements, detailed operating metrics, or timely updates on material developments at the portfolio company. We rely on the management teams of our portfolio companies to operate those companies, make strategic decisions, manage capital, and report financial and operating results to investors. We have very little to no ability to direct or influence operating decisions at these companies. Any management failure, strategic misstep, governance failure, fraud, or other adverse development at a portfolio company could result in a material decline in or loss of our investment, and we may not become aware of such developments on a timely basis.

***Certain of our strategic investments are held through special purpose vehicles or similar pooled investment structures, which subject us to additional risks beyond those of the underlying portfolio company.***

In certain cases, our economic exposure to a portfolio company is held indirectly through a special purpose vehicle, fund-of-one structure, or similar pooled investment vehicle managed by a third party rather than through direct equity ownership of the portfolio company. These structures may subject us to additional risks not present in a direct equity investment, including management, administrative, and performance fees payable to the sponsor or general partner, which reduce our net returns; limited or no governance rights with respect to the investment vehicle itself; restrictions on transfer or redemption of our interests in the vehicle; the risk that the vehicle’s sponsor or manager fails to perform its obligations, becomes insolvent, or engages in conduct adverse to our interests; reliance on the vehicle for information about the underlying portfolio company, which may be less timely or complete than direct issuer disclosures; and potential adverse tax consequences. The failure of an investment vehicle, or adverse conduct by its sponsor or manager, could result in a loss of all or substantially all of our investment, even if the underlying portfolio company performs well. Where our economic exposure to a portfolio company is held through a multi-tier investment structure, information about the underlying portfolio company may flow through multiple intermediaries before reaching us, which may further delay or limit our ability to evaluate the performance of the investment.

***A substantial portion of our balance sheet is invested in illiquid digital assets and strategic equity investments, which may limit our ability to fund operations or respond to adverse developments without additional financing.***

A substantial portion of our total assets consisted of digital asset holdings and illiquid strategic equity investments, while our recurring operating cash flows have been negative. Our ability to fund operations, repay indebtedness, or otherwise meet our obligations depends in part on our ability to monetize digital assets at acceptable prices, which is subject to market volatility; realize value from our strategic equity investments, which are illiquid and may not be saleable when needed; and access additional financing through our at-the-market equity offering program or other capital markets transactions. The availability and cost of capital markets financing depend significantly on prevailing market conditions, including the trading price and volume of our common stock and broader equity capital markets sentiment, and such financing may not be available on favorable terms or at all. A decline in the market price of our common stock could reduce the amount of capital we can raise on favorable terms through our at-the-market program and sales of our common stock at lower per share prices would result in greater rates of dilution to existing stockholders. If we are unable to monetize portions of our digital assets, realize value from strategic equity investments, or access capital markets on acceptable terms, we may be required to delay or otherwise curtail planned investment activity, reduce operating expenditures, sell assets at unfavorable prices, or on unfavorable terms, or pursue alternative financing on adverse terms, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Filed May 15, 2026.
Source: SEC EDGAR, the filing index for accession 0001493152-26-023890. Last ingested by Listed: Oct 29, 2026, 08:46 ET. No prices; not investment advice.