NASDAQ Grants Eightco’s Request for Continued Listing on The Nasdaq Capital Market

Rhea-AI Summary

Eightco Holdings (NASDAQ: OCTO) has secured approval from a Nasdaq Hearings Panel for continued listing on the Nasdaq Capital Market. To maintain this listing, Eightco must meet specific conditions by August 23, 2024, including achieving a minimum bid price of $1.00 per share for at least ten consecutive trading sessions. To comply, Eightco has filed a proxy statement seeking shareholder approval for a 1-for-5 reverse stock split. Recent financial improvements have bolstered shareholder equity by over $23 million, achieved through various debt cancellations and conversions. As of June 28, 2024, Eightco's market capitalization stands at approximately $4.0 million with 8.8 million shares outstanding. Management believes the market cap may not fully reflect the company's recent progress.

Positive

• Secured Nasdaq approval for continued listing, contingent on meeting conditions by August 23, 2024.
• Enhanced shareholder equity by over $23 million through debt cancellations and conversions.
• Filed for a 1-for-5 reverse stock split to meet Nasdaq's minimum bid price requirement.

Negative

• Needs to maintain a minimum bid price of $1.00 per share for ten consecutive trading sessions to remain listed on Nasdaq.

Insights

Financial Analyst

Eightco Holdings Inc. has taken decisive measures to address short-term financial challenges, notably by repaying restrictive promissory notes and eliminating significant amounts of warrants and liabilities. These actions have bolstered the company's shareholder equity by $23 million, which is substantial for a company with a current market capitalization of $4.0 million. The planned reverse stock split at a ratio of 1-for-5 is intended to meet Nasdaq's minimum bid price requirement of $1.00 per share, which is necessary for continued listing. While reverse stock splits can sometimes be seen as a red flag, indicating underlying financial difficulties, it also presents an opportunity for the company to maintain its listing status and potentially attract new investment.

From a financial perspective, investors should be aware of the potential dilution effects and monitor the company's ability to sustain higher stock prices post-reverse split. The long-term impact will largely depend on Eightco’s ability to maintain operational efficiencies and continue strengthening its financial health.

Market Research Analyst

The steps Eightco Holdings Inc. is taking to improve its financial condition demonstrates a strategic focus on enhancing shareholder value. The company's efforts to cancel various liabilities, including those to its former parent company Vinco Ventures, Inc., signal a significant effort to clean up its balance sheet. This could make Eightco more attractive to institutional investors who often seek companies with stronger financial foundations.

However, the reliance on a reverse stock split poses certain risks. Market perception of such splits can be negative, as they are often associated with companies struggling to maintain stock price levels. It will be important for Eightco to communicate its progress effectively and demonstrate consistent operational improvements to bolster investor confidence.

As an investor, understanding the balance between the immediate need to meet listing requirements and the longer-term vision for financial stability and growth is essential. Monitoring how the market responds to the reverse split and subsequent trading sessions will be important for gauging future stock performance.

Continued listing is subject to meeting certain conditions by August 23, 2024 including maintaining a minimum bid price of $1.00 or more for a minimum of ten consecutive trading sessions

Easton, PA, July 01, 2024 (GLOBE NEWSWIRE) -- Eightco Holdings Inc. (NASDAQ: OCTO) (the “Company” or “Eightco”) is pleased to announce that a Hearings Panel of the Nasdaq Stock Market has granted the Company’s request for continued listing on The Nasdaq Capital Market, subject to the Company meeting certain conditions by August 23, 2024. These conditions include requiring the closing bid price of the Company’s common stock to equal or exceed $1.00 per share for a minimum of ten (10) consecutive trading sessions. In order to meet the conditions required by the Hearings Panel, the Company has filed a preliminary proxy statement with the Securities and Exchange Commission seeking shareholder approval to effect a reverse stock split of all of the outstanding shares of the Company’s common stock at a ratio of 1-for-5.

As previously announced, the Company has implemented significant steps during the first half of 2024 to strengthen its financial position, primarily addressing issues related to the Company’s legacy business. These steps have improved the Company’s shareholder equity by over $23 million through the following:

• Repaying restrictive promissory notes and eliminating 5.8 million warrants related to such notes
• Cancelling $3.0 million in interest obligations
• Converting $1.1 million of interest obligations into 1.4 million shares of the Company’s common stock, of which 87.6% went to the founding members of the Company’s subsidiary, Forever 8 Fund LLC (“Forever 8”)
• Cancelling earnout consideration owed to the former members of Forever 8 from the Company’s acquisition of Forever 8, which had a fair value of $6.1 million
• Cancelling $5.4 million in other outstanding promissory notes
• Cancelling a $6.5 million liability to Vinco Ventures, Inc., the Company’s former parent company
• Cancelling a $0.93 million lease liability
  

The Company currently has approximately 8.8 million shares outstanding, resulting in a market capitalization of approximately $4.0 million based on the closing price of the Company’s common stock on June 28, 2024. Management believes the current market capitalization may not fully reflect the Company's substantial progress in enhancing shareholder equity and operational efficiencies described above.

About Eightco

Eightco (NASDAQ: OCTO) is committed to growth of its subsidiaries, made up of Forever 8 Fund LLC, an inventory capital and management platform for e-commerce sellers, and Ferguson Containers, Inc., a provider of complete manufacturing and logistical solutions for product and packaging needs, through strategic management and investment. In addition, the Company is actively seeking new opportunities to add to its portfolio of technology solutions focused on the e-commerce ecosystem through strategic acquisitions. Through a combination of innovative strategies and focused execution, Eightco aims to create significant value and growth for its portfolio companies and stockholders.

For additional information, please visit www.8co.holdings

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact could be deemed forward looking. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “expand,” “advance,” “develop” “believes,” “guidance,” “target,” “may,” “remain,” “project,” “outlook,” “intend,” “estimate,” “could,” “should,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: Eightco’s ability to regain and maintain compliance with the Nasdaq’s continued listing requirements; unexpected costs, charges or expenses that reduce Eightco’s capital resources; Eightco’s inability to raise adequate capital to fund its business; the inability to innovate and attract users for Eightco’s and its subsidiaries’ products; future legislation and rulemaking negatively impacting digital assets; and shifting public and governmental positions on digital asset mining activity. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Eightco’s actual results to differ from those contained in forward-looking statements, see Eightco’s filings with the Securities and Exchange Commission (the “SEC”), including in its Annual Report on Form 10-K filed with the SEC on April 1, 2024, as amended. All information in this press release is as of the date of the release, and Eightco undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

For further information, please contact:
Investor Relations
investors@8co.holdings

FAQ

What conditions must Eightco Holdings (OCTO) meet to stay listed on Nasdaq?

Eightco must ensure its common stock trades at a minimum bid price of $1.00 per share for ten consecutive trading sessions by August 23, 2024.

How is Eightco Holdings (OCTO) planning to meet Nasdaq's listing requirements?

Eightco has filed a proxy statement to seek shareholder approval for a 1-for-5 reverse stock split to meet Nasdaq's minimum bid price requirement.

What financial improvements has Eightco Holdings (OCTO) made recently?

Eightco has improved shareholder equity by over $23 million through debt repayments, cancellations, and conversions, including canceling $3.0 million in interest obligations and converting $1.1 million of interest into shares.

What is the current market capitalization of Eightco Holdings (OCTO)?

As of June 28, 2024, Eightco's market capitalization is approximately $4.0 million with 8.8 million shares outstanding.

Why does Eightco Holdings (OCTO) believe its market cap is undervalued?

Management believes that the current market capitalization may not fully reflect the company's substantial progress in enhancing shareholder equity and operational efficiencies.