{"url_path":"/sec/orbs/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1892492/0001493152-26-023890-index.html","accession_number":"0001493152-26-023890","cik":"0001892492","ticker":"ORBS","issuer_name":"Eightco Holdings Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1892492/0001493152-26-023890-index.html","primary_entity_key":"0001892492","primary_entity_name":"Eightco Holdings Inc."},"word_count":1589,"has_tables":true,"body_markdown":"**ITEM 1A. RISK FACTORS**\n\n \n\nAn investment in our securities involves certain risks.\nBefore deciding to invest in our common stock, you should consider carefully the following discussion of risks and uncertainties affecting\nus and our securities, together with other information in this Quarterly Report. Our business, business prospects, financial condition\nor results of operations could be seriously harmed as a result of these risks. This could cause the trading price of our common stock\nto decline, resulting in a loss of all or part of your investment. Additional risks and uncertainties not presently known to us or that\nwe currently deem immaterial, also may materially and adversely affect our business, financial condition and results of operations. Please\nalso read carefully the section above entitled “Cautionary Note Regarding Forward-Looking Statements.”\n\n \n\nOther\nthan as set forth below, there have been no material changes to the “Risk Factors” disclosed in Part I, Item 1A of our\nAnnual Report on Form 10-K for the year ended December 31, 2025. The risk factors below supplement, and to the extent inconsistent\nsupersede, the risk factors set forth in our Annual Report.\n\n \n\n**Risks Related to Our Strategic Investments**\n\n** **\n\n**Our strategic investment portfolio is concentrated\nin a small number of privately held companies, and a decline in the value of, or total loss with respect to, any single investment could\nmaterially adversely affect our financial condition and results of operations.**\n\n** **\n\nDuring the three months\nended March 31, 2026, we deployed approximately $110.6 million of capital into strategic equity investments, including approximately $92.6\nmillion in OpenAI and approximately $18.0 million in Beast Industries, in addition to our prior $1.0 million investment in Mythical Games.\nThese three positions collectively represent a substantial portion of our non-digital-asset balance\nsheet, 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\nconcentrated investments in the future. Because\nour strategic investment portfolio is concentrated in a limited number of issuers, a decline in the value of, or a total loss with respect\nto, any single investment could have a material adverse effect on our financial condition, results of operations, and the market price\nof our common stock.\n\n \n\n**Our strategic equity investments are highly\nilliquid, and we may be unable to sell, transfer, or otherwise monetize these investments when desired, or at all.**\n\n** **\n\nOur\nstrategic investments are in privately held companies whose securities are not currently traded on any public market. These\ninvestments are subject to substantial transfer restrictions, including rights of first refusal, co-sale rights, lock-up provisions,\nand consent requirements imposed by the issuer, its board of directors, or other equity holders. In certain cases, our economic\ninterest is held indirectly through special purpose vehicles or similar pooled investment structures that impose additional transfer\nand redemption restrictions. As a result, we may be\nunable to liquidate our strategic investments on a timely basis, without significant cost, at the carrying value reflected in our\nfinancial statements, or at all. Even if a portfolio company conducts an initial public offering or is acquired, our ability to\nrealize value may be delayed by contractual restrictions, during which time the value\nof our position could decline materially. The illiquidity of these investments may also limit our ability to access capital from\nthese holdings to fund operations or meet other obligations.\n\n \n\n35\n\n \n\n \n\n**We account for our strategic investments under\nthe measurement alternative permitted by ASC 321, which may result in carrying values that do not reflect current fair value and may expose\nus to material impairment charges.**\n\n** **\n\nWe account for our strategic\nequity investments in privately held companies that do not have readily determinable fair values under the measurement alternative permitted\nby ASC 321, Investments — Equity Securities. Under this method, we initially record investments at cost and subsequently adjust\nthe carrying value only upon observable price changes in orderly transactions for identical or similar securities of the same issuer,\nor upon recognition of an impairment. Between observable transactions, the carrying value of an investment\nmay not reflect its current fair value, which could be materially higher or lower than the amount reported on our balance sheet. If we\nidentify an indicator of impairment, we are required to estimate fair value and, if the estimated fair value is less than the carrying\nvalue, recognize an impairment charge equal to the difference. Indicators of impairment may include a significant deterioration in a portfolio\ncompany’s earnings performance, financial condition, or business prospects; a significant adverse change in the regulatory, economic,\nor technological environment; a bona fide offer to purchase or sell the investment at an amount less than the carrying value; or factors\nraising significant concerns about the issuer’s ability to continue as a going concern. The recognition of an impairment charge,\nor a series of impairment charges, could have a material adverse effect on our results of operations in the period recognized. The absence\nof frequent observable transactions for our portfolio company securities may also delay the recognition of declines in value, resulting\nin carrying values that overstate the actual realizable value of these investments.\n\n \n\n**As\na minority investor, we have limited information rights and little or no governance control with respect to the issuers of our\nstrategic investments, and we depend on the management teams of our portfolio companies.**\n\n** **\n\nAs\na minority investor in privately held companies, we generally do not have voting board representation or substantive governance\ninfluence with respect to the companies underlying our strategic investments. Our information rights are typically limited to those\nprovided by the issuer’s organizational documents, our investment agreements, or applicable law, and may not include audited\nfinancial statements, detailed operating metrics, or timely updates on material developments at the portfolio company. We\nrely on the management teams of our portfolio companies to operate those companies, make strategic decisions, manage capital, and\nreport financial and operating results to investors. We have very little to no ability to direct or influence operating decisions at\nthese companies. Any management failure, strategic misstep, governance failure, fraud, or other adverse development at a portfolio\ncompany could result in a material decline in or loss of our investment, and we may not become aware of such developments on a\ntimely basis.\n\n \n\n**Certain of our strategic investments are held\nthrough special purpose vehicles or similar pooled investment structures, which subject us to additional risks beyond those of the underlying\nportfolio company.**\n\n** **\n\nIn certain cases, our economic exposure to a portfolio\ncompany is held indirectly through a special purpose vehicle, fund-of-one structure, or similar pooled investment vehicle managed by a\nthird party rather than through direct equity ownership of the portfolio company. These structures may subject us to additional risks\nnot present in a direct equity investment, including management, administrative, and performance fees payable to the sponsor or general\npartner, which reduce our net returns; limited or no governance rights with respect to the investment vehicle itself; restrictions on\ntransfer or redemption of our interests in the vehicle; the risk that the vehicle’s sponsor or manager fails to perform its obligations,\nbecomes insolvent, or engages in conduct adverse to our interests; reliance on the vehicle for information about the underlying portfolio\ncompany, which may be less timely or complete than direct issuer disclosures; and potential adverse tax consequences. The failure of an\ninvestment vehicle, or adverse conduct by its sponsor or manager, could result in a loss of all or substantially all of our investment,\neven if the underlying portfolio company performs well. Where our economic exposure to a portfolio company is held through a multi-tier investment structure, information\nabout the underlying portfolio company may flow through multiple intermediaries before reaching us, which may further delay or limit our\nability to evaluate the performance of the investment.\n\n \n\n**A substantial portion of our balance sheet is\ninvested in illiquid digital assets and strategic equity investments, which may limit our ability to fund operations or respond to adverse\ndevelopments without additional financing.**\n\n \n\nA substantial\nportion of our total assets consisted of digital asset holdings and illiquid strategic equity investments, while our recurring\noperating cash flows have been negative. Our ability to fund operations, repay indebtedness, or otherwise meet our obligations\ndepends in part on our ability to monetize digital assets at acceptable prices, which is subject to market volatility; realize value\nfrom our strategic equity investments, which are illiquid and may not be saleable when needed; and access additional financing\nthrough our at-the-market equity offering program or other capital markets transactions. The availability and cost of capital\nmarkets financing depend significantly on prevailing market conditions, including the trading price and volume of our common stock\nand broader equity capital markets sentiment, and such financing may not be available on favorable terms or at all. A decline in the\nmarket price of our common stock could reduce the amount of capital we can raise on favorable terms through our at-the-market\nprogram and sales of our common stock at lower per share prices would result in greater rates of dilution to existing stockholders.\nIf we are unable to monetize portions of our digital assets, realize value from strategic equity investments, or access capital\nmarkets on acceptable terms, we may be required to delay or otherwise curtail planned investment activity, reduce operating\nexpenditures, sell assets at unfavorable prices, or on unfavorable terms, or pursue alternative financing on adverse terms, any of\nwhich could have a material adverse effect on our business, financial condition, and results of operations.\n\n \n\n36"}