Eightco Holdings, one of the largest corporate holders of Worldcoin's WLD token, recorded an unrealized loss of US$ 207.6 million on its position in the cryptocurrency as of June 30, while the customer responsible for about 99% of the operating revenue of its subsidiary Forever 8 faces financial deterioration, the company said in a quarterly balance sheet released on Friday (7).
In the balance sheet, the company reported 283.45 million WLD at a cost of US$ 322.7 million and a fair value of US$ 115.1 million. The token represented 50.5% of the US$ 228.0 million digital asset portfolio. Eightco did not record operating revenue from the portfolio in the period.
In an August 6 statement, Eightco said its WLD balance rose to 301.97 million tokens on August 5. At the price of US$ 0.31 on August 8, the amount held on June 30 would be worth about US$ 87.9 million, approximately US$ 234.8 million below book cost. The company did not disclose the cost or the source of funds for the additional 18.52 million tokens, so the current cost basis cannot be determined.
Customer problem
Forever 8, Eightco's operating subsidiary, said the financial condition of its main customer worsened and that the customer disposed of company-financed inventory without authorization. Eightco suspended the processing of new orders and stopped buying inventory for that relationship.
The customer crisis generated a US$ 7.8 million credit loss provision, including US$ 2.6 million against accounts receivable and US$ 5.2 million fully reserved due to the disposal of the inventory. Management warned that Forever 8's revenue may be materially reduced or eliminated.
Liquidity and share issuance
The balance sheet does not indicate an immediate need to sell WLD or issue new shares. Eightco reported US$ 148.8 million in near-immediate liquidity at the end of the quarter: US$ 11.0 million in cash, US$ 50.9 million in short-term government securities and money market funds, and US$ 86.9 million in stablecoins. Cash consumed by operations in the first half was US$ 9.7 million, and management said there is no substantial doubt about the ability to continue operating for at least 12 months.
However, the company has already relied heavily on issuing shares. In the first half, it issued 214,998,030 new shares, with net proceeds of about US$ 216.0 million. Total shares outstanding grew 109%, from 205.6 million to 429.8 million. Eightco also received a notice of bid price deficiency from Nasdaq on August 5, with a deadline of February 1, 2027, to regain compliance.
The balance sheet does not allow a reliable estimate of how much additional dilution or asset sales Eightco may need. An accounting loss does not consume cash, and the company has a considerable liquidity cushion. The risk increases if the customer's failure generates more operating losses while the company continues buying tokens, or if the weak share price limits new issuances. This tension in capital allocation, more than the unrealized loss itself, is the test investors face regarding Eightco's WLD treasury.
