SCHEDULE 13D: Eightco Holdings CEO Paul Vassilakos Discloses 10.7% Beneficial Ownership Stake

Paul Vassilakos, Executive Chairman and CEO of Eightco Holdings Inc., has filed a Schedule 13D disclosing a 10.7% beneficial ownership stake in the company, primarily through the conversion of promissory notes and shares received for salary.

Summary

• Paul Vassilakos, the Executive Chairman and Chief Executive Officer of Eightco Holdings Inc., beneficially owns 313,296 shares of the Issuer's Common Stock, representing approximately 10.7% of the outstanding shares.
• His ownership stems largely from the acquisition of Forever 8 Fund LLC by Eightco Holdings Inc. on October 1, 2022, where Mr. Vassilakos, as a seller, received convertible promissory notes.
• Mr. Vassilakos received promissory notes totaling $10,192,008 as part of the Forever 8 acquisition consideration.
• On December 29, 2023, Mr. Vassilakos was issued 9,091 shares of Common Stock in lieu of owed salary from Forever 8.
• On March 17, 2024, Mr. Vassilakos was appointed Executive Chairman and CEO, with an annual base salary of $300,000 and eligibility for restricted stock units.
• On March 27, 2024, the Issuer issued 279,993 shares to satisfy a portion of promissory notes, 50,432 shares for warrant cash settlement, and 24,189 shares to terminate earnout obligations, with Mr. Vassilakos receiving 121,792 of these shares.
• On December 12, 2024, the Promissory Notes were amended, leading to the conversion of approximately $1.6 million in accrued interest into 485,381 shares of Common Stock, of which Mr. Vassilakos received 182,412 shares, representing $1,567,779 of interest owed to him.
• The beneficial ownership percentage is calculated based on 2,926,744 shares of common stock outstanding.

Sentiment

Score: 7

Explanation: The document primarily provides factual disclosure of beneficial ownership and past transactions. The significant insider stake by the CEO is generally a positive signal for investor alignment, but the conversions also imply dilution. Overall, it's a neutral-to-positive disclosure of a regulatory requirement.

Positives

• The CEO, Paul Vassilakos, holds a significant 10.7% beneficial ownership stake, indicating strong alignment of management interests with shareholder interests.
• Mr. Vassilakos's increased equity stake through note and interest conversions demonstrates his commitment to the company's long-term success.
• His appointment as Executive Chairman and CEO, coupled with a substantial equity position, suggests stable leadership and a vested interest in corporate performance.

Negatives

• The conversion of promissory notes and accrued interest into common stock has resulted in the issuance of new shares, which can lead to dilution for existing shareholders.
• A significant portion of the CEO's compensation and past acquisition consideration has been settled in equity, potentially increasing the share count over time.

Risks

• Mr. Vassilakos, as a significant shareholder and executive, may have influence over corporate activities such as the acquisition or disposition of securities, extraordinary corporate transactions (mergers, reorganizations, liquidations), sale of material assets, changes in the board or management, material changes in capitalization or dividend policy, changes in business or corporate structure, or actions that could impede acquisition of control.
• The potential for future conversions of preferred units (not included in current beneficial ownership) could lead to further dilution.

Future Outlook

Mr. Vassilakos's stated purpose for the transaction is investment. As Executive Chairman and CEO, he may influence future corporate activities including acquisitions, dispositions, extraordinary transactions, changes in management or capitalization, and other strategic decisions. He retains the right to change his investment intent and may acquire or dispose of additional shares in the future.

Management Comments

• "Investment Purposes." (Regarding Mr. Vassilakos's purpose of transaction)
• "Mr. Vassilakos currently serves as the Executive Chairman and Chief Executive Officer of the Issuer. As a director and officer of the Issuer, Mr. Vassilakos may have influence over the corporate activities of the Issuer."

Industry Context

This filing highlights a significant insider ownership stake in Eightco Holdings Inc. by its Executive Chairman and CEO, Paul Vassilakos. Such disclosures are common in the financial industry and provide transparency regarding the alignment of key management with shareholder interests. While not directly related to broader industry trends, a substantial insider stake can signal confidence in the company's future within its sector.

Comparison to Industry Standards

• This document is a Schedule 13D filing, which is a standard regulatory disclosure for individuals or groups acquiring more than 5% beneficial ownership of a company's stock. It is not directly comparable to industry-specific financial performance benchmarks or project results.
• The level of insider ownership (10.7%) by a CEO is generally considered a strong indicator of management's vested interest, often viewed positively by investors compared to companies with minimal insider holdings.

Management Changes

Corporate Governance

Related Party Transactions

• The Issuer's acquisition of Forever 8 Fund LLC involved Mr. Vassilakos as one of the sellers, from whom the Issuer acquired membership interests.
• Mr. Vassilakos received convertible promissory notes as part of the consideration for the Forever 8 acquisition.
• Mr. Vassilakos was issued 9,091 shares of Common Stock in lieu of salary owed by Forever 8.
• Mr. Vassilakos received 121,792 shares of Common Stock from the Issuer's issuance to satisfy promissory notes, warrants, and terminate earnout obligations.
• Mr. Vassilakos received 182,412 shares of Common Stock from the conversion of $1,567,779 of accrued interest on his Promissory Notes.

Stakeholder Impact

• Shareholders: Increased alignment with management due to the CEO's significant equity stake, but also potential for dilution from the conversion of promissory notes and interest into common stock.
• Employees: The CEO's compensation structure includes a base salary and eligibility for restricted stock units, aligning his incentives with company performance.
• Creditors (Promissory Note Holders): The conversion of promissory notes and accrued interest into equity reduces the company's debt obligations to these holders, transforming them into equity holders.

Next Steps

• Mr. Vassilakos retains the right to change his investment intent regarding Eightco Holdings Inc. securities.
• He may, from time to time, acquire additional shares of Common Stock or other securities of the Company.
• He may also sell or otherwise dispose of (or enter into plans or arrangements to sell or otherwise dispose of) all or part of his beneficially owned shares or other securities.

Key Dates

Recommendation

Keywords

Eightco Holdings Inc., Paul Vassilakos, Schedule 13D, Beneficial Ownership, Common Stock, CEO, Executive Chairman, Forever 8 Fund LLC, Promissory Notes, Equity Conversion, Insider Ownership, Corporate Governance