Onfolio Holdings, Inc 10-K for FY2025
Onfolio Holdings, Inc (ONFO)
About this 10-K
Onfolio Holdings, Inc filed this 10-K on March 31, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $10.73M
- up 36.5% from $7.86M a year earlier
- Net loss
- $2.59M
- compared with a net loss of $1.77M a year earlier
- Diluted EPS
- -$0.58
- compared with -$0.41 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
|
|
For the fiscal year ended | |
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ________________________to________________________
Commission file number:
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
| ||
(Address of principal executive offices) |
| (Zip Code) |
(Registrant’s Telephone Number, including Area Code): (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered | Trading Symbol(s) | Name of each exchange on which registered |
Securities registered pursuant to section 12(g) of the Act: Series A Preferred Stock
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $
As of March 31, 2026, there were
Table of Contents
| 2 |
| Table of Contents |
Forward-Looking Statements
This Report on Form 10-K contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. You should not place undue reliance on these forward-looking statements.
Examples of forward-looking statements include, but are not limited to:
| ● | the anticipated timing of the development of future products; |
| ● | projections of costs, revenue, earnings, capital structure and other financial items; |
| ● | statements of our plans and objectives; |
| ● | statements regarding the capabilities of our business operations; |
| ● | statements of expected future economic performance; |
| ● | statements regarding competition in our market; and |
| ● | assumptions underlying statements regarding us or our business. |
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
| ●
| our ability to manage our current and projected financial position and estimated cash burn rate, including our estimates regarding expenses, future revenues and capital requirements, and ultimately our ability to continue as a going concern; |
| ●
| our ability to raise additional capital or additional funding to further develop and expand our business to meet our long-term business objectives. We have limited revenues and we cannot predict when or if we will achieve significant revenues and sustained profitability; |
| ● | our ability to achieve significant revenues and sustained profitability; |
| ● | impairment of goodwill and long-lived assets |
| ● | changes in customer demand; |
| ● | our ability to develop our brands cost-effectively, to attract new customers and retain customers on a cost-effective basis; |
| ● | our ability to compete in the markets in which our online businesses participate; |
| ● | our ability to make strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; |
| ● | our ability to continue to successfully manage our online businesses on a combined basis; |
| ● | security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; |
| ● | developments and changes in laws and regulations, including increased regulation of our industry through legislative action and revised rules and standards; |
| ● | our market position and market conditions, including the effects of government policies, tariffs and trade barriers; |
| ● | the occurrence of war and or other hostilities, political instability or catastrophic events; |
| ● | natural events such as severe weather, fires, floods and earthquakes, or man-made or other disruptions of our operating systems, structures or equipment; |
| ● | risks related to, and the costs associated with, environmental, social and governance (ESG) matters, including the scope and pace of related rulemaking activity; |
| ● | other risks to which our Company is subject; |
| ● | other factors beyond the Company’s control; and |
| ● | other factors and risks described under “Risk Factors” herein and in any of the Company’s subsequent reports filed with the SEC and available on its website at www.sec.gov. |
Any forward-looking statement made by us in this Report on Form 10-K is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
| 3 |
| Table of Contents |
PART I
Item 1. Business.
Company Overview
Onfolio Holdings Inc. was incorporated on July 20, 2020 under the laws of Delaware to acquire and develop high-growth and profitable online businesses. Unless the context otherwise requires, all references to “our Company,” “we,” “our” or “us” and other similar terms means Onfolio Holdings Inc., a Delaware corporation, and our wholly owned subsidiaries.
We acquire controlling interests in and actively manage small online businesses that we believe (i) operate in sectors with long-term growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence and (iv) can be managed by our existing team or have strong management teams largely in place. Through the acquisition and growth of a diversified group of online businesses with these characteristics, we believe we offer investors in our shares an opportunity to diversify their own portfolio risk.
Our long-term goal is to build a world-class holding company that acquires, operates, and scales profitable online businesses. We aim to do this through operational excellence, smart capital deployment, strong leadership and infrastructure, and the maintenance of an innovator and small business owner’s mindset.
Our ideal acquisition candidate has the following characteristics:
| ● | Proven customer acquisition track record ; |
| ● | A product, physical or digital with satisfied customers and brand equity; |
| ● | Upwards growth trajectory; |
| ● | Growing industry or sector; |
| ● | Attractive purchase price; |
| ● | Under-utilized marketing assets or channels; |
| ● | Passionate, high-value audience or customer base; |
| ● | Attractive profit margin and cashflow; and |
| ● | Diversified traffic and revenue sources. |
We currently operate in the following business models: B2C eCommerce, B2B SEO and marketing services as well as B2B digital products. We anticipate a combination of continuous expansion of these verticals and increasing our share within them. Our business model is not based around success in a particular “niche,” but rather focusing on certain verticals and mediums where online marketing has a key part to play (either as a means of growth for the businesses themselves, or as the service the businesses provide).
Market Opportunity
We acquire controlling interests in and actively manage small online businesses. We characterize small online businesses as those that generate annual cash flows of up to $5 million per year. We believe that the acquisition market for these online businesses is highly fragmented and often provides opportunities to purchase at attractive prices and achieve positive outcomes for our shareholders. We believe this is driven by the following factors:
| ● | third-party financing for these acquisitions is often less available or terms are less favorable for the borrower; |
| 4 |
| Table of Contents |
| ● | sellers of these online businesses frequently consider non-economic factors, such as legacy or the effect of the sale on their employees; |
| ● | these online businesses are more likely to be sold outside of an auction process or as part of a limited process; |
| ● | “add-on” acquisitions can often be completed at attractive multiples of cash flow |
| ● | many would-be buyers of these online businesses are restricted by their inability to operate these online businesses; and |
| ● | the existence of a sweet spot where online businesses are too big for small/individual buyers and too small for other institutional buyers. We desire to be among the best resourced and most experienced buyers in this acquisition sector. |
Competitive Strengths
We believe that the following competitive strengths contribute to our success and distinguish us from our competitors:
| ● | our senior management team has approximately 40 years of combined experience in Internet connected businesses. We believe that we have assembled a senior management team with highly complementary skills and experiences in the industry, accounting, finance, and acquisitions; |
| ● | our team is decentralized and cross border, which enables us to identify, recruit and retain high quality talent wherever they reside; |
| ● | many buyers focus on one vertical or niche, which limits their opportunity and concentrates their risk. We operate in a wider industry with competence in multiple models; |
| ● | we believe our disciplined approach to our target market provides opportunities to methodically purchase attractive online businesses at values that are accretive to our shareholders; |
| ● | we believe our management team’s strong relationships with industry executives, accountants, attorneys, business brokers, commercial and investment bankers, and other potential sources of acquisition opportunities offer us substantial opportunities to assess small online businesses available for acquisition; |
| ● | we believe our financial structure allows us to acquire online businesses efficiently with little or no third-party financing contingencies and, following acquisition, to provide our subsidiaries with access to growth capital, without being dependent on third-party transaction financing; |
| ● | it has been our experience that our ability to acquire online businesses without the cumbersome delays and conditions typical of third-party transactional financing is appealing to sellers of online businesses who are interested in confidentiality and certainty to close; |
| ● | we believe that as a public company, we could be considered a preferred buyer of these online businesses, due to the above factors being added to the integrity that a public company brings; and |
| ● | we believe that private company operators looking to sell their online businesses may consider us an attractive purchaser because of our ability to provide ongoing strategic and financial support for their website. |
Strategy
In seeking to maximize shareholder value, we focus on finding online businesses with under-utilized marketing assets, strong growth, and areas of operational improvements. We then accelerate what is working and fix what is not.
Acquisition Strategy
Our strategy to grow our business involves the acquisition of online businesses that we expect to both complement existing verticals, existing online businesses, and allow us to add new verticals. We are experienced in digital marketing and believe the key to growing online businesses is the leverage of audiences. We believe that attractive opportunities to make such acquisitions will continue to present themselves as a result of the abundance of selling founders with a limited skillset or narrow focus. This provides us with an opportunity for optimization and growth in the average small online businesses that is for sale. We benefit from our management team’s ability to identify diverse acquisition opportunities in a variety of industries. In addition, we rely upon our management team’s experience and expertise in researching and valuing prospective target online businesses, as well as negotiating the ultimate acquisition of such target website.
| 5 |
| Table of Contents |
We believe there are opportunities to acquire “distressed”, albeit profitable, online businesses, or where the sellers have not optimized the business to the fullest. The opportunity (both short and long term) is our ability to find online businesses where there are leverage points and growth opportunities that the current owners have not fully utilized. Historically, there have been ample of these for sale within our target price zone, which provides us with numerous opportunities to buy high quality business at reasonable prices. We use a series of quantitative, qualitative, financial, and legal criteria by which we evaluate each potential acquisition. We plan to acquire businesses with an income focus, and our target is to acquire businesses generating income of 20% to 30% internal rate of return, although there can be no guarantee that we will find such businesses and achieve this target. Among the factors considered are: (1) the business track record of revenue and earnings; (2) the type of business; (3) the experience and skill of the active management team of the business; (4) our assessment of the longevity and staying power of the underlying business; and (5) the potential for revenue growth and capital appreciation.
Additionally, as our portfolio has grown, we are becoming more strategic with our acquisition targets and seek acquisitions where 1+1=3. This means that such an acquisition would either fill a gap in our organizational chart, allow an existing portfolio company to grow, or enable one or more of our existing portfolio companies grow the target company. We currently consider the following types of business models to be ideal 1+1=3 acquisitions for our existing portfolio:
a.) | Online courses that have overlap with our existing course portfolio and their audiences; and | |
b.) | Online services that have service and client overlap with our existing agency portfolio. |
Over time, we expect the definition of an ideal 1+1=3 acquisition to evolve and widen as our portfolio grows and our surface area for strategic acquisitions expands.
We typically acquire ownership in our businesses utilizing one or more of the following: cash, debt, shares of our Series A Preferred stock, rollover interest or joint venture with one of our Onfolio Agency SPV vehicles that utilizes its own cash to acquire a portion of the acquired business. Our Company, through our subsidiary Onfolio Management LLC, is the manager of Onfolio Agency SPV, LLC (“OA SPV”), and Onfolio Agency SPV 2, LLC (“OA SPV 2”), collectively referred to as “OA SPVs”. Our Company does not hold any equity interest in the OA SPVs, but will receive 10% of any cash distributions paid by OA SPV, and 20% of any cash distributions paid by OA SPV 2, to its members, when declared, as the management fee.
As we grow our team, we may not be able to find, vet, and acquire businesses at the speed required for short term financial performance. We rely on our team’s ability to evaluate potential acquisitions. Further, we believe our Company can find acquisition opportunities where the seller has not fully optimized their business. We have grown businesses where digital marketing is the leverage point, and our experience and multi-channel skillset allows us to add a lot of value to existing efforts. This may give us the opportunity to continue to grow the majority of our acquisitions organically. We also believe that due to our corporate structure, our comfort with utilizing a remote workforce, and our status as a public company, we may be able to attract and incentivize talent to help both with our deal flow and acquisition efforts, and our organic growth.
Quality Assurance Programs and Processes
Quality Assurance (“QA”) practices differ depending on the products. Before we acquire any online business that deals with physical products, we research reviews of the products online to see if there is a large number of complaints. We look at the refund rate, and if dealing with a manufacturer on somewhere such as Alibaba, we also look at that manufacturer’s reviews. We also ask for any relevant certificates, licenses, or compliance documents.
In some instances, we may purchase the products ourselves, and this is something we may develop more procedures around if we increase our eCommerce acquisition activities. In the case of Vital-Reaction.com, for our supplement products, we require that our manufacturer be in compliance with cGMP guidelines. We require the manufacturer provide a 3rd party Certificate of Analysis (COA) of the products, which we then replicate with an independent 3rd party laboratory.
Before we acquire service businesses, such as those offering SEO or digital marketing services, we research and evaluate the company’s reputation and acquire feedback across various platforms to gauge overall customer satisfaction. Additionally, we assess the rate of client retention and contract renewals, as these are strong indicators of the quality and value of the services provided. We may also trial their products to evaluate the quality of the services provided.
We use similar practices to conduct spot checks on the services we provide once acquired, using client retention and feedback to gauge customer satisfaction with the services provided.
| 6 |
| Table of Contents |
Management Strategy
Our management strategy involves a combination of sharing resources across online businesses, and employing dedicated managers of individual online businesses. We set clear objectives for our businesses in collaboration with individual managers, and then entrust them with the autonomy to execute strategic decisions within these established parameters. We support them where necessary, but otherwise empower these subject matter experts with the operational freedom to grow the online businesses in line with their responsibilities and our shared objectives.
Our Online Businesses
Our Company is structured as follows:
We own and/or manage the following 17 online businesses:
Eastern Standard - Own
In October 2024, we acquired Eastern Standard, a premier digital agency specializing in brand strategy, website development, and digital marketing. Eastern Standard provides tailored solutions across various industries, helping clients enhance their online presence through strategic branding, search engine optimization (SEO), and user-focused design. Our Company holds a 53% ownership stake in Eastern Standard, while the OA SPVs maintain a 37% equity interest, and the Eastern Standard founders maintain a 10% roll-over equity interest and continue to serve in leadership roles on the Eastern Standard team.
DDSrank.com - Own
In June 2024, we acquired DDS Rank, an online service provider that works with dental professionals to grow their online presence and patient base. DDS Rank offers digital marketing services such as search-engine optimization, paid advertising, and web design. DDS Rank enjoys a strong reputation in its field, specializing in helping dentists improve search engine visibility and attract more patients. Our Company holds a 66% ownership stake in DDS Rank, while OA SPV maintains a 34% equity interest.
RevenueZen.com - Own
In January 2024, we acquired RevenueZen.com, an online service provider that works with B2B brands to grow their organic and referral traffic. RevenueZen offers B2B marketing services such as search-engine optimization, Linkedin marketing and content marketing. RevenueZen enjoys a strong reputation in its field, specializing in working with startups, healthcare, professional services, renewable energy, and financial services businesses, among others. Our Company holds an 88% ownership stake in RevenueZen, while RevenueZen founders received a 12% roll-over equity interest and will serve in leadership roles in the Onfolio-owned RevenueZen team.
Contentellect.com -Own
In January 2023, we acquired Contentellect.com. Contentellect helps small-and medium-sized businesses scale their content with blog writing, link building, and more. The service offering consists of online (i) content writing services (including white label content creation, eBook writing and eCommerce product description writing), (ii) website link building services (including white label link building, HARO link building and SEO outreach services), (iii) social media marketing services, and (iv) virtual assistant services to individuals, businesses and agencies. The content created helps customers by improving organic traffic via search engines, enables them to conduct thought-leadership, and gives sales and marketing teams relevant and usable content at the top and middle of the marketing funnel. Our Company holds a 100% ownership stake in Contentellect.com.
ProofreadAnywhere.com/WorkAtHomeSchool.com/WorkYourWay2020.com - Own
In October 2022, we acquired ProofreadAnywhere.com/WorkAtHomeSchool.com/WorkYourWay2020.com, which provide extensive online resources in the form of courses, workshops and blog posts for readers looking to train and become professional proofreaders. The curriculum helps users spot common errors, catch grammatical mistakes, and in turn, improve their proofreading skills and launch new careers. These online businesses also sell digital books covering several topics such as writing skills and freelancer taxation, and generate revenue through their courses, workshops, and eBook sales, each sold individually and in bundles. Our Company holds a 100% ownership stake in ProofreadAnywhere.com / WorkAtHomeSchool.com / WorkYourWay2020.com.
| 7 |
| Table of Contents |
SEOButler.com - Own
In October 2022, we acquired SEOButler.com, an online provider of extensive products within the SEO niche including content, guest posting, social signals, and citations. The website deploys a custom-built Order Management System (OMS), designed to make the content creation process highly scalable while eliminating the bottlenecks that could otherwise impede the growth of a productized service business that relies primarily on human writers and editors. Our Company holds a 100% ownership stake in SEOButler.com.
Vital-Reaction.com – Own
In December 2020, we acquired Vital-Reaction.com. Vital-Reaction.com is an online supplements business providing molecular hydrogen tablets, clinical and retail inhalers, dermal therapy devices, grounding mats, and other related products. The online business operates out of Boulder, Colorado, and ships across the U.S. and internationally. Products are sourced from within the US, Japan, and China. Customers range from retail customers to U.S. clinicians and doctors who resell or refer customers. Our Company holds a 100% ownership stake in Vital Reaction LLC, which owns Vital-Reaction.com.
Allthingsdogs.com – Own
In December 2020, we acquired Allthingsdogs.com. Allthingsdogs.com is a publishing website in the pet dog vertical. It publishes informational articles related to every breed of dog. The information ranges from how to care for a certain breed, to the best types of dog food, to training tips. As well as advertising revenue, the website earns money from affiliate commissions and sales of its own ebooks and informational products. This website is one of our three online businesses in the dog vertical, providing us with significant growth opportunities and operational efficiencies, plus economies of scale as we offer digital products, physical products, and work with key vendors in the industry. As our audience grows into the hundreds of thousands across the Allthingsdogs.com and Woofwhiskers.com sites, we expect the pet dog aspect of our portfolio to grow in stature and revenue. Our Company holds a 100% ownership stake in Allthingsdogs.com.
DealPipe.io - Own
In November 2023, we launched DealPipe, a service for sourcing “off-market” acquisition targets. Dealpipe utilizes our Company’s experience sourcing off-market deals for ourselves, offering this service to others. The DealPipe team is excited to help serial acquirers find online or offline businesses to add to their portfolios, and to help business owners find good homes for their businesses. Dealpipe earns monthly retainers, plus a success fee based on a percentage of the successful acquisition price, creating a lucrative business model. Our Company holds a 100% ownership stake in DealPipe.io
| 8 |
| Table of Contents |
PaceGenerative – Own
In June 2025, we launched Pace Generative, a dedicated Generative Engine Optimization (“GEO”) agency focused on helping brands appear prominently in AI-generated search results and answers. Pace Generative provides services including question-driven content development, AI-optimized site structure, language and topic alignment for AI models, and strategic publishing designed to increase visibility within AI-powered platforms such as ChatGPT, Google AI Overviews, and Perplexity. The agency targets businesses in sectors where authoritative, trust-dependent content is critical, including healthcare, finance, law, education, consulting, and B2B services. Our Company holds a 100% ownership stake in Pace Generative.
Fishkeepingworld.com – Manage/Own
In January 2020, we began to manage Fishkeepingworld.com. Fishkeepingworld.com is a publishing website in the ornamental fish and aquarium space. It provides information for hobbyists on how to care for their fish, maintain their tank, and level up their hobby. Our Company holds a 13.63% ownership stake in Onfolio JV I, LLC, which owns Fishkeepingworld.com and we receive a management fee of $2,500 per month and 50% profit share of any profits above $12,500 per month for managing this website. For example, if the website produced $2,000 net profit per month before we started managing it, and it produced $3,000 per month afterwards, we would receive 50% of the additional $1,000.
Wowfreestuff.co.uk – Manage/Own
In April 2020, we began to manage Wowfreestuff.com. Wowfreestuff.com has a large audience of hundreds of thousands of people in the UK who want to be notified when companies do freebies and giveaways. Many of these companies pay a commission to the site to help promote their freebies. Our Company holds a 13.59% ownership stake in Onfolio JV III LLC, which owns Wowfreestuff.com and we receive a management fee of $3,000 per month and 50% profit share of any profits above $16,500 for managing this website. For example, if the website produced $2,000 net profit per month before we started managing it, and it produced $3,000 per month afterwards, we would receive 50% of the additional $1,000.
Woofwhiskers.com – Manage/Own
In June 2020, we began to manage Woofwhiskers.com. Woofwhiskers.com is a website reviewing dog food, providing high quality reviews, and receiving lucrative referral fees from dog food companies. The dog food space is competitive, and vendors build strong relationships with high quality publishers to help promote their brands. Woofwhiskers.com is one such website which enjoys strong relationships in the space. Over time, Woofwhiskers.com is building its own audience of dog lovers and will launch its own digital products, and eventually physical products. This website is one of our three online businesses in the dog vertical, providing us with significant growth opportunities and operational efficiencies, plus economies of scale as we offer digital products, physical products, and work with key vendors in the industry. These online businesses earn revenue from display advertising and from affiliate commissions. Our Company holds a 35.8% ownership stake in Onfolio JV IV LLC, which owns Woofwhiskers.com, and owned Perfectdogbreeds.com until the sale of the Perfectdogbreeds.com business operations in July 2025.
| 9 |
| Table of Contents |
Craftwhack.com – Manage/Own
In May 2020, we began to manage Craftwhack.com. Craftwhack.com is a website with free content teaching people how to perform certain arts and crafts. It earns revenue from affiliate commissions and display advertising. Similar to the dog vertical, we manage or own numerous sites in the crafting/DIY/home vertical, and plan to continue growing and improving our presence in the space. Audiences are passionate in this industry, and our skills in content publishing, eCommerce, and digital products gives us ample opportunity to add value and grow revenues in the space. As we now have more presence and more of our owned products in the space, we plan to use Craftwhack.com to continue to grow revenues across the portfolio and generate profits in its own right. Our Company receives 20% of free cash flows for managing this website and we hold a 20% ownership stake in Onfolio Groupbuild 1 LLC, which owns Craftwhack.com and BackgroundHawk.com.
Backgroundhawk.com – Manage/Own
In October 2020, we began to manage Backgroundhawk.com. Backgroundhawk.com is a review website and sits squarely in the growing and lucrative background check and legal check industry. Our Company receives 20% of free cash flows for managing this website. Our Company receives 20% of free cash flows for managing this website and we hold a 20% ownership stake in Onfolio Groupbuild 1 LLC, which owns Craftwhack.com and BackgroundHawk.com.
Outreachmama.com – Manage
In November 2020, we began to manage Outreachmama.com. Outreachmama.com is an SEO/content marketing services online business working with individuals and agencies to grow their presence in Google.com. The owners of this online business are also Onfolio shareholders. Our Company receives a profit share of 50% of growth of profits above what the site was earning on average before we began managing it, plus a management fee of $4,000 per month. Outreachmama.com is one of our two online businesses in the SEO vertical, providing us with significant growth opportunities and operational efficiencies, plus economies of scale. Onfolio sometimes makes use of these services too.
Getmerankings.com – Manage
In October 2021, we began to manage Getmerankings.com. Getmerankings.com is another SEO/content marketing online business. The owners of this online business are also Onfolio shareholders. Our Company receives a profit share of 50% of growth of profits above what the site was earning on average before we began managing it plus a management fee of $4,000 per month for managing this online business. Getmerankings.com is one of our two online businesses in the SEO vertical, providing us with significant growth opportunities and operational efficiencies, plus economies of scale. Onfolio will likely make use of these services too.
2024 and 2025 Divestitures and Impairments
Divestures
Asubtlerevelry.com – Divested June 2025
In January 2020, we began to manage Asubtlerevelry.com. Asubtlerevelry.com covers topics ranging from hosting a house party, to bachelorette party ideas, to recipes, to crafts. The site is a pure content and display advertising site. Long term, the site is forming a strong part of the growing craft/DIY vertical that several of our other managed sites are in. Our Company holds a 10.70% ownership stake in Onfolio JV II LLC, which owned Asubtlerevelry.com until the sale of the business operations in June 2025.
Perfectdogbreeds.com – Divested July 2025
In October 2020, we began to manage Perfectdogbreeds.com. Perfectdogbreeds.com is a guide to owning all the different breeds of dogs in existence. The website earns revenue from display advertising. Our Company holds a 35.8% ownership stake in Onfolio JV IV LLC, which owns Woofwhiskers.com, and owned Perfectdogbreeds.com until the sale of the Perfectdogbreeds.com business operations in July 2025.
Preventdirectaccess.com/Passwordprotectwp.com – Divested December 2024
In October 2022, we acquired Preventdirectaccess.com/Passwordprotectwp.com, which provides a suite of optimization, customization, privacy and security products and services for WordPress websites, with the core offerings consisting of (i) the WordPress plugin known as PREVENT DIRECT ACCESS available via the website preventdirectaccess.com, and (ii) the WordPress plugin known as PASSWORD PROTECT WORDPRESS available via the website passwordprotectwp.com. Customers of these websites utilize these online businesses’ security plugins that allow bloggers, creators, agencies, and SMBs to protect their digital assets, products, and content. Our Company held a 100% ownership stake in Preventdirectaccess.com / Passwordprotectwp.com (“WPFolio LLC”) until the sale of the business operations for $780,000 in an all-cash transaction. We divested this business to align the wider portfolio more closely with our growing B2B agency and information products business lines.
Mightydeals.com – Divested January 2026
In January 2021, we acquired Mightydeals.com and its related domain names. Mightydeals.com is a vendor of design bundles and deals for freelance designers, agencies, hobbyists and solopreneurs. The online business works with creators of design templates, fonts, software, and training (the vendors) and offers their works at steep discounts. It then shares the revenue with the vendors. We divested this business to align the wider portfolio more closely with our growing B2B agency and information products business lines.
Impairments
During the year ended December 31, 2025, the Company recognized an impairment loss of approximately $217,000 related to the investment in allthingsdogs.com, as a result of a decline in the estimated fair value of the asset based on expected disposition proceeds and a discounted cash flow analysis.
Additionally, during the year ended December 31, 2025, the Company recognized an impairment loss of approximately $223,000 related to DDS Rank, as a result of projected declines in operating performance. Management performed a recoverability test and determined that the estimated undiscounted future cash flows were insufficient to recover the carrying amount of the asset group.
| 10 |
| Table of Contents |
During the year ended December 31, 2025, the Company recognized an impairment loss of approximately $269,000 related to the equity method investment in JV IV, as a result of the sale of its investment in perfectdogbreeds.com. The investment in JV IV was impaired in full as the Company does not expect a future benefit as it divested of all major assets.
During the year ended December 31, 2025, the Company recognized an impairment loss of approximately $25,000 related to the cost method investment in JV II, as a result of the sale of its investment in asubtlerevelry.com. The investment in JV II was impaired in full as the Company does not expect a future benefit as it divested of all major assets.
Competition
We experience competition at both the acquisition company level and individual portfolio company level. There is an increased level of acquisition activity in the online businesses space from both new entrants and existing companies. We may compete for acquisitions with companies such as InterActiveCorp, FuturePLC, WeCommerce Holdings, Emerge Commerce, Red Ventures and Tiny to name a few.
We may sometimes find our individual brands competing against one another, but the main factor we compete on is deal flow and closing acquisitions at an attractive price. In the acquisition space we believe the principal competitive factors are:
| · | reputation of acquiring company; |
| · | valuation of target company; |
| · | convenience of due diligence; and |
| · | time to closing. |
At the portfolio level, Eastern Standard may compete with other agencies offering similar digital marketing and web design services such as OHO Interactive, iFactory, Digital Wave, and Digital Silk, amongst others. In this industry, we believe the principal competitive factors are:
| · | quality of digital marketing services and execution; |
| · | experience and expertise of their team; |
| · | customer satisfaction; and |
| · | competitive pricing and value for money. |
DDS Rank may compete with other agencies offering similar dental SEO and marketing services such as The Dental SEO Company, Best Results Dental Marketing, and PatientGain, amongst others. In this industry, we believe the principal competitive factors are:
| · | patient lead generation for dentists; |
| · | quality of SEO and marketing strategies; |
| · | experienced dental SEO experts; and |
| · | customer satisfaction from dentists. |
RevenueZen may compete with other agencies offering similar digital marketing services such as Skale, SaaSpirin, and SimpleTiger, amongst others. In this industry, we believe the principal competitive factors are:
| · | client sales pipeline generation; |
| · | quality of methodology and execution; |
| · | experienced, high output strategists; and |
| · | customer satisfaction. |
| 11 |
| Table of Contents |
For Contentellect, the main competitors include Fat Joe, Outreach Monks, Brand Featured and Writing Studio. In this industry, we believe the principal competitive factors are:
| · | quality of deliverables; |
| · | quality of service and communication; |
| · | scalability; and |
| · | customer satisfaction. |
Proofread Anywhere may compete with other courses in the freelancing space, such Knowadays, The Proofreading Business Coach, Bookkeeper Launch, and Virtual Savvy, among others. In this industry we believe the primary competitive factors are:
| · | quality of product; |
| · | communication of benefits; |
| · | price of course; and |
| · | positive and recent third-party reviews. |
SEOButler may compete with other link building agencies, such as Loganix, SirLinksALot, LinkBuilder, Fat Joe, and Outreach Monks. In this industry, we believe the principal competitive factors are:
| · | quality of deliverables; |
| · | quality of service and communication; |
| · | scalability; and |
| · | customer satisfaction. |
Vital Reaction competes with brands such as DrinkHRW, DrMercola and Quicksilver Scientific. In this industry we believe the principal competitive factors are:
| · | quality of product; |
| · | communication of benefits; |
| · | price of product; |
| · | safety; and |
| · | customer satisfaction. |
Pace Generative may compete with other agencies offering Generative Engine Optimization or AI visibility services, an emerging category that includes firms such as Profound Strategy, Terakeet, and other digital marketing agencies expanding into AI search optimization.
We believe in this industry the principal competitive factors are:
| · | depth of expertise in AI-driven search platforms; |
| · | quality of content strategy and execution; |
| · | ability to deliver measurable visibility in AI-generated results; and |
| · | customer satisfaction. |
| 12 |
| Table of Contents |
Intellectual Property
We regard some aspects of our internal operations, software, and documentation as proprietary, and rely primarily on a combination of contract and trade secret laws to protect our proprietary information. We believe, because of the rapid pace of technological change in the computer software industry, trade secret and copyright protections are less significant than factors such as the knowledge, ability, and experience of our employees, frequent software product enhancements, and the timeliness and quality of our support services. The source code for our proprietary software is protected as a trade secret. We enter into confidentiality or license agreements with our employees, consultants, and clients, and control access to and distribution of our software, documentation, and other proprietary information. We cannot guarantee that these protections will be adequate or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology.
We do not believe our software products or other proprietary rights infringe on the property rights of third parties. However, we cannot guarantee that third parties will not assert infringement claims against us with respect to current or future software products or that any such assertion may not require us to enter into royalty arrangements or result in costly litigation.
We have registered trademark and copyrights for the Vital Reaction and Mighty Deals company name. We may file trademarks, copyrights, and patents for our other online businesses as well.
Government Regulation
We are subject to a variety of domestic and foreign laws and regulations in the U.S. and abroad involving matters that are important to (or may otherwise impact) our various websites, such as broadband internet access, online commerce, privacy and data security, advertising, intermediary liability, consumer protection, taxation, worker classification and securities compliance. These domestic and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are continually evolving and can be subject to significant change. As a result, the application, interpretation and enforcement of these laws and regulations (and any amended, proposed or new laws and regulations) are often uncertain, particularly in the Internet industry, and may vary from jurisdiction to jurisdiction and over time, which could result in conflicts with the current policies and practices of our websites.
Because we conduct substantially all of our business on the Internet, we are particularly sensitive to laws and regulations that could adversely impact the popularity or growth in use of the Internet and/or online products and services generally, restrict or otherwise unfavorably impact whether or how we may provide our products and services, regulate the practices of third parties upon which we rely to provide our products and services and/or undermine an open and neutrally administered Internet access. For example, in December 2017, the U.S. Federal Communications Commission (the “FCC”) adopted the Restoring Internet Freedom Order. This order, which was released in January 2018 and took effect in June 2018, reversed net neutrality protections in the United States that had been in place since 2015, including the repeal of specific rules against blocking, throttling or “paid prioritization” of content or services by Internet service providers. In April 2024, the FCC reinstated net neutrality rules, but in early 2025, a U.S. federal appeals court blocked the new rules. Also, Section 230 of the Communications Decency Act of 1996 (“Section 230”), which generally provides immunity for website publishers from liability for third party content appearing on their platforms and the good faith removal of third party content from their platforms that they may deem obscene or offensive (even if constitutionally protected speech), since its adoption has been (and continues to be) subject to a number of challenges. The immunities conferred by Section 230 could also be narrowed or eliminated through amendment, regulatory action or judicial interpretation. In 2018, the U.S. Congress amended Section 230 to remove certain immunities and most recently, in 2020, various members of the U.S. Congress introduced bills to further limit Section 230, and a petition was filed by a Department of Commerce entity with the Federal Communications Commission to commence a rulemaking to further limit Section 230. Any future adverse changes to Section 230 could result in additional compliance costs for us and/or exposure for additional liabilities.
| 13 |
| Table of Contents |
Because we receive, store and use a substantial amount of information received from or generated by our users and subscribers, we are also impacted by laws and regulations governing privacy, the storage, sharing, use, processing, disclosure and protection of personal data and data security, primarily in the case of our operations in the United States and the European Union and the handling of personal data of users located in the United States and the European Union. Recent examples of comprehensive regulatory initiatives in the area of privacy and data security include a comprehensive European Union privacy and data protection reform, the General Data Protection Regulation (the “GDPR”), which became effective in May 2018. The GDPR, which applies to certain companies that are organized in the European Union or otherwise provide services to (or monitor) consumers who reside in the European Union, imposes significant penalties (monetary and otherwise) for non-compliance, as well as provides a private right of action for individual claimants. The GDPR will continue to be interpreted by European Union data protection regulators, which may require us to make changes to our business practices and could generate additional risks and liabilities. The European Union is also considering an update to its Privacy and Electronic Communications Directive to impose stricter rules regarding the use of cookies.
In addition, in October 2015, the European Court of Justice (“ECJ”) invalidated the U.S.-EU Safe Harbor framework that had been in place since 2000 for the transfer of personal data from the European Economic Area (the “EEA”) to the U.S., and on July 16, 2020, the ECJ invalidated the EU-U.S. Privacy Shield as an adequate safeguard when transferring personal data from the EEA to the U.S. These regulations continue to evolve and may ultimately require us to devote resources towards compliance and/or make changes to our business practices to ensure compliance, all of which could be costly. Also, the exit from the European Union by the United Kingdom could result in the application of new and conflicting data privacy and protection laws and standards to our operations in the United Kingdom and our handling of personal data of users located in the United Kingdom. At the same time, many jurisdictions abroad in which we do business have already or are currently considering adopting privacy and data protection laws and regulations.
Moreover, while multiple legislative proposals concerning privacy and the protection of user information are being considered by the U.S. Congress and various U.S. state legislatures, certain U.S. state legislatures have already enacted privacy legislation, one of the strictest and most comprehensive of which is the California Consumer Privacy Act of 2018, which became effective on January 1, 2020 (the “CCPA”). The CCPA provides new data privacy rights for California consumers, and restricts the ability of certain of our websites to use personal California user and subscriber information in connection with their various products, services and operations. The CCPA also provides consumers with a private right of action for security breaches, as well as provides for statutory damages. In addition, on November 3, 2020, California voters approved Proposition 24 (the “California Privacy Rights Act of 2020”), which amends certain provisions of the CCPA and became effective January 1, 2023, will further restrict the ability of certain of our websites to use personal California user and subscriber information in connection with their various products, services and operations and/or impose additional operational requirements on such websites. Lastly, the U.S. Federal Trade Commission has also increased its focus on privacy and data security practices, as evidenced by the first-of-its-kind, $5 billion dollar fine against a social media platform for privacy violations in 2019. As a result, we could be subject to various private and governmental claims and actions in this area.
As a provider of certain subscription-based products and services, we are also impacted by laws or regulations affecting whether and how our online businesses may periodically charge users for membership or subscription renewals. For example, the European Union Payment Services Directive, which became effective in 2018, could impact the ability of certain of our online businesses to process auto-renewal payments for, as well as offer promotional or differentiated pricing to, users who reside in the European Union. Similar laws exist in the U.S., including the federal Restore Online Shoppers Confidence Act and various U.S. state laws, and legislative and regulatory enactments or amendments are under consideration in a number of U.S. states.
We are also sensitive to the adoption of new tax laws. The European Commission and several European countries have recently adopted (or intend to adopt) proposals that would change various aspects of the current tax framework under which certain of our European online businesses are taxed, including proposals to change or impose new types of non-income taxes (including taxes based on a percentage of revenue).
In addition, in the case of certain online businesses, such as Vital Reaction, we must be compliant with U.S. Food and Drug Administration (“FDA”) regulations for claims made by supplement companies. All of our marketing materials must be in alignment with both the spirit and letter of the disclaimer, “These products/claims have not been evaluated by the FDA. These products are not intended to diagnose, treat or cure any health conditions.”
We are also subject to laws, rules and regulations governing the marketing and advertising activities of our various online businesses conducted by or through telephone, email, mobile digital devices and the Internet, including the Telephone Consumer Protection Act of 1991, the Telemarketing Sales Rule, the CAN-SPAM act and similar state laws, rules and regulations, as well as local laws, rules and regulations and relevant agency guidelines governing background screening.
| 14 |
| Table of Contents |
Further, all of our websites could be subject to the Americans with Disabilities Act (the “ADA”) The ADA does not explicitly address online compliance. With no specific coverage under the law, it usually falls to the courts to determine how ADA standards apply to websites—or whether they do at all.
Lastly, as a company based in the U.S. with foreign offices in various jurisdictions worldwide, we are subject to a variety of foreign laws governing the foreign operations of our various online businesses, as well as U.S. laws that restrict trade and certain practices, such as the Foreign Corrupt Practices Act.
Non-Government Regulation
From a non-Governmental standpoint, we also need to comply with policies and terms of service on various platforms, including but not limited to: Facebook, Facebook Ads, Instagram, Pinterest, Google Ads, Google Search, X, TikTok, and YouTube.
Properties and Facilities
The Company is a remote company, meaning that it does not have a physical office where employees work. Our executive officers and other employees have the option of either telecommuting or working from somewhere else. We lease and maintain an office at the Executive Centre Taipei, Level 4, Neihu New Century Building No, No. 55, Zhouzi St, Neihu District, Taipei City, 114, Taiwan (approximately $400 per month), and a community and co-working space at The Mill at 1007 North Orange Street, 4th Floor Wilmington, Delaware 19801 ($75 per month). We do not currently own any real estate. We consider our space at 1007 North Orange Street, 4th Floor Wilmington, Delaware 19801 to be our principal executive office.
Legal Proceedings
From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are currently not a party to any material legal proceedings.
Employees
Our company, including all its subsidiaries, has 27 full-time employees. It also utilizes 12 full-time contractors in connection with its business operations.
Corporate History and Information
Onfolio Holdings Inc. was incorporated under the laws of the State of Delaware on July 20, 2020. Unless the context otherwise requires, all references to “our Company,” “we,” “our” or “us” and other similar terms means Onfolio Holdings Inc., a Delaware corporation, and our wholly owned subsidiaries.
We consider our space at 1007 North Orange Street, 4th Floor Wilmington, Delaware 19801 to be our principal executive office. The Company is a remote company, meaning that it does not have a physical office where employees work. Our executive officers and other employees have the option of either telecommuting or working from somewhere else. The Company employs workers in numerous time zones around the world. Our telephone number is (682) 990- 6920. Our website address is located at https://www.onfolio.com. The information contained on our website is not incorporated by reference into this Report on Form 10-K, and you should not consider any information contained on, or that can be accessed through, our website as part of this Report on Form 10-K or in deciding whether to purchase our securities.
Where You Can Find Additional Information
The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.We file periodic reports under the Securities Exchange Act of 1934, including annual, quarterly and special reports, and other information with the Securities and Exchange Commission. These periodic reports and other information are available on the website of the Securities and Exchange Commission referred to above.
| 15 |
| Table of Contents |
Our internet website address is www.onfolio.com We make available free of charge on or through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.
Item 1A. Risk Factors.
Investing in our securities involves a high degree of risk. In addition to the other information contained in this Report on Form 10-K, you should consider carefully the following risk factors in evaluating our business and us. There are numerous and varied risks that may prevent our Company from achieving its goals. If any of these risks actually occur, our Company’s business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock, series A preferred stock and warrants could decline and investors could lose all or part of their investment. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also significantly impair our business operations and could result in a complete loss of your investment.
Risks Related to Our Business – General
We may not be able to continue to successfully manage our online businesses on a combined basis.
We were incorporated on July 20, 2020, and have conducted operations since May 2019. Our failure to continue to develop and maintain effective systems and procedures, including accounting and financial reporting systems, or to manage our operations as a consolidated public company, may negatively impact our ability to optimize the performance of our Company, which could adversely affect our business, financial condition and operating results. In that case, our financial statements might not be indicative of our business, financial condition and operating results.
Many of our online businesses have a limited operating history upon which investors can evaluate their future prospects.
Many of our online businesses have a limited operating history upon which an evaluation of our online businesses and plans or performance and prospects can be made. Our business and prospects must be considered in the light of the potential problems, delays, uncertainties and complications encountered in connection with newly established businesses. The risks include, but are not limited to, the possibility that we will not be able to build a positive reputation with customers, distinguish ourselves from competitors, scale our business efficiently, maintain and expand our businesses relationships with suppliers and service vendors, respond to evolving industry standards and government regulation that impact our business and our online businesses, particularly in the areas of data collection and consumer privacy, prevent or mitigate failures or breaches of security, continue to expand our business internationally, and hire and retain qualified and motivated employees. We cannot assure you that we can successfully address these challenges and if unsuccessful, our, financial condition and operating results could be materially and adversely affected.
We have incurred operating losses since our inception and we may continue to incur substantial operating losses for the foreseeable future.
We have incurred operating losses and experienced negative cash flow since our inception. We incurred a net loss of $2,540,368 and $1,773,942 for the year ended December 31, 2025 and December 31, 2024, respectively. We may continue to incur operating losses through at least 2026.
We may not be able to generate sufficient revenue from owning and/or managing our online businesses to achieve profitability. We expect to continue to make significant operating and capital expenditures for acquisitions of online businesses, technologies, or other assets; and for marketing, working capital and general corporate purposes. As a result, we will need to generate significant revenue to achieve profitability. We cannot assure you that we will ever achieve profitability.
| 16 |
| Table of Contents |
Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.
As described in Note 3 of our accompanying audited financial statements, our auditors have issued a going concern opinion on our December 31, 2025 financial statements, expressing substantial doubt that we can continue as an ongoing business for the next twelve months after issuance of their report based on our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing, debt financing and/or related party advances, however there is no assurance of additional funding being available. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot raise the necessary capital to continue as a viable entity, we could experience a material adverse effect on our business and our stockholders may lose some or all of their investment in us.
We can provide no assurances that any additional sources of financing will be available to us on favorable terms, if at all. Our forecast of the period of time through which our current financial resources will be adequate to support our operations and the costs to support our general and administrative and acquisition activities are forward-looking statements and involve risks and uncertainties.
If we do not succeed in raising additional funds on acceptable terms, we could be forced to delay or curtail potential website acquisitions, forego sales and marketing efforts, and forego potential attractive business opportunities. Unless we secure additional financing, we will be unable to continue to execute on our business plan.
We require additional capital to support our present business plans and our anticipated business growth, and such capital may not be available on acceptable terms, or at all, which would adversely affect our ability to operate.
We will require additional funds to further develop our business plan. Based on our current operating plans, we believe we need to make additional acquisitions of online businesses, technologies, or other assets to generate enough cashflow to carry our overhead costs. We may choose to raise additional capital in order to expedite and propel growth more rapidly. We can give no assurance that we will be successful in raising any additional funds. Additionally, if we are unable to generate sufficient revenues from our sales and operating activities, we may need to raise additional funds, doing so through debt and equity offerings, in order to meet our expected future liquidity and capital requirements, including capital required for operations. Any such financing that we undertake will likely be dilutive to current stockholders.
We intend to continue to make investments to support our business growth, including acquiring additional online businesses. In addition, we may also need additional funds to respond to other business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual property, satisfying debt and series A preferred stock payment obligations, and enhancing our operating infrastructure. While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, holders of our common stock, or otherwise adversely affect holders of our common stock and series A preferred stock. We may also seek to raise additional funds through arrangements with collaborators or other third parties. We may not be able to negotiate any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all our business plans.
We cannot predict our future capital needs and we may not be able to secure additional financing.
In October 2025 we raised $1.0 million in gross proceeds pursuant to a private offering consisting of units comprised of common stock and warrants to purchase common stock, and in November 2025 we issued senior secured convertible notes in the aggregate principal amount of $6.0 million (the “Senior Secured Notes”), but we will need to raise additional funds in the future to fund our working capital needs and to fund further expansion of our business. Although Company has authorized senior secured convertible notes of the Company, in the aggregate original principal amount of up to $300,000,000, depending on a number of factors, we may not be able to nor desire to sell any additional authorized senior secured convertible notes. We may require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for these purposes. No assurance can be given that necessary funds will be available for us to finance our development on acceptable terms, if at all. Furthermore, such additional financings may involve substantial dilution of our stockholders or may require that we relinquish rights to certain of our technologies or products. In addition, we may experience operational difficulties and delays due to working capital restrictions. If adequate funds are not available from operations or additional sources of financing, we may have to delay or scale back our growth plans.
| 17 |
| Table of Contents |
The Senior Secured Notes provide the note holder with liens on substantially all of our assets and contains financial covenants and other restrictions on our actions, which may cause significant risks to our stockholders and may impact our ability to operate our business. Any failure to meet our debt and other financial obligations or maintain compliance with related covenants could harm our business, financial condition, and results of operations.
On November 17, 2025, we issued the Senior Secured Notes in the aggregate principal amount of $6.0 million. In connection with the securities purchase agreement (the “Securities Purchase Agreement”) with the buyer relating to the Senior Secured Notes and the issuance of the Senior Secured Notes, we entered into a Security and Pledge Agreement (the “Security Agreement”) with the lead buyers, in its capacity as collateral agent, pursuant to which we granted to the lead buyer, for the ratable benefit of the lead buyer and the other buyers, a valid, perfected and enforceable security interest in all personal property and assets of the Company and its subsidiaries, which assets include substantially all of the assets of the Company and certain of the Company’s subsidiaries.
Pursuant to terms of the Senior Secured Notes and the Security Agreement, we have granted liens on substantially all of our assets, as collateral, and have agreed to significant covenants, including covenants that materially limit our ability to take certain actions, including our ability to pay dividends on our common stock, make certain investments and other payments, incur additional indebtedness, encumber and dispose of assets and customary events of default, including failure to pay amounts due, breaches of covenants and warranties, material adverse effect events, certain cross defaults and judgements and insolvency. For example, the Security Agreement contains restrictions on our ability to purchase or dispose of assets and have other affirmative and negative covenants that impact how we run our business. A failure to comply with the covenants and other provisions of the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue) and the Security Agreement, including any failure to make a payment when required, would generally result in events of default under such instruments.
Our ability to make scheduled payments on the Senior Secured Notes (and any additional senior secured convertible notes we may issue) and other financial obligations and comply with financial covenants depends on our financial and operating performance. Our financial and operating performance will continue to be subject to prevailing economic conditions and to financial, business, and other factors, some of which are beyond our control. Failure within any applicable grace or cure periods to make such payments, comply with the financial covenants, or any other non-financial or restrictive covenant, would create a default under the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue). Our cash flow and existing capital resources may be insufficient to repay our debt on each payment date and at maturity, in which case we would have to extend such payment date or maturity date, as applicable, or otherwise repay, refinance, and/or restructure the obligations under the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue), including with proceeds from the sale of assets, and additional equity or debt capital. If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance, or restructure prior to any payment date or maturity, as applicable, or any other default existed under the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue), the interest rate would increase during the period of such default, the note holder would have an option to convert all or any portion of the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue) at a lower conversion price, and the note holder would have the right to require us to redeem all or any portion of the Senior Secured Notes (and any additional senior secured convertible notes of the Company we may issue) at a 120% redemption price, which would jeopardize our ability to continue our current operations and result in a material adverse effect on us.
Additionally, in connection with the Securities Purchase agreement, we issued rights to receive common stock (“Rights”) to the buyers of the Senior Secured Notes and we entered into a registration rights agreement (“Registration Rights Agreement”) with the buyers of the Senior Secured Notes whereby we agreed to register with the U.S. Securities and Exchange Commission the shares of common stock received by the buyers pursuant to the Rights and upon conversion of the Senior Secured Notes. The Registrations Rights Agreement contains certain covenants and other obligations that subject us to damages, including liquidated damages, if we breach such covenants or fail to fulfill such obligations. Our failure to meet our obligations or maintain compliance with related covenants could harm our business, financial condition, and results of operations since such failures could cause us to utilize significant portions of our cash reserves and adversely affect our liquidity.
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the Senior Secured Notes when they come due.
On November 17, 2025, we issued the Senior Secured Notes in the aggregate principal amount of $6.0 million. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
| · | increasing our vulnerability to adverse economic and industry conditions; |
| · | limiting our ability to obtain additional financing on acceptable terms or at all; |
| · | requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; |
| · | limiting our flexibility to plan for, or react to, changes in our business |
| · | diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Senior Secured Notes and related Rights; and |
| · | placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital. |
Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under the Senior Secured Notes and our cash needs may increase in the future.
| 18 |
| Table of Contents |
We may not have the ability to raise the funds necessary to settle conversions of the Senior Secured Notes in cash or to repurchase the notes upon an event of default or a fundamental change.
Holders of our Senior Secured Notes will have the right, subject to certain conditions and exceptions, to require us to repurchase all or any portion of their notes upon the occurrence of an event of default or a fundamental change at a repurchase price equal to 120% of the principal amount of the Senior Secured Notes to be repurchased, plus accrued and unpaid interest, if any, and other penalties. In addition, upon conversion of the Senior Secured Notes, unless the Senior Secured Noteholders elect to receive solely shares of our common stock to settle such conversion, we will be required to make cash payments with respect to the Senior Secured Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the Senior Secured Notes surrendered therefor or pay cash with respect to the Senior Secured Notes being converted. In addition, our ability to repurchase the Senior Secured Notes or to pay cash upon conversions of the Senior Secured Notes may be limited by law or by regulatory authority or otherwise. Our failure to repurchase the Senior Secured Notes at a time when the repurchase is required by the Securities Purchase Agreement and the Senior Secured Notes or to pay any cash payable on future conversions of the Senior Secured Notes as required by the Securities Purchase Agreement and the Senior Secured Notes would constitute a default under the Securities Purchase Agreement and the Senior Secured Notes. A default under the Securities Purchase Agreement and the Senior Secured Notes or the fundamental change itself could also lead to a default under other agreements we are subject to. If the repayment of the other related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Senior Secured Notes or make cash payments upon conversions thereof.
We are currently in default pursuant to the Senior Secured Notes and Registration Rights Agreement.
The Senior Secured Notes and Registration Rights Agreement contain certain covenants that we did not meet, which caused the triggering of certain events of default as more fully described in the Senior Secured Notes and Registration Rights Agreement. Our breach of such covenants included our failure to settle our Eastern Standard Note for common shares, our failure to have an registration statement covering the shares of common stock underlying the Senior Secured Notes declared effective within a certain timeframe, and our failure to pay to the Senior Secured Noteholders a percentage of net proceeds received pursuant to the sale of certain assets, all as more fully described in the Senior Secured Notes and Registration Rights Agreement. As a result, the Senior Secured Noteholders are entitled to: (i) 62.5% of the net proceeds from the sale of our Mightydeals.com business, (ii) redeem all, or any portion, of the Senior Secured Notes in cash at any time, (iii) adjust the conversion price of the Senior Secured Notes from the initial $0.984 per share, subject to adjustment, to an alternate conversion price, which shall remain in effect during the occurrence and continuance of an event of default, which is equal to 85% of the lowest VWAP of our common stock of any trading day during the twenty (20) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice, and (iv) approximately $400,000 in liquidated damages. As of March 31, 2026, the Senior Secured Noteholders have not exercised any default remedies that they are entitled to and we are currently negotiating a waiver with the Senior Secured Noteholders to waive the default remedies described in items (i), (ii) and (iv) above. No assurances can be made; however, that any or all of the default remedies described above will be waived by the Senior Secured Noteholders or that any waiver of any or all of the default remedies described above will occur at all.
Certain provisions in the Securities Purchase Agreement and the Senior Secured Notes may delay or prevent an otherwise beneficial takeover attempt of us.
Certain provisions in the Securities Purchase Agreement and the Senior Secured Notes may make it more difficult or expensive for a third party to acquire us. For example, the Securities Purchase Agreement and the Senior Secured Notes require us to repurchase the Senior Secured Notes upon the occurrence of an event of default or a fundamental change at a cash repurchase price equal to 120% of the principal amount of the Senior Secured Notes to be repurchased, plus accrued and unpaid interest, if any, and other potential penalties, and to increase the conversion rate for a holder that converts its Senior Secured Notes in connection with such a transaction. As a result, a takeover of us could make it more costly for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.
If we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to pursue our growth strategy.
Our future success will depend upon the continued services of Dominic Wells, our Chief Executive Officer; Adam Trainor, our Interim Chief Financial Officer and Chief Operations Officer; and other members of our key management team and our consultants. We especially consider Mr. Wells to be critical to the management of our business and operations and the development of our strategic direction. Though no individual is indispensable, the loss of the services of these individuals could have a material adverse effect on our business, operations, revenues or prospects. We do not currently maintain key man life insurance on the lives of these individuals. Our future success will also depend on our ability to identify, hire, develop, motivate and retain highly skilled personnel. Competition in our industry for qualified employees is intense, and our compensation arrangements may not always be successful in attracting new employees and/or retaining and motivating our existing employees. Future acquisitions by us may also cause uncertainty among our current employees and employees of the acquired business, which could lead to the departure of key individuals. Such departures could have an adverse impact on the anticipated benefits of an acquisition.
| 19 |
| Table of Contents |
The need to sustain our current operating structure may place a significant strain on our management and our administrative, operational and financial reporting infrastructure.
Our success will depend in part on the ability of our senior management to effectively manage our current operating structure. To do so, we need to continue to appropriately incentivize, manage and retain our employees, or replace our employees as needed. If our employees perform poorly, or if we are unsuccessful in hiring, training, managing and integrating any new employees, or if we are not successful in retaining our existing employees, our business may be harmed. To manage our operations and personnel, we will need to continue to improve our operational and financial controls and update our reporting procedures and systems. The continued working capital investments that we require will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. If we fail to successfully manage our current operating infrastructure, we will be unable to continue to execute our business plan. We may also need to hire, train and manage new employees as needed.
Negative publicity could adversely affect our reputation, our business, and our operating results.
Negative publicity about our Company, including, but not limited to the quality and reliability of our online businesses products and services, our privacy and security practices, and litigation could adversely affect our reputation which, in turn, could adversely affect our business, results of operations and financial condition.
Natural disasters and other events beyond our control could materially adversely affect us.
Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power shortages, pandemics and other events beyond our control. Such events could make it difficult or impossible for us to deliver our products and services to our customers and could decrease demand for our products and services.
Additionally, we depend on the efficient and uninterrupted operations of our third-party data centers and hardware systems. The data centers and hardware systems are vulnerable to damage from earthquakes, tornados, hurricanes, fire, floods, power loss, telecommunications failures and similar events. If any of these events results in damage to third-party data centers or systems, we may be unable to provide our clients with our products and services until the damage is repaired and may accordingly lose clients and revenues. In addition, subject to applicable insurance coverage, we may incur substantial costs in repairing any damage.
Political and economic factors may negatively affect our financial condition or results of operations.
Some of our online businesses are eCommerce businesses that obtain physical products that are imported from China and Japan. Supply chain interruptions, regulatory changes, catastrophic events or political climate, including the occurrence of war and or other hostilities, could potentially adversely impact our relationships with these vendors. Additionally, tariffs and rising inflation could cause our product, marketing, and labor costs to rise beyond an acceptable level to us or cause us to increase our prices to a level not accepted by consumers. Any of these factors could negatively impact our financial condition or results of operations.
Risks Related to Our Business – Primary Risk Factors Related to Our Specific Online Businesses
EasternStandard.com
| · | Economic Downturn Impact. In the event of an economic slowdown or recession, businesses may reduce marketing and branding budgets to cut costs, which could lead to Eastern Standard facing lower client demand, impacting revenue. |
|
|
|
| · | Advertising Platform Policy Changes. Eastern Standard’s digital marketing services rely on platforms like Google and Meta. If these platforms adjust their algorithms, ad pricing, or restrictions, it could reduce the effectiveness of digital marketing campaigns, increase costs for clients, and make Eastern Standard’s services less competitive. |
| 20 |
| Table of Contents |
DDSRank.com
| · | Dental Industry Consolidation. The dental industry is experiencing consolidation, with larger dental groups and private equity-backed organizations acquiring independent practices. As more dental practices become part of larger networks, we could see more budget available to spend on SEO and digital marketing services. However, if they instead build in-house marketing teams, there may be a decline in third party services, potentially impacting DDS Rank’s revenue. |
|
|
|
| · | Local Search Algorithm Changes. DDS Rank relies on local SEO to generate patient leads for its clients. If search engines modify their local ranking algorithms in ways that disadvantage smaller dental practices, DDS Rank’s clients may see reduced visibility, which could negatively affect DDS Rank’s revenue and client retention. |
Revenuzen.com
| · | SEO & Digital Marketing Services Industry Growth. The SEO & Digital Marketing Services industry is significant and expected to continue growing over the next 5 years. In the event this industry’s growth does not occur as expected, or occurs slower than expected, the popularity of RevenueZen.com’s services could decrease, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
|
|
|
| · | Improvements in Software and AI. Technology developments may reduce the demand for human-led digital marketing services, reducing the need to engage marketing agencies, which could in turn negatively impact the Company’s revenue. |
Pace Generative
| · | AI Search Platform Algorithm and Policy Changes. Pace Generative's services depend on AI platforms citing and referencing its clients' content when generating responses. If major AI platforms alter how they select, surface, or attribute sources, or reduce the use of external citations altogether, Pace Generative's ability to deliver measurable results for clients could diminish, which could in turn negatively affect client retention and the Company's revenue. |
|
|
|
| · | Nascent Generative Engine Optimization Market. Pace Generative operates in the emerging Generative Engine Optimization (GEO) market, which helps brands gain visibility in AI-powered search platforms such as ChatGPT, Perplexity, and Google's AI Overviews. Because this market is still in its early stages, there is no guarantee that demand for GEO services will grow as anticipated. If businesses do not prioritize AI search visibility, or if the shift from traditional search to AI-generated answers occurs more slowly than expected, Pace Generative's revenue could be negatively impacted. |
Vital-Reaction.com
| · | FDA Headwinds. The Food and Drug Administration (“FDA”) is the predominant driver of legislation around molecular hydrogen. Currently, as more and more research is published and peer-reviewed, the FDA is allowing more products to enter the market. However, should the FDA adversely change its attitude towards molecular hydrogen, this could impact Vital-Reaction.com’s ability to sell hydrogen products in the US. |
|
|
|
| · | Email and Facebook Advertising Changes. Vital-Reaction.com generates a large portion of its revenue through email and Facebook marketing efforts. As privacy rules change, enforced by Apple in particular, its ability to generate web traffic, and therefore customers, can be negatively impacted. |
| 21 |
| Table of Contents |
Allthingsdogs.com
| · | Google Traffic Changes. Currently a significant portion of web traffic to Allthingsdogs.com is derived from its high rankings in Google search. Google regularly makes changes to its ranking algorithm, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation. |
|
|
|
| · | Display Advertising. The Allthingsdogs.com website currently generates 99% of its income from display advertising. If the display advertising revenue model should experience a significant decline, then Allthingsdogs.com’s revenue would significantly decline. |
SEOButler.com
| · | SEO Services Industry Growth. The SEO Services industry is significant and expected to continue growing over the next 5 years. In the event this industry’s growth does not occur as expected, or occurs slower than expected the popularity of SEOButler.com’s services could decrease, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
ProofreadAnywhere.com/WorkAtHomeSchool.com/WorkYourWay2020.com
| · | Improvements in Software and AI. Technology developments may improve the quality of automated proofreading, which may lead to reduced career opportunities for proofreaders and lower demand for proofreading education. |
Contentellect.com
| · | SEO Services Industry Growth. The SEO Services industry is significant and expected to continue growing over the next 5 years. In the event this industry’s growth does not occur as expected, or occurs slower than expected the popularity of Contentellect.com’s services could decrease, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
|
|
|
| · | Improvements in Software and AI. Technology developments may reduce the demand for human written content and negatively impact the Company’s revenue. |
Fishkeepingworld.com
| · | Google Traffic Changes. Currently a significant portion of web traffic to Fishkeepingworld.com is derived from its high rankings in Google search. Google regularly makes changes to its ranking algorithm, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation. |
|
|
|
| · | Email Marketing Changes. As with our other online businesses, the changes to email marketing and iOS privacy rules could impact FishKeepingWorld.com’s email marketing efforts, which accounts for around 5% of the overall revenue. |
Wowfreestuff.co.uk
| · | Search Engine Traffic Changes. Currently a significant portion of web traffic to Wowfreestuff.co.uk is driven by rankings in the UK search engines for terms related to freebies. UK search engines regularly make changes to their ranking algorithms, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation. |
|
|
|
| · | Freebie Offerings. If companies no longer utilize freebies or giveaways as part of their marketing strategy, Wowfreestuff.co.uk will have fewer products to promote on its website, which in turn could negatively impact the website’s commission revenue generation. |
|
|
|
| · | Email Marketing. The vast majority of Wowfreestuff.co.uk’s revenue is generated by emailing its subscribers on a daily basis letting them know about new deals. Any third-party company changes to their email privacy/deliverability rules could negatively impact the website’s ability to email its audience, which in turn could negatively impact the website’s revenue generation. |
| 22 |
| Table of Contents |
Woofwhiskers.com
| · | Google Traffic Changes. Currently a significant portion of web traffic to Woofwhiskers.com is derived from its high rankings in Google search. Google regularly makes changes to its ranking algorithm, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation. |
|
|
|
| · | Pet Food Brands. Visitors to the Woofwhiskers.com website are predominantly driven by the website’s reviews of dog food brands. In the event certain brands are no longer offered or fewer new brands come to market, the website could experience a loss of traffic, which in turn could negatively impact the website’s revenue generation. |
Craftwhack.com – Managed Property
| · | Google Traffic Changes. Currently a significant portion of web traffic to Craftwhack.com is derived from its high rankings in Google search. Google regularly makes changes to its ranking algorithm, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation our Company’s revenue. |
|
|
|
| · | Popularity of Crafting. A large part of the growth of Craftwhack.com has come from the growth in home and DIY and crafting activities, accelerated by the previous Covid-19 pandemic. The loss of popularity of these activities could negatively impact the website’s revenue generation our Company’s revenue. |
|
|
|
| · | Dissatisfaction With Our services. Our Company manages the Craftwhack.com website pursuant to a fee-based contract where we earn a profit share. In the event the owner of the website becomes dissatisfied with our management services or no longer considers the cost of our management services fee to have sufficient value, the website could terminate our management contract, which would negatively impact our Company’s revenue. |
Backgroundhawk.com – Managed Property
| · | Loss of momentum. Backgroundhawk.com is in growth mode and it continues to grow at a steady pace. In the event the website’s growth momentum stalls, the revenues we expect from this website could fail to materialize. |
|
|
|
| · | Google Traffic Changes. Currently a significant portion of Backgroundhawk.com is derived from its high rankings in Google search. Google regularly makes changes to its ranking algorithm, and any one change could negatively impact the website’s rankings and lead to a loss of traffic, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
|
|
|
| · | Dissatisfaction With Our services. Our Company manages the Backgroundhawk.com website pursuant to a fee-based contract where we earn a profit share. In the event the owner of the website becomes dissatisfied with our management services or no longer considers the cost of our management services fee to have sufficient value, the website could terminate our management contract, which would negatively impact our Company’s revenue. |
Outreachmama.com – Managed Property
| · | SEO Services Industry Growth. The SEO Services industry is significant and expected to continue growing over the next 5 years. In the event this industry’s growth does not occur as expected, or occurs slower than expected the popularity of Outreachmama.com’s services could decrease, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
|
|
|
| · | Dissatisfaction With Our services. Our Company manages the Outreachmama.com website pursuant to a fee-based contract where we earn fixed revenue and profit share. In the event the owner of the website becomes dissatisfied with our management services or no longer considers the cost of our management services fee to have sufficient value, the website could terminate our management contract, which would negatively impact our Company’s revenue. |
| 23 |
| Table of Contents |
Getmerankings.com – Managed Property
| · | SEO Services Industry Growth. The SEO Services industry is significant and expected to continue growing over the next 5 years. In the event this industry’s growth does not occur as expected or occurs slower than expected the popularity of Getmerankings.com’s services could decrease, which in turn could negatively impact the website’s revenue generation and our Company’s revenue. |
|
|
|
| · | Dissatisfaction With Our services. Our Company manages the Getmerankings.com website pursuant to a fee-based contract where we earn fixed revenue and profit share. In the event the owner of the website becomes dissatisfied with our management services or no longer considers the cost of our management services fee to have sufficient value, the website could terminate our management contract, which would negatively impact our Company’s revenue. |
Risks Related to Our Business – Operating Our Online Businesses
If we are unable to attract new customers and retain customers on a cost-effective basis, our business and results of operations will be affected adversely.
To succeed, we must attract and retain customers on a cost-effective basis. We rely on a variety of methods to attract new customers, such as paying providers of online services, search engines, directories and other online businesses to provide content, advertising banners and other links that direct customers to our website, direct sales and partner sales. If we are unable to use any of our current marketing initiatives or the cost of such initiatives were to significantly increase or such initiatives or our efforts to satisfy our existing customers are not successful, we may not be able to attract new customers or retain customers on a cost-effective basis and, as a result, our revenue and results of operations would be affected adversely.
Additionally, factors outside of our control, such new terms, conditions, policies, or other changes made by the online services, search engines, directories and other online businesses that we rely upon to attract new customers could cause our online businesses to experience short- or long-term business disruptions, which could adversely affect our revenue and results of operations.
If we fail to develop our brands cost-effectively, our business may be adversely affected.
Successful promotion of our Company’s brands will depend largely on the effectiveness of our marketing efforts and on our ability to provide reliable and useful products and services at competitive prices. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brands. If we fail to successfully promote and maintain our brands or incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may fail to attract enough new customers or retain existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, and our business and results of operations could suffer.
The market in which our online businesses participate is competitive and, if we do not compete effectively, our operating results could be harmed.
The market for our online businesses’ goods and services is competitive and rapidly changing, and the barriers to entry are relatively low. With the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales, limit customer attrition and maintain our prices. Competition could result in reduced sales, reduced margins or the failure of our products and services to achieve or maintain more widespread market acceptance, any of which could harm our business. We compete with large established online businesses possessing large, existing customer bases, substantial financial resources and established distribution channels, as well as smaller less established online businesses. If either of these types of competitors decide to develop, market or resell competitive services, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed. Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their products and services. Our current and potential competitors have more extensive customer bases and broader customer relationships than we have. If we are unable to compete with such companies, the demand for our products could substantially decline.
| 24 |
| Table of Contents |
Risks Related to Our Business – Our Acquisition Plans
As part of our business plan, we will continue to acquire or make investments in other companies, or through business relationships, which will divert our management’s attention, result in dilution to our stockholders, consume resources that may be necessary to sustain our business and could otherwise disrupt our operations and adversely affect our operating results.
As part of our business plan, we will continue to acquire or invest in online businesses, applications and services or technologies that we believe could offer growth opportunities or complement or expand our business or otherwise. The pursuit of target online businesses will divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
As we acquire additional online businesses, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from the acquired business or investments in other companies, due to a number of factors, including:
| · | inability to integrate or benefit from acquired technologies or services in a profitable manner; |
| · | unanticipated costs or liabilities associated with the acquisition; |
| · | difficulty integrating the accounting systems, operations and personnel of the acquired business; |
| · | difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; |
| · | difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; |
| · | diversion of management’s attention from other business concerns; |
| · | adverse effects to our existing business relationships with business partners and customers as a result of the acquisition; |
| · | the potential loss of key employees; |
| · | use of resources that are needed in other parts of our business; and |
| · | use of substantial portions of our available cash to consummate the acquisition. |
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. If future acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process and this could adversely affect our results of operations.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
Pursuant to our long-term investment strategy, we may pursue future acquisitions or business relationships, or make business dispositions that may not be in the best interest of common stockholders in near term or at all.
As part of long-term investment strategy, we will continue to acquire or invest in online businesses, applications and services or technologies that we believe could complement or expand our services or otherwise offer growth opportunities in the long run. We may incur indebtedness for future acquisitions, which would be senior to our shares. Future acquisitions may also reduce our cash available for distribution to our stockholders, including holders of our common shares and series A preferred stock, following such acquisitions. To the extent such acquisitions do not perform as expected, such risk may be particularly heightened. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
| 25 |
| Table of Contents |
In addition to acquiring online businesses, we may sell those online businesses that we own from time to time when attractive opportunities arise that outweigh the future growth and value that we believe we will be able to bring to such online businesses consistent with our long-term investment strategy. As such, our decision to sell a business will be based on our belief that doing so will increase stockholder value to a greater extent than through our continued ownership of that business. Future dispositions of online businesses may reduce our cash flows from operations. We cannot assure you that we will use the proceeds from any future dispositions in a manner with which you agree. You will generally not be entitled to vote with respect to our future acquisitions or dispositions, and we may pursue future acquisitions or dispositions with which you do not agree.
Because of our limited resources and the significant competition for acquisition opportunities, it may be more difficult for us to acquire target online businesses that meet our acquisition criteria.
We expect to encounter competition from other companies having a business plan similar to ours, including private investors (which may be individuals or investment partnerships), blank check companies and other entities, domestic and international, competing for the types of online businesses we intend to acquire. Many of these individuals and entities are well- established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target online businesses we could potentially acquire, our ability to compete with respect to the acquisition of certain target online businesses that are attractive to us will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain online businesses. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
Subsequent to the acquisition of any target business, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities.
Even if we conduct extensive due diligence on a target website that we acquire, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets or incur impairment or other charges that could result in our reporting losses. Management has a process to evaluate the viability and profitability of each business. If and when management concludes that a business has a significantly reduced future value, management will assess the asset for possible impairment in the quarter management reaches that conclusion. During the year ended December 31, 2025, the Company recognized impairment losses of approximately $217,000 related to allthingsdogs.com and approximately $223,000 related to DDS Rank, respectively. So, even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the acquisition transaction or thereafter. Accordingly, we could experience a significant negative effect on our financial condition, results of operations and the price of our securities. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
We may seek target online businesses in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a target business outside of our management’s areas of expertise if a target business is presented to us and we determine that such business offers an attractive acquisition opportunity for our Company. Although our management will endeavor to evaluate the risks inherent in any particular acquisition candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
| 26 |
| Table of Contents |
We will likely not obtain an opinion from an independent accounting or investment banking firm in connection with the acquisition of a target business.
We will likely not obtain an opinion from an independent accounting firm or independent investment banking firm that the price we are paying for a target business is fair to our stockholders. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors (“Board”), who will determine fair market value based on standards generally accepted by the financial community.
Our resources could be wasted by acquisition transactions that are not completed.
The investigation of each target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require management time and attention and costs for accountants, attorneys and others. If we decide not to complete a specific acquisition transaction, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our acquisition transaction for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
The officers and directors of a target business may resign upon completion of our acquisition. The loss of a target business’ key personnel could negatively impact the operations and profitability of the target business post-acquisition.
The role of a target business’ key personnel upon the completion of our acquisition transaction cannot be ascertained at this time. Although we contemplate that certain members of a target business’ management team will remain associated with the target business following our acquisition transaction, it is possible that members of the management of a target business will not remain in place. The loss of a target business’ key personnel could negatively impact the operations and profitability of the target business post-acquisition. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
We may attempt to simultaneously acquire multiple target online businesses, which may give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several online businesses that are owned by different sellers, we will face risks including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired online businesses into our Company. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. As of the date of this Report on Form 10-K, we have no agreements to make any additional acquisitions.
We intend to pursue and acquire target businesses located outside of the United States so we will be subject to a variety of additional risks that may adversely affect us.
We do not plan to acquire any entity with its principal business operations in China (including Hong Kong) but may acquire target online businesses with operations or opportunities outside of the United States, we may face additional burdens in connection with investigating, agreeing to and completing such acquisition transactions, and we would be subject to a variety of additional risks that may negatively impact our operations. If we pursue target online businesses with operations or opportunities outside of the United States, we would be subject to risks associated with cross-border acquisition transactions, including in connection with investigating, agreeing to and completing our acquisition transaction, conducting due diligence in a foreign jurisdiction, having such transactions approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates. If we acquire such a business, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
| · | costs and difficulties inherent in managing cross-border business operations; |
| · | rules and regulations regarding currency redemption; |
| · | complex corporate withholding taxes on individuals; |
| · | laws governing the manner in which future partnering transactions may be effected; |
| · | tariffs and trade barriers; |
| · | regulations related to customs and import/export matters; |
| 27 |
| Table of Contents |
| · | local or regional economic policies and market conditions; |
| · | unexpected changes in regulatory requirements; |
| · | challenges in managing and staffing international operations; |
| · | longer payment cycles; |
| · | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
| · | currency fluctuations and exchange controls; |
| · | rates of inflation; |
| · | challenges in collecting accounts receivable; |
| · | cultural and language differences; |
| · | employment regulations; |
| · | underdeveloped or unpredictable legal or regulatory systems; |
| · | corruption; |
| · | protection of intellectual property; |
| · | social unrest, crime, strikes, riots and civil disturbances; |
| · | regime changes and political upheaval; |
| · | terrorist attacks and wars; and |
| · | deterioration of political relations with the United States. |
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete the acquisition transaction, or, if we complete the acquisition transaction, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
Risks Related to our Digital Assets Treasury Strategy
Our investments in digital assets subject us to significant volatility and potential losses.
We have used approximately $2.44 million of the net proceeds from the Senior Secured Notes to purchase digital assets, including Ethereum, Solana and Bitcoin. Digital assets are highly volatile and have experienced significant price fluctuations over short periods of time. As a result, the value of our holdings may decline materially, which could require us to recognize impairment charges or realized losses and could adversely affect our financial condition and results of operations. The digital asset market is relatively new and operates with limited regulatory oversight compared to traditional financial markets. Prices may be influenced by factors beyond our control, including regulatory developments, market sentiment, technological changes, cybersecurity incidents, and the financial condition or failure of major market participants. In addition, digital assets may be less liquid than other investments, and we may be unable to sell our holdings at favorable prices, or at all, during periods of market disruption. Accordingly, our digital asset strategy exposes us to risks that could materially and adversely impact our business and financial results.
We face risks relating to the custody and security of our digital assets, including the potential loss or compromise of private keys and cyberattacks.
We hold digital assets, including Ethereum, Solana and Bitcoin, with third-party custodians that are responsible for safeguarding the associated private keys. The insurance maintained by such custodians, if any, may cover only a limited portion of the value of our digital asset holdings, and there can be no assurance that such coverage will be adequate or maintained. Digital assets are controllable only by the holder of the applicable public and private keys. While public keys are recorded on the blockchain, private keys must be securely maintained to prevent unauthorized access. If the private keys associated with our digital asset holdings are lost, destroyed, or otherwise compromised, and no backup is available, we may permanently lose access to some or all of our digital assets. In addition, digital asset custodians, wallets and related technologies have been subject to cyberattacks, security breaches and other malicious activities, and may be vulnerable to future incidents. Any such loss, theft or compromise could result in significant financial loss and materially and adversely affect our business and financial condition.
| 28 |
| Table of Contents |
Our increased digital assets holdings have required substantial changes in our day-to-day operations and have exposed and continue to expose us to significant operational risks.
Our increased digital assets holdings since the third quarter of 2025 exposed, and continues to expose, us to significant operational risks. Digital assets’ PoS consensus mechanism requires that we operate validator nodes, employ secure key management and implement slashing protection. It also requires that we maintain constant up time to ensure that we are eligible for staking rewards and to avoid penalties. In addition, the digital assets ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and it could cause temporary service disruptions. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute our digital assets strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.
Our common stock may trade at a substantial premium or discount to the value of the digital assets we hold, and our stock price may be more volatile than the price of digital assets.
The market price of our common stock reflects many factors that do not affect the spot price of our digital assets and may therefore diverge materially—positively or negatively—from the per-share value of our digital assets holdings (net of cash, other assets and liabilities). These factors include, among others: our corporate-level expenses; taxes; the timing, size and pricing of equity or debt financings (including at-the-market offerings or convertible securities), equity awards and other sources of dilution; expectations about our future purchases or sales of digital assets, staking activity or special distributions; our liquidity, public float, short interest and securities lending/borrow dynamics; the availability and pricing of exchange-listed alternatives (such as exchange-traded products holding digital assets) and differences between those vehicles and a corporate issuer (including the absence in our case of an in-kind creation/redemption mechanism that can reduce premiums/discounts); differences in trading hours and market microstructure between our common stock and spot markets for digital assets; changes in index inclusion, analyst coverage or investor sentiment toward us as an operating company; our corporate governance, financial reporting and any actual or perceived operational, custody, technology or regulatory risks specific to us; and broader equity-market conditions independent of crypto-asset markets. As a result, our stock may trade at a premium or discount to the value of our digital assets holdings for extended periods, and may be more volatile than the price of our digital assets . Accordingly, investors could lose all or a substantial part of their investment even if the market price of our digital assets does not decline, and may not benefit commensurately from increases in the market price of our digital assets.
Digital assets have a limited operating history and are highly volatile, and volatility in the price of our digital assets could materially adversely affect our financial results and the market price of our common stock.
Digital assets are a highly volatile asset, and fluctuations in the prices of digital assets are likely to influence our financial results and the market price of our common stock. The market value of digital assets is not related to any specific company, government or asset. The valuation of digital assets depends on a number of factors, including future expectations for the value of the digital asset networks, the number of digital assets transactions and the overall usage of digital assets as an asset. A significant portion of digital assets’ value is speculative and depends on factors such as expectations regarding the digital asset networks, transaction activity and broader adoption, which contributes to price volatility.
Our digital asset treasury strategy has a limited operating history and may not perform as we expect across different market conditions. If the price of our digital assets decreases materially or we are unable to execute our treasury strategy (including acquiring, holding, and staking our digital assets) as intended, our financial condition, results of operations, and the market price of our common stock could be materially adversely affected. Our ability to pursue this strategy also depends, in significant part, on our ability to raise capital on acceptable terms.
| 29 |
| Table of Contents |
Our financial results and the market price of our common stock would be adversely affected, and our business and financial condition would be negatively impacted if the price of our digital assets decreased substantially, including as a result of:
| · | decreased user and investor confidence in digital assets, including due to the various factors described herein; |
|
|
|
| · | investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors; (ii) actual or expected significant dispositions of digital assets by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of digital assets associated with significant hacks, seizures, or forfeitures; and (iii) actual or perceived manipulation of the spot or derivative markets for digital assets or spot digital assets exchange-traded products (“ETPs”); |
|
|
|
| · | negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, digital assets or the broader digital assets industry, for example, (i) public perception that digital assets can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major digital asset participants; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; (iv) the actual or perceived environmental impact of digital assets and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the digital assets related processes; and (v) changes in government regulations; |
|
|
|
| · | changes in consumer preferences and the perceived value or prospects of digital assets; |
|
|
|
| · | a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for digital assets purchase and sale transactions to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of our digital assets or adversely affect investor confidence in digital assets generally; |
|
|
|
| · | macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations; |
|
|
|
| · | changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes, the adverse impacts attributable to the current conflict between the U.S/Israel and Iran, Russia and Ukraine and the economic sanctions adopted in response to the conflict, the broadening of the U.S/Israel and Iran conflict to other countries in the Middle East and the ongoing situation in Venezuela. |
Security breaches or cyberattacks could result in loss of our digital assets.
Substantially all of the digital assets we own are held in custody accounts at institutional-grade digital asset custodians. Security breaches and cyberattacks are of particular concern with respect to our digital assets activities. A successful security breach or cyberattack could result in:
| · | a partial or total loss of our digital assets in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our digital assets or other agreements with third-party platforms and service providers; |
|
|
|
| · | harm to our reputation and brand; |
|
|
|
| · | improper disclosure of data and violations of applicable data privacy and other laws; or significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure. |
| 30 |
| Table of Contents |
In addition, the digital asset networks and the digital asset service providers we rely on depend on Internet connectivity and the integrity of Internet routing. Denial-of-service attacks can cause temporary delays in block creation and transfers. Border gateway protocol hijacking, or BGP hijacking, may allow an attacker to intercept or reroute traffic, isolate portions of the network, and increase the risk of double-spending or other security failures. Any such disruption could impair our ability to transfer our digital assets, disrupt staking or other treasury activities, reduce confidence in digital assets, and adversely affect the price of our digital assets and the market price of our common stock.
Cyberattacks are increasing in frequency, persistence, and sophistication, including by well-funded and organized groups and state actors. The methods used to obtain unauthorized access to systems and information, disrupt services, or sabotage operations evolve rapidly and may be difficult to detect, and attacks may target our systems or those of our third-party service providers and partners. We may experience breaches due to human error, malfeasance, insider threats, or system vulnerabilities, including through hacking, social engineering, phishing, and fraud. Certain threats may remain dormant or undetected for extended periods, and remote-work arrangements and geopolitical conflicts may increase cybersecurity risks.
Digital asset transactions generally are not reversible without the consent and active participation of the recipient (or, in theory, control or consent of a majority of the network’s processing power). As a result, if unauthorized parties obtain access to our digital assets, compromise private keys or other credentials, or effect an unauthorized or erroneous transfer, whether through compromise of our systems or those of our custodians, staking providers, execution partners, or other third parties, we may be unable to recover the affected digital assets , or otherwise unwind or remediate unauthorized or erroneous transactions in a timely manner. Any such loss could materially and adversely affect our business, financial condition, and results of operations.
A “fork” in the network protocols could adversely affect the value of our digital assets holdings.
The digital asset networks operate using open-source protocols, meaning that any user can become a node and participating in the network, and no permission of a central authority or body is needed to do so. In addition, anyone can propose a modification to a network’s source code and then propose that the respective network community support the modification. These proposed modifications to the network’s source code, if adopted, can lead to forks.
Forks in the digital asset protocols may lead to disruptions, security risks or declines in our digital assets value. A “fork” occurs when a change to the digital asset network’s source code creates two incompatible versions of the blockchain, resulting in separate networks. Forks may be planned (e.g., upgrades to the Ethereum protocol like the Merge or Dencun) or unplanned (e.g., due to software bugs or validator disagreement). Planned forks are designed to improve performance or introduce new features, but they may introduce bugs, security vulnerabilities, or unexpected economic consequences. Unplanned forks can arise from client software inconsistencies or protocol failures, causing network instability or fragmentation. In either case, forks may result in operational outages, user confusion, replay attacks and reduced validator participation, all of which could adversely affect the price of our digital assets. Our digital assets holdings, staking activities and related treasury strategy could be materially negatively impacted in the event of such a fork.
| 31 |
| Table of Contents |
Risks Related to Information Technology Systems, Intellectual Property and Privacy Laws
We are reliant upon information technology to operate our business and maintain our competitiveness.
Our ability to leverage our technology and data scale is critical to our long-term strategy. Our business increasingly depends upon the use of sophisticated information technologies and systems, including technology and systems (cloud solutions, mobile and otherwise) utilized for communications, marketing, productivity tools, training, lead generation, records of transactions, business records (employment, accounting, tax, etc.), procurement and administrative systems. The operation of these technologies and systems is dependent upon third-party technologies, systems and services, for which there are no assurances of continued or uninterrupted availability and support by the applicable third-party vendors on commercially reasonable terms. We also cannot assure that we will be able to continue to effectively operate and maintain our information technologies and systems. In addition, our information technologies and systems are expected to require refinements and enhancements on an ongoing basis, and we expect that advanced new technologies and systems will continue to be introduced. We may not be able to obtain such new technologies and systems, or to replace or introduce new technologies and systems as quickly as our competitors or in a cost-effective manner. Also, we may not achieve the benefits anticipated or required from any new technology or system, and we may not be able to devote financial resources to new technologies and systems in the future.
Any significant disruption in service on our website or in our computer systems, or in our customer support services, could reduce the attractiveness of our services and result in a loss of customers.
The satisfactory performance, reliability and availability of our services are critical to our operations, level of customer service, reputation and ability to attract new customers and retain customers. Most of our computing hardware is co-located in third-party hosting facilities. None of the companies who host our systems guarantee that our customers’ access to our products will be uninterrupted, error-free or secure. Our operations depend on their ability to protect their and our systems in their facilities against damage or interruption from natural disasters, power or telecommunications failures, air quality, temperature, humidity and other environmental concerns, computer viruses or other attempts to harm our systems, criminal acts and similar events. If our arrangements with third-party data centers are terminated, or there is a lapse of service or damage to their facilities, we could experience interruptions in our service as well as delays and additional expense in arranging new facilities. Any interruptions or delays in access to our services, whether as a result of a third-party error, our own error, natural disasters or security breaches, whether accidental or willful, could harm our relationships with customers and our reputation. These factors could damage our brand and reputation, divert our employees’ attention, reduce our revenue, subject us to liability and cause customers to cancel their accounts, any of which could adversely affect our business, financial condition and results of operations.
We do not have a disaster recovery system, which could lead to service interruptions and result in a loss of customers.
Although we have all of our websites and other data backed up with multiple services, we do not have any disaster recovery systems. In the event of a disaster in which our software or hardware are irreparably damaged or destroyed, we would experience interruptions in access to our services. Any or all these events could cause our customers to lose access to our services.
If a third party asserts that we are infringing its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation or require us to obtain expensive licenses, and our business may be adversely affected.
The online industry is characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. Third parties may assert patent and other intellectual property infringement claims against us in the form of lawsuits, letters or other forms of communication. These claims, whether or not successful, could:
| · | divert management’s attention; |
| · | result in costly and time-consuming litigation; |
| · | require us to enter into royalty or licensing agreements, which may not be available on acceptable terms, or at all; |
| · | in the case of any open-source software related claims, require us to release our software code under the terms of an open-source license; or |
| · | require us to redesign our software and services to avoid infringement. |
| 32 |
| Table of Contents |
As a result, any third-party intellectual property claims against us could increase our expenses and adversely affect our business. Even if we have not infringed any third parties’ intellectual property rights, we cannot be sure our legal defenses will be successful, and even if we are successful in defending against such claims, our legal defense could require significant financial resources and management time. Finally, if a third party successfully asserts a claim that our products infringe its proprietary rights, royalty or licensing agreements might not be available on terms we find acceptable or at all and we may be required to pay significant monetary damages to such third party.
If the security of our customers’ confidential information stored in our systems is breached or otherwise subjected to unauthorized access, our reputation may be severely harmed, we may be exposed to liability and we may lose the ability to offer our customers a credit card payment option.
Our system stores our customers’ proprietary email distribution lists, credit card information and other critical data. Any accidental or willful security breaches or other unauthorized access could expose us to liability for the loss of such information, adverse regulatory action by federal and state governments, time-consuming and expensive litigation and other possible liabilities as well as negative publicity, which could severely damage our reputation. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to any of our customers’ data, our relationships with our customers will be severely damaged, and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our third-party hosting facilities may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, many states have enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach often lead to widespread negative publicity, which may cause our customers to lose confidence in the effectiveness of our data security measures. Any security breach, whether actual or perceived, would harm our reputation, and we could lose customers and fail to acquire new customers.
If we fail to maintain our compliance with the data protection policy documentation standards adopted by the major credit card issuers, we could lose our ability to offer our customers a credit card payment option. Any loss of our ability to offer our customers a credit card payment option would make our products less attractive to many small organizations by negatively impacting our customer experience and significantly increasing our administrative costs related to customer payment processing.
We may be the subject of intentional cyber disruptions and attacks.
We expect to be an ongoing target of attacks specifically designed to impede the performance of our products and services. Experienced computer programmers, or hackers, may attempt to penetrate our network security or the security of our data centers and IT environments. These hackers, or others, which may include our employees or vendors, may cause interruptions of our services. Although we continually seek to improve our countermeasures to prevent and detect such incidents, if these efforts are not successful, our business operations, and those of our customers, could be adversely affected, losses or theft of data could occur, our reputation and future sales could be harmed, governmental regulatory action or litigation could be commenced against us and our business, financial condition, operating results and cash flow could be materially adversely affected.
We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products and services which would harm our competitive position.
Our success, in part, depends upon our proprietary technology. We have various forms of intellectual property including copyright, trademark, confidentiality procedures and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We also pursue the registration of our domain names, trademarks, and service marks in the United States. If we file patent applications, we cannot assure you that any of the patent applications that we file will ultimately result in an issued patent or, if issued, that they will provide sufficient protections for our technology against competitors. We cannot assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property rights we hold.
| 33 |
| Table of Contents |
We could be harmed by improper disclosure or loss of sensitive or confidential data.
Our business operations require us to process and transmit data. Unauthorized disclosure or loss of sensitive or confidential data may occur through a variety of methods. These include, but are not limited to, systems failure, employee negligence, fraud or misappropriation, or unauthorized access to or through our information systems, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/or state-sponsored organizations, who may develop and deploy viruses, worms or other malicious software programs.
Such disclosure, loss or breach could harm our reputation and subject us to government sanctions and liability under laws and regulations that protect sensitive or personal data and confidential information, resulting in increased costs or loss of revenues. It is possible that security controls over sensitive or confidential data and other practices we and our third-party vendors follow may not prevent the improper access to, disclosure of, or loss of such information. The potential risk of security breaches and cyberattacks may increase as we acquire additional business and introduce new services and offerings. Further, data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions in which our online businesses operate. Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personal information or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment to our reputation in the marketplace.
Unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services could have a material adverse effect on our business.
Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, and the increased sophistication and activity of organized crime, hackers, terrorists, activists, cybercriminals and other external parties, some of which may be linked to terrorist organizations or hostile foreign governments. Cybersecurity attacks are becoming more sophisticated and include malicious attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data, substantially damaging our reputation. Our security systems are designed to maintain the security of our users’ confidential information, as well as our own proprietary information. Accidental or willful security breaches or other unauthorized access by third parties or our employees, our information systems or the systems of our third-party providers, or the existence of computer viruses or malware in our or their data or software could expose us to risks of information loss and misappropriation of proprietary and confidential information, including information relating to our products or customers and the personal information of our employees.
In addition, we could become subject to unauthorized network intrusions and malware on our own IT networks. Any theft or misuse of confidential, personal or proprietary information as a result of such activities or failure to prevent security breaches could result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, difficulty in marketing our products, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of such information, as well as fines and other sanctions resulting from any related breaches of data privacy regulations, any of which could have a material adverse effect on our reputation, business, profitability and financial condition. Furthermore, the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, and we may be unable to anticipate these techniques or to implement adequate preventative measures.
We may be subject to stringent and changing laws, regulations, standards, and contractual obligations related to privacy, data protection, and data security. Our actual or perceived failure to comply with such obligations could adversely affect our business.
We receive, collect, store, and process certain personally identifiable information about individuals and other data relating to our customers. We have legal and contractual obligations regarding the protection of confidentiality and appropriate use of certain data, including personally identifiable and other potentially sensitive information about individuals. We may be subject to numerous federal, state, local, and international laws, directives, and regulations regarding privacy, data protection, and data security and the collection, storing, sharing, use, processing, transfer, disclosure, disposal and protection of information about individuals and other data, the scope of which are changing, subject to differing interpretations, and may be inconsistent among jurisdictions or conflict with other legal and regulatory requirements. We strive to comply with our applicable data privacy and security policies, regulations, contractual obligations, and other legal obligations relating to privacy, data protection, and data security. However, the regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other legal obligations or our practices. Further, any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, security, processing, transfer or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of users or other data subjects for the collection, use, retention, security, processing, transfer or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable to complete, and may limit our ability to receive, collect, store, process, transfer, and otherwise use user data or develop new services and features.
| 34 |
| Table of Contents |
If we are found in violation of any applicable laws or regulations relating to privacy, data protection, or security, our business may be materially and adversely affected and we would likely have to change our business practices and potentially the services and features, integrations or other capabilities of our websites. In addition, these laws and regulations could impose significant costs on us and could constrain our ability to use and process data in a commercially desirable manner. In addition, if a breach of data security were to occur or be alleged to have occurred, if any violation of laws and regulations relating to privacy, data protection or data security were to be alleged, or if we were to discover any actual or alleged defect in our safeguards or practices relating to privacy, data protection, or data security, our business websites may be perceived as less desirable and our business, financial condition, results of operations and growth prospects could be materially and adversely affected.
We also expect that there will continue to be new laws, regulations, and industry standards concerning privacy, data protection, and information security proposed and enacted in various jurisdictions. For example, the California Consumer Privacy Act (“CCPA”), which came into force in 2020, provides data privacy rights for California consumers and operational requirements for covered companies. Specifically, the CCPA mandates that covered companies provide disclosures to California consumers and afford such consumers data privacy rights that include, among other things, the right to request a copy from a covered company of the personal information collected about them, the right to request deletion of such personal information, and the right to request to opt-out of certain sales of such personal information. The California Attorney General can enforce the CCPA, including seeking an injunction and civil penalties for violations. The CCPA also provides a private right of action for certain data breaches that is expected to increase data breach litigation. Additionally, on January 1, 2023, the California Privacy Rights Act (“CPRA took effect and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain personal information and creating a new state agency to oversee implementation and enforcement efforts, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. In addition to California, the following states have enacted laws that are either currently in effect or becoming effective this year: Virginia, Colorado, Connecticut, Utah, Texas, Oregon, Montana, Florida, Delaware, Iowa, Nebraska, New Hampshire, New Jersey, Tennessee, Minnesota, Maryland, Indiana, Kentucky, Rhode Island and Arkansas (effective July 2026). This trend toward more stringent privacy legislation in the United States could increase our potential liability and adversely affect our business since the additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, which could impact strategies and availability of previously useful data and result in increased compliance costs and/or changes in business practices and policies.
Various U.S. federal privacy laws are potentially relevant to our business, including the Federal Trade Commission Act, Controlling the Assault of Non-Solicited Pornography and Marketing Act, the Family Educational Rights and Privacy Act, the Children’s Online Privacy Protection Act, and the Telephone Consumer Protection Act. Any actual or perceived failure to comply with these laws could result in a costly investigation or litigation resulting in potentially significant liability, injunctions and other consequences, loss of trust by our users, and a material and adverse impact on our reputation and business.
In addition, the data protection landscape in the EU is continually evolving, resulting in possible significant operational costs for internal compliance and risks to our business. The EU adopted the General Data Protection Regulation (“GDPR”), which became effective in May 2018, and contains numerous requirements and changes from previously existing EU laws, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies. Further, The EU AI Act, which takes full effect August 2, 2026, is designed to complement the GDPR by requiring transparency in AI-driven decisions.
| 35 |
| Table of Contents |
Among other requirements, the GDPR regulates the transfer of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States. Recent legal developments in Europe have created complexity and uncertainty regarding such transfers. For instance, on July 16, 2020, the Court of Justice of the European Union (the “CJEU”) invalidated the EU-U.S. Privacy Shield Framework (the “Privacy Shield”) under which personal data could be transferred from the European Economic Area to U.S. entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism and potential alternative to the Privacy Shield), it made clear that reliance on such clauses alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, including, in particular, applicable surveillance laws and rights of individuals, and additional measures and/or contractual provisions may need to be put in place; however, the nature of these additional measures is currently uncertain. The CJEU also states that if a competent supervisory authority believes that the standard contractual clauses cannot be complied with in the destination country and that the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer.
Additionally, the GDPR greatly increased the European Commission’s jurisdictional reach of its laws and added a broad array of requirements for handling personal data. EU member states are tasked under the GDPR to enact, and have enacted, certain implementing legislation that adds to and/or further interprets the GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. The GDPR, together with national legislation, regulations and guidelines of the EU member states governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, use, retain, protect, disclose, transfer and otherwise process personal data. In particular, the GDPR includes obligations and restrictions concerning the consent and rights of individuals to whom the personal data relates, security breach notifications and the security and confidentiality of personal data.
Failure to comply with the GDPR could result in penalties for noncompliance (including possible fines of up to the greater of €20 million and 4% of our global annual turnover for the preceding financial year for the most serious violations, as well as the right to compensation for financial or non-financial damages claimed by individuals under Article 82 of the GDPR).
Further, the United Kingdom enacted a Data Protection Act substantially implementing the GDPR (“U.K. GDPR”), effective in May 2018, which substantially aligns with the GDPR. It is unclear how U.K. data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated. Some countries also are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services. Since 2021, when the transitional period following Brexit expired, we are required to comply with both the GDPR and the U.K. GDPR, with each regime having the ability to fine up to the greater of €20 million (in the case of the GDPR) or £17 million (in the case of the U.K. GDPR) and 4% of total annual revenue. The relationship between the United Kingdom and the EU in relation to certain aspects of data protection law remains unclear, including, for example, how data transfers between EU member states and the United Kingdom will be treated and the role of the United Kingdom’s Information Commissioner’s Office following the end of the transitional period. These changes could lead to additional costs and increase our overall risk exposure.
Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users, or any other legal obligations or regulatory requirements relating to privacy, data protection, or data security, may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups, or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, other obligations, and policies that are applicable to the businesses of our users may limit our business operations. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.
| 36 |
| Table of Contents |
Online applications are subject to various laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an increased risk of litigation and regulatory actions.
A variety of laws and regulations have been adopted in recent years aimed at protecting children using the internet such as the Children’s Online Privacy Protection Act (COPPA), a U.S. federal law and Article 8 of the GDPR. We implement certain precautions to ensure that we do not knowingly collect personal information from children under the age of 13 through our websites. Despite our efforts, no assurances can be given that such measures will be sufficient to completely avoid allegations of COPPA violations, any of which could expose us to significant liability, penalties, reputational harm and loss of revenue, among other things. Additionally, new regulations are being considered in various jurisdictions to require the monitoring of user content or the verification of users’ identities and age. Such new regulations, or changes to existing regulations, could increase the cost of our operations.
Risks Related to Owning Our Securities
The market for our common stock, publicly-traded warrants and series A preferred stock could be considered “thinly-traded,” and an active market in securities may never fully develop.
Our common stock and publicly-traded warrants were listed and began trading on the Nasdaq Capital Market on August 26, 2022, under the symbols “ONFO” and “ONFOW,” respectively. Our series A preferred stock became quoted and began trading on the OTCQB on October 30, 2024 under the symbol “ONFOP.” Prior to these listings or quotations, there was no public market for these securities. Despite certain increases of trading volume from time to time, there have been periods when the market for our securities could be considered “thinly-traded,” meaning that the number of persons interested in purchasing our securities at or near bid prices at any given time may be relatively small. Any event or events that could cause current investors to sell our securities could place downward pressure on the trading price of our securities and the trading price of our securities could decline, meaning that you may experience a decrease in the value of your common stock and publicly-traded warrants regardless of our operating performance or prospects.
The price of our securities may fluctuate substantially.
You should consider an investment in our securities to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuations in the market value of your investment. Some factors that may cause the market price of our securities to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this Report on Form 10-K, are:
| · | sale of our common stock by our stockholders, executives, and directors; |
| · | volatility and limitations in trading volumes of our shares of securities; |
| · | our ability to obtain financing; |
| · | the timing and success of introductions of new products by us or our competitors or any other change in the competitive dynamics of our business’ industries; |
| · | our ability to attract new customers; |
| · | changes in our capital structure or dividend policy, future issuances of securities, dilution, sales of large blocks of securities by our stockholders; |
| · | our cash position; |
| · | announcements and events surrounding financing efforts, including debt and equity securities; |
| · | our inability to enter into new markets or develop new products; |
| · | reputational issues; |
| · | announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; |
| · | changes in general economic, political and market conditions in or any of the regions in which we conduct our business; |
| · | changes in industry conditions or perceptions; |
| · | analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; |
| · | departures and additions of key personnel; |
| · | disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; |
| · | changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and |
| · | other events or factors, many of which may be out of our control. |
| 37 |
| Table of Contents |
In addition, if the market for securities in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our securities could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
Our Company’s series A preferred stock is senior in rank to shares of our common stock with respect to dividends, liquidation and dissolution.
We have 1,000,000 shares of series A preferred stock reserved pursuant to an ongoing concurrent private offering of series A preferred stock. As of the date of this Report on Form 10-K, 169,460 shares of series A preferred stock are issued and outstanding. The series A preferred is senior in rank to shares of common stock with respect to dividends, liquidation and dissolution. Each share of series A preferred carries an annual 12% cumulative, non-compounding dividend based on the cash amount invested into the series A preferred, payable quarterly. All accrued dividends on any shares of series A preferred stock shall be paid in cash only when, as and if declared by the Board out of funds legally available therefor or upon a liquidation or redemption of the shares of series A preferred stock in accordance with the liquidation and redemption provisions of the shares of series A preferred stock contained in the Company’s certificate of incorporation. Dividends on series A preferred will be paid prior to any dividends on any other class of shares, including common stock. In the event of any liquidation, dissolution or winding up of our Company, the proceeds shall be paid as follows: (i) first, pay the purchase price plus accrued dividends, on each share of series A preferred; and (ii) next, the balance of any proceeds shall be distributed pro rata to holders of common stock or other junior securities. Except as otherwise required by law, the series A preferred stock have no voting rights other than as provided by the provisions of our Company’s certificate of incorporation where the series A preferred will vote as a separate class. The series A preferred shall be redeemable at the option of our Company commencing any time after January 1, 2026 at a price equal to the purchase price ($25.00 per share as of the date hereof) plus accrued dividends, on each share of series A preferred. On or before 180 days following the sale of at least 600,000 shares of the series A preferred, our Company shall register the series A preferred by preparing and filing one registration statement, or if necessary more than one registration statement, of our Company in compliance with the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and thereafter apply to list the series A preferred stock on a U.S. stock exchange or develop a public trading market for the series A preferred stock by soliciting securities brokers to become market makers of the series A preferred on an established over the counter trading market, such as the OTC Markets. Our series A preferred stock became quoted and began trading on the OTCQB on October 30, 2024 under the symbol “ONFOP.”
We may not be able to maintain a listing of our common stock and publicly-traded warrants on Nasdaq. Currently, we are not in compliance with Nasdaq’s minimum bid price requirement, which means our common stock could be delisted, which could materially and adversely affect the liquidity and market value of our common stock.
Although our common stock and publicly-traded warrants are listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate Nasdaq’s listing requirements, or if we fail to meet any of Nasdaq’s listing standards, our common stock and publicly-traded warrants may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock and publicly-traded warrants from Nasdaq may materially impair our shareholders’ ability to buy and sell our common stock and publicly-traded warrants and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock and warrants. The delisting of our common stock and publicly-traded warrants could significantly impair our ability to raise capital and the value of your investment.
On January 6, 2026, our Company received a written notification (the “Notice”) from the Listing Qualifications Staff of Nasdaq stating that our Company is not in compliance with Nasdaq Listing Rule 5550(a)(2) because for the last 33 consecutive business days prior to that date the closing bid price of our Company’s common stock was below the $1.00 per share minimum required for continued listing on Nasdaq. To date, the Notice has no effect on the listing or trading of the Company’s common stock on the Nasdaq. However, Nasdaq Listing Rules provide the Company a compliance period of 180 calendar days (i.e., until July 6, 2026) in which to regain compliance, and the Company will regain compliance if the closing bid price of its common stock is $1.00 per share or higher for a minimum period of ten consecutive business days during this compliance period. In the event our Company does not regain compliance, our Company may be eligible for additional time. To qualify, our Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days. However, if it appears to the staff of Nasdaq that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice that its securities will be subject to delisting.
If we complete a reverse stock split, it may decrease the liquidity of our common stock and may not improve trading or investor interest.
The liquidity of our common stock may be adversely affected by a reverse stock split due to the reduced number of shares outstanding following its effectiveness, particularly if the market price of our common stock does not increase proportionately as a result of the reverse stock split. A reduction in the number of outstanding shares may decrease trading volume and increase price volatility. In addition, the reverse stock split may increase the number of stockholders who hold “odd lots” (fewer than 100 shares), which could result in higher transaction costs and greater difficulty in selling shares. Although we believe that a higher per-share price may improve the perception of our common stock and broaden potential investor interest, including from institutional investors, there can be no assurance that the reverse stock split will achieve these objectives. The resulting market price of our common stock may not attract new investors or satisfy the investment guidelines of institutional investors. Accordingly, the trading liquidity of our common stock may not improve and could decline.
The issuance of shares underlying the securities issued pursuant to the Senior Secured Notes and related Rights could result in very significant dilution to our existing stockholders and materially depress the market price of our common stock.
As of the date of this prospectus, we have 5,863,215 shares of common stock outstanding. However, pursuant to the Securities Purchase Agreement and the related Rights, if we elect to sell all $300,000,000 of the Senior Secured Notes pursuant to the Securities Purchase Agreement, assuming a default premium of 20% and the Floor Price of $0.22, we may issue up to 1,636,363,636 additional shares of common stock upon the conversion, exercise or settlement of the securities issued thereunder plus the number of shares derived by multiplying (x) the value (as determined in accordance with the Rights) of the cryptocurrency and/or Digital Assets purchased by the Company, from and after November 17, 2025, by (y) 20%, in accordance with the terms of the Securities Purchase Agreement. This number of shares is vastly greater than our currently outstanding shares and would result in extraordinary dilution to existing stockholders, substantially reducing their ownership and voting power. Because the conversion price and the Floor Price of the Senior Secured Notes and the conversion price of the Rights may be adjusted, the number of shares of common stock that will actually be issued may be more or less than the 1,636,363,636 additional shares of common stock described above. To date, we have sold an aggregate principal amount of $6,000,000 in Senior Secured Notes. Any issuance or resale of a substantial number of shares, or the perception that such issuances may occur, could materially depress the market price of our common stock, increase volatility, encourage short selling, and impair our ability to raise additional capital. Because the number of shares potentially issuable is extremely large relative to our current capitalization, investors should consider an investment in our securities to be highly dilutive.
| 38 |
| Table of Contents |
We may issue additional equity securities, or engage in other transactions that could dilute our book value or relative rights of our common stock and series A preferred stock, which may adversely affect the market price of our securities.
Our Board may determine from time to time that it needs to raise additional capital by issuing additional shares of our common stock, series A preferred stock or other securities. Except as otherwise described in this Report on Form 10-K, we will not be restricted from issuing additional common stock, including securities that are convertible into or exchangeable for, or that represent the right to receive, shares of our common stock, or series A preferred stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings, or the prices at which such offerings may be affected. Additional equity offerings may dilute the holdings of existing stockholders or reduce the market price of some of our securities, or all of them. Holders of our securities are not entitled to pre-emptive rights or other protections against dilution. New investors also may have rights, preferences and privileges that are senior to, and that adversely affect, then current holders of our securities. Additionally, if we raise additional capital by making offerings of debt or preferred shares, upon our liquidation, holders of our debt securities and preferred shares, and lenders with respect to other borrowings, may receive distributions of its available assets before the holders of our common stock. We currently have 1,000,000 shares of series A preferred stock reserved pursuant to an ongoing concurrent private offering of series A preferred stock. As of the date of this Report on Form 10-K, 169,460 shares of series A preferred stock are issued and outstanding. The series A preferred stock is senior in rank to shares of common stock with respect to dividends, liquidation and dissolution, but may not be senior in rank to other series of preferred stock that we may issue in the future.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future and, as such, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
We do not anticipate paying any cash dividends on our common stock for the foreseeable future. Our Company has never declared any cash dividends on its common stock. We currently intend to use all available funds and any future earnings for use in financing the growth of our business and to meet our series A preferred stock dividend obligations.
In addition, and any future loan arrangements we enter into may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
If research analysts do not publish research about our business or if they issue unfavorable commentary or downgrade our securities, our securities’ price and trading volume could decline.
The trading market for our securities may depend in part on the research and reports that research analysts publish about us and our business. If we do not maintain adequate research coverage, or if any of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, the price of our securities could decline. If one or more of our research analysts ceases to cover our business or fails to publish reports on us regularly, demand for our securities could decrease, which could cause the price of securities or trading volume to decline.
An investment in our warrants is speculative in nature and could result in a loss of your investment therein.
Our warrants do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock at a fixed price for a limited period of time. Our warrants are exercisable for five years from the date of initial issuance and currently have an exercise price of $2.50 per share. There can be no assurance that the market price of our shares of common stock will equal or exceed the exercise price of the warrants. In the event that the stock price of our shares of common stock does not exceed the exercise price of the warrants during the period when the warrants are held and exercisable, the warrants may not have any value to their holders.
The warrant certificate governing our warrants designates the state and federal courts of the State of New York sitting in the City of New York, Borough of Manhattan, as the exclusive forum for actions and proceedings with respect to all matters arising out of the warrants, which could limit a warrant holder’s ability to choose the judicial forum for disputes arising out of the warrants.
The warrant certificate governing our warrants provides that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by the warrant certificate (whether brought against a party to the warrant certificate or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the District of Delaware. The warrant certificate further provides that we and the warrant holders irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the District of Delaware for the adjudication of any dispute under the warrant certificate or in connection with it or with any transaction contemplated by it or discussed in it, including under the Securities Act. Furthermore, we and the warrant holders irrevocably waive, and agree not to assert in any suit, action or proceeding, any claim that we or they are not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. With respect to any complaint asserting a cause of action arising under the Securities Act or the rules and regulations promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
| 39 |
| Table of Contents |
Notwithstanding the foregoing, these provisions of the warrant certificate will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our warrants shall be deemed to have notice of and consented to the foregoing provisions. Although we believe this exclusive forum provision benefits us by providing increased consistency in the application of the governing law in the types of lawsuits to which it applies, the exclusive forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, other employees, stockholders, or others which may discourage lawsuits with respect to such claims. Our warrant holders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of this exclusive forum provision. Further, in the event a court finds the exclusive forum provision contained in our warrant certificates to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations.
Our series A preferred stock has not been rated.
We have not sought to have our series A preferred stock rated by any rating agency. Unrated securities are usually valued at a discount to similar, rated securities. As a result, there is a risk that our series A preferred stock may be valued or trade at a price that is lower than the shares might otherwise trade if rated by a rating agency. It is possible, however, that one or more rating agencies might independently determine to assign a rating to the series A preferred stock. In addition, we may elect in the future to obtain a rating of our series A preferred stock, which could adversely impact the market price of the series A preferred stock, or, we may elect to issue other securities for which we may seek to obtain a rating. Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on negative outlook or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. If any ratings are assigned to our series A preferred stock in the future or if we issue other securities with a rating, such ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or the value of our series A preferred stock or the trading price on any market on which it may trade. It is also possible that our series A preferred stock will never be rated.
Dividend payments on the series A preferred stock are not guaranteed.
Although dividends on our series A preferred stock are cumulative, our board of directors must approve the actual payment of the dividends. Our board of directors can elect at any time or from time to time, and for an indefinite duration, not to pay any or all accrued dividends. Our board of directors could elect to suspend dividends for any reason, and may be prohibited from approving dividends in the following instances:
| • | poor historical or projected cash flows; |
| • | the need to make payments on our indebtedness; |
| • | concluding that payment of distributions on the Series A preferred stock would cause us to breach the terms of any indebtedness or other instrument or agreement; or |
| • | determining that the payment of dividends would violate applicable law regarding unlawful distributions to shareholders. |
| 40 |
| Table of Contents |
We operate as a holding company dependent upon the assets and operations of our subsidiaries, and because of our structure, we may not be able to generate the funds necessary to make distributions on our series A preferred stock.
We generally operate as a holding company that conducts its businesses primarily through its subsidiaries. These subsidiaries conduct all of our operations and are our only sources of income. Accordingly, we are dependent on cash flows and payments of funds to us by our subsidiaries as distributions, loans, advances, leases or other payments from our subsidiaries to generate the funds necessary to make distributions or dividends on our securities. Our subsidiaries’ ability to pay such distributions and/or make such loans, advances, leases or other payments may be restricted by, among other things, applicable laws and regulations, current and future debt agreements and management agreements into which our subsidiaries may enter, which may impair our ability to make cash payments on our securities, including our series A preferred stock. In addition, such agreements may prohibit or limit the ability of our subsidiaries to transfer any of their property or assets to us, any of our other subsidiaries or third parties. Our future indebtedness or our subsidiaries’ future indebtedness may also include restrictions with similar effects.
In addition, because we are a holding company, shareholders’ claims will be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of our subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, claims of holders of our series A preferred stock will be satisfied only after all of our subsidiaries’ liabilities and obligations have been paid in full.
Our series A preferred stock will bear a risk of redemption by us.
We, at our option, may not redeem shares of our series A preferred stock prior to January 1, 2026, However, any such redemptions after such date may occur at a time that is unfavorable to holders of our series A preferred stock. We may have an incentive to redeem our series A preferred stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at a dividend or interest rate that is lower than the dividend rate on our series A preferred stock.
The potential payment of dividends on our series A preferred stock or redemption of our series A preferred stock is dependent on a number of factors, and payments and redemptions cannot be assured.
It is uncertain whether or when we will pay cash dividends or other distributions with respect to our series A preferred stock in the foreseeable future. Debt instruments to which we or our subsidiaries may be a party may contain restrictive covenants that limit our ability to pay dividends or for us to receive dividends from our subsidiaries, any of which may negatively impact the trading price of the series A preferred stock. In addition, holders of series A preferred stock will only be entitled to receive such cash dividends as our board of directors may declare out of funds legally available for such payments, and our board of directors may only authorize us to repurchase shares of our capital stock with funds legally available for such repurchases. The payment of future cash dividends and future repurchases will depend upon our earnings, economic conditions, liquidity and capital requirements, and other factors, including our debt leverage. Accordingly, we cannot make any assurance that dividends will be paid or redemptions will be made.
The cash distributions you receive on our series A preferred stock may be less frequent or lower in amount than you expect.
Our board of directors has ultimate discretion to determine the amount and timing of the distributions on the series A preferred stock. In making this determination, our board of directors will consider all relevant factors, including the amount of cash available for distribution, capital expenditure and reserve requirements and general operational requirements. We cannot assure you that we will consistently be able to generate sufficient available cash flow to fund distributions on the series A preferred stock at the stated dividend rate nor can we assure you that sufficient cash will be available to make distributions to you. We cannot predict the amount of distributions you may receive and we may be unable to pay distributions over time.
Holders of our series A preferred stock will be subject to inflation risk.
Inflation is the reduction in the purchasing power of money resulting from the increase in the price of goods and services. Inflation risk is the risk that the inflation-adjusted, or “real,” value of an investment in preferred stock or the income from that investment will be worth less in the future. As inflation occurs, the real value of our series A preferred stock and dividends payable on such shares declines.
An investment in our series A preferred stock bears interest rate risk.
Our series A preferred stock will pay dividends at a fixed dividend rate. Prices of fixed income investments vary inversely with changes in market yields. The market yields on securities comparable to our series A preferred stock may increase, which could result in a decline in the value or secondary market price of our series A preferred stock.
| 41 |
| Table of Contents |
Holders of series A preferred stock will bear reinvestment risk.
Given the potential for redemption of our series A preferred shares at the Company’s option that commenced on January 1, 2026, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the series A preferred stock may be lower than the return previously obtained from the investment in the series A preferred shares.
Market and economic conditions may negatively impact our business, financial condition and share price.
Concerns over inflation, tariffs, energy costs, geopolitical issues, the U.S. mortgage market and unstable real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and overall plan of business.
The ability of a stockholder to recover all or any portion of such stockholder’s investment in the event of a dissolution or termination may be limited.
In the event of a dissolution or termination of our Company, the proceeds realized from the liquidation of the assets of our Company, or our subsidiaries will be distributed among the common stockholders, but only after the satisfaction of the claims of third-party creditors of our Company and holders of our series A preferred stock. Each share of series A preferred carries an annual 12% cumulative, non-compounding dividend based on the cash amount invested into the series A preferred, payable quarterly. Dividends on series A preferred will be paid prior to any dividends on any other class of shares, including common stock. In the event of any liquidation, dissolution or winding up of our Company, the proceeds shall be paid as follows: (i) first, pay the purchase price plus accrued dividends, on each share of series A preferred; and (ii) next, the balance of any proceeds shall be distributed pro rata to holders of common stock or other junior securities. The ability of a common stockholder to recover all or any portion of such stockholder’s investment under such circumstances will, accordingly, depend on the amount of net proceeds realized from such liquidation and the amount of claims to be satisfied therefrom. There can be no assurance that our Company will recognize gains on such liquidation, nor is there any assurance that common stockholders will receive a distribution in such a case.
We are an “emerging growth company” and are able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, pursuant to Section 107 of the JOBS Act, as an “emerging growth company” we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
| 42 |
| Table of Contents |
Financial reporting obligations of being a public company in the United States are expensive and time-consuming, and our management is required to devote substantial time to compliance matters.
As a publicly traded company, we incur significant additional legal, accounting and other expenses. The obligations of being a public company in the United States require significant expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the Nasdaq Capital Market on which our securities are listed. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” In addition, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements and keep pace with new regulations so that we do not fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.
If we fail to comply with the rules under Sarbanes-Oxley related to accounting controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult.
Section 404 of Sarbanes-Oxley requires annual management assessments of the effectiveness of our internal control over financial reporting. If we fail to comply with the rules under Sarbanes-Oxley related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. If material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of Sarbanes-Oxley. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock could drop significantly.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting and we have identified weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.
We do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Our management has deemed certain conditions to be material weaknesses and significant deficiencies in our internal controls. For example, we failed to employ a sufficient number of staff to maintain optimal segregation of duties and to provide optimal levels of oversight and we rely upon a third-party accounting firm to assist us with GAAP compliance, the design and maintenance of effective internal controls over the accounting for impairment of goodwill and intangible assets and purchase accounting was ineffective, and the design and maintenance of controls over the accounting for website design and implementation and website management revenues was ineffective. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
| 43 |
| Table of Contents |
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, including increased complexity resulting from our international expansion. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of our internal control over financial reporting that we are required to include in our periodic reports that we file with the SEC. Ineffective disclosure controls and procedures, and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which could have a negative effect on the market price of our common stock.
As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm is not required to audit the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results, and cause a decline in the market price of our common stock.
Future sales and issuances of our securities or rights to purchase our securities, including pursuant to our Securities Purchase Agreement and the related Rights, equity incentive plan and outstanding warrants could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
We expect that significant additional capital may be needed in the future to continue our planned operations, including acquiring additional online businesses, marketing activities and costs associated with operating a public company. To raise capital, we may sell common stock, series A preferred stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, series A preferred stock, convertible securities or other equity securities, existing stockholders may be materially diluted by subsequent sales, and new investors could gain rights, preferences and privileges senior to the holders of our existing securities. The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Equity Incentive Plan, as amended, (the “2020 Plan”) is 2,600,000 shares, except at any given time, the number of shares that may be issued pursuant to the 2020 Plan cannot exceed the number of shares that is equal to 20% of our Company’s total shares of common stock outstanding at the time of any grant of awards under the 2020 Plan. Pursuant to the Securities Purchase Agreement and the related Rights, if we elect to sell all $300,000,000 of the Senior Secured Notes pursuant to the Securities Purchase Agreement, assuming a default premium of 20% and the Floor Price of $0.22, we may issue up to 1,636,363,636 additional shares of common stock upon the conversion, exercise or settlement of the securities issued thereunder plus the number of shares derived by multiplying (x) the value (as determined in accordance with the Rights) of the cryptocurrency and/or Digital Assets purchased by the Company, from and after November 17, 2025, by (y) 20%, in accordance with the terms of the Securities Purchase Agreement. Because the conversion price and the Floor Price of the Senior Secured Notes and the conversion price of the Rights may be adjusted, the number of shares of common stock that will actually be issued may be more or less than the 1,636,363,636+ additional shares of common stock described above. To date, we have sold an aggregate principal amount of $6,000,000 in Senior Secured Notes. Increases in the number of shares available for future grant or purchase may result in additional dilution, which could cause our stock price to decline.
Potential comprehensive tax reform bills could adversely affect our business and financial condition.
The U.S. government may enact comprehensive federal income tax legislation that could include significant changes to the taxation of business entities. These changes include, among others, a permanent increase to the corporate income tax rate. The overall impact of this potential tax reform is uncertain, and our business and financial condition could be adversely affected. This Report on Form 10-K does not discuss any such tax legislation or the manner in which it might affect purchasers of our common stock. We urge our stockholders to consult with their legal and tax advisors with respect to any such legislation and the potential tax consequences of investing in our common stock.
We can issue “blank check” preferred stock without stockholder approval with the effect of diluting interests of then-current stockholders and impairing their voting rights, and provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
Our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board. Of these 5,000,000 shares, 1,000,000 shares have been previously designated as series A preferred. Of the remaining 4,000,000 shares of “blank check” preferred stock, our Board is empowered, without stockholder approval, to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our Company. In addition, advanced notice is required prior to stockholder proposals, which might further delay a change of control.
| 44 |
| Table of Contents |
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Our directors and executive officers own approximately 33.5% of our outstanding common stock. Accordingly, these stockholders may exert significant influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, a merger, the consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. The interests of these stockholders may not be the same as or may even conflict with our other investors’ interests. For example, these stockholders could delay or prevent a change in control of us, even if such a change in control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our Company or our assets. The significant concentration of stock ownership may negatively impact the value of our common stock due to potential investors’ perception that conflicts of interest may exist or arise.
Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
Provisions of our certificate of incorporation and bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, subject to the rights of holders of any series of preferred stock, our certificate of incorporation and bylaws:
| · | empower our Board to fix the number of directors of our Company solely by resolution; |
| · | do not allow for cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; |
| · | empower our Board to fill any vacancy on our Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; |
| · | provide that special meetings of our stockholders may only be called by the Board or the chair of the Board (except that stockholders may also call special meetings of our stockholders so long as such stockholders beneficially owns at least 25% of the voting power of the outstanding shares of our stock); |
| · | establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders; |
| · | provide our Board the ability to authorize undesignated preferred stock. This ability makes it possible for our Board to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us; |
| · | provide that any director or the entire Board may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 66 2/3% in voting power of the stock of the Company entitled to vote thereon; |
| · | provide that our Board is expressly authorized to adopt, amend or repeal our bylaws; and |
| · | provide that our directors will be elected by a plurality of the votes cast in the election of directors. |
Additionally, any provision of Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our security holders to receive a premium for their securities and could also affect the price that some investors are willing to pay for our securities.
Certain provisions in the Securities Purchase Agreement and the Senior Secured Notes may delay or prevent an otherwise beneficial takeover attempt of us.
Certain provisions in the Securities Purchase Agreement and the Senior Secured Notes may make it more difficult or expensive for a third party to acquire us. For example, the Securities Purchase Agreement and the Senior Secured Notes require us to repurchase the Senior Secured Notes upon the occurrence of an event of default or a fundamental change at a cash repurchase price equal to 120% of the principal amount of the Senior Secured Notes to be repurchased, plus accrued and unpaid interest, if any, and other potential penalties, and to increase the conversion rate for a holder that converts its Senior Secured Notes in connection with such a transaction. As a result, a takeover of us could make it more costly for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.
Liability of directors for breach of duty is limited under Delaware law.
Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any:
| · | breach of their duty of loyalty to us or our stockholders; |
| · | act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| · | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or |
| · | transaction from which the directors derived an improper personal benefit. |
| 45 |
| Table of Contents |
These limitations of liability do not apply to liabilities arising under the federal or state securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.
Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by law, and may indemnify employees and other agents. Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding.
Provisions in our certificate of incorporation and bylaws may have the effect of discouraging lawsuits against our directors and officers.
Our certificate of incorporation and bylaws provide that unless our Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company; (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; (3) any action arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”) or our certificate of incorporation or bylaws (as either may be amended from time to time); or (4) any action asserting a claim governed by the internal affairs doctrine.
Unless our Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of our Company shall be deemed to have notice of and consented to the provisions of our certificate of incorporation.
Further, if any action the subject matter of which is within the scope of the section immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce section immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
The above-described provisions of our certificate of incorporation and bylaws that provide for the Court of Chancery of the State of Delaware as the sole and exclusive forum for any actions, claims or proceedings do not apply to suits brought to enforce a duty or liability created by the Exchange Act, Securities Act or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions. Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
Together, these charter, statutory and contractual provisions could make the removal of our management and directors more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant common stock beneficially owned by our founder, executive officers, members of our Board, and others could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
| 46 |
| Table of Contents |
If our securities become subject to the penny stock rules, it would become more difficult to trade our shares.
The Securities and Exchange Commission, or the SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq or another national securities exchange and if the price of our securities is less than $5.00, our securities could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our securities, and therefore shareholders may have difficulty selling their securities.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”), has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares, as well as overall liquidity, of our common stock.
We are a smaller reporting company and are exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.
Rule 12b-2 of the Exchange Act, defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority- owned subsidiary of a parent that is not a smaller reporting company and that:
| · | had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or |
| · | in the case of an initial registration statement under the Securities Act of 1933, as amended, or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or |
| · | in the case of an issuer whose public float was zero, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. |
As a smaller reporting company, we are not required and may not include a Compensation Discussion and Analysis section in our proxy statements; we provide only two years of financial statements; and we do not need to provide the table of selected financial data. We also have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our securities less attractive to potential investors, and also could make it more difficult for our stockholders to sell their securities.
Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our previously filed financial statements, which could cause our stock price to decline.
We prepare our financial statements in accordance with GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.
Item 1B. Unresolved Staff Comments.
None.
| 47 |
| Table of Contents |
Item 1C. Cybersecurity.
Cybersecurity Risk Management and Strategy. We depend on software applications, information technology systems, computing infrastructure and cloud service providers to operate our business. Certain of these systems are managed, hosted, provided or used by third parties, to assist in conducting our business and which have their own cyber security measures in place. We implement generally applicable industry standards and best practices processes for the assessment, identification, and management of material risks from cybersecurity threats to our information technology systems. Our Information Security Coordinator oversees our information security policies and procedures. Our Information Security Coordinator maintains a cyber incident reporting and response process and provides management notifications based on the seriousness of any incident. Our information security policies and procedures are required to be reviewed on a regular basis.
We have not experienced a cybersecurity incident that resulted in a material adverse impact to our business or operations; however, there can be no guarantee that we will not experience such an incident in the future. For a description of the risks from cybersecurity threats that may materially affect our Company and how they may do so, please see “Risk Factors - Risks Related to Information Technology Systems, Intellectual Property and Privacy Laws” included in Part I, Item 1A of this Annual Report on Form 10-K. If our security measures are breached and an unauthorized party obtains access to our proprietary business information, our information systems may be perceived as being unsecure, which could harm our business and reputation, and our proprietary business information could be misappropriated which could have an adverse effect on our business and results of operations.”
Cybersecurity Governance. Our Nominating and Corporate Governance Committee has primary responsibility for overseeing our risk-management program relating to cybersecurity, although our Board of Directors participates in periodic reviews and discussion dedicated to cyber risks, threats, and protections.
Item 2. Properties.
The Company is a remote company, meaning that it does not have a physical office where employees work. Our executive officers and other employees have the option of either telecommuting or working from somewhere else. We lease and maintain an office at the Executive Centre Taipei, Level 4, Neihu New Century Building No. 55, Zhouzi St, Neihu District, Taipei City, 114, Taiwan (approximately $400 per month), and a community and co-working space at The Mill at 1007 North Orange Street, 4th Floor, Wilmington, Delaware 19801 ($75 per month). We do not currently own any real estate. We consider our space at 1007 North Orange Street, 4th Floor, Wilmington, Delaware 19801 to be our principal executive office.
Item 3. Legal Proceedings.
We are not a party to any litigation of a material nature, nor are we aware of any threatened litigation of a material nature.
Item 4. Mine Safety Disclosures.
Not Applicable
| 48 |
| Table of Contents |
PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities.
Market Information
Our common stock and warrants were listed and began trading on the Nasdaq Capital Market on August 26, 2022, under the symbols “ONFO” and “ONFOW,” respectively. Prior to the listing, there was no public market for our common stock and warrants.
Holders of Common Stock
On March 31, 2026, we had approximately 68 holders of our common stock, not including persons who hold our common stock in nominee or “street name” accounts through brokers or banks.
Dividend Policy
We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Pursuant to our Securities Purchase Agreement, so long as any Senior Secured Notes are outstanding, our Company may not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company, other than our series A preferred stock, without the prior express written consent of such noteholders.
Our Company has been paying quarterly dividends on our series A preferred shares every quarter since January 2020, and we currently expect that cash dividends will continue to be paid on our series A preferred shares in the future.
Purchases of Equity Securities
No repurchases of our common shares were made during the fourth quarter of 2025.
Securities Authorized for Issuance under Equity Compensation Plans
Equity Compensation Plans as of December 31, 2025.
Equity Compensation Plan Information | ||||||||||||
|
| Number of securities to be issued upon exercise of outstanding options, warrants and rights |
|
| Weighted-average exercise price of outstanding options, warrants and rights |
|
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| |||
Plan category |
| (a) |
|
| (b) |
|
| (c) |
| |||
Equity compensation plans approved by security holders(1) |
|
| 861,860 |
|
| $ | 0.93 |
|
|
| 1,738,140 |
|
Equity compensation plans not approved by security holders(2) |
|
| 82,613 |
|
| $ | 5.50 |
|
|
| 0 |
|
Total |
|
| 944,473 |
|
| $ | 1.33 |
|
|
| 1,738,140 |
|
1. | Reflects shares of common stock to be issued pursuant to our 2020 Equity Incentive for the benefit of our directors, officers, employees and consultants. We have reserved 2,600,000 shares of common stock for such persons pursuant to our 2020 Equity Incentive Plan. |
2. | Represents warrants to purchase 82,613 shares of common stock issued to the underwriter in our IPO. The warrants have an exercise price of $5.50, are exercisable beginning on February 22, 2023 and expire on August 25, 2027. |
| 49 |
| Table of Contents |
Purchases of Equity Securities by the Issuer or Affiliated Purchasers
None.
Item 6. RESERVED.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following selected financial information is derived from our historical financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere within this Report on Form 10-K and the “Forward-Looking Statements” explanation included elsewhere herein.
Recent Developments
Satisfaction of Note
In February 2025, the cash payment required to satisfy the obligations under the $400K short term Eastern Standard Promissory Note related to the Eastern Standard acquisition was provided by the OA SPVs. As a result, the ownership structure of Eastern Standard Delaware was adjusted, with the OA SPVs increasing its aggregate ownership percentage to 38%, while the Company’s ownership interest was adjusted to 53%. The 10% roll-over equity interest held by Eastern Standard Pennsylvania founders remains unchanged.
Launch of Pace Generative
In June 2025, the Company launched Pace Generative LLC ("Pace Generative"), a wholly-owned Delaware limited liability company and dedicated Generative Engine Optimization ("GEO") agency. Pace Generative helps brands achieve visibility in AI-generated search results and answers across platforms such as ChatGPT, Google AI Overviews, and Perplexity. The agency provides services including question-driven content development, AI-optimized site structure, language and topic alignment, and strategic publishing targeting sectors where authoritative content is critical, including healthcare, finance, law, education, consulting, and B2B services. The Company holds a 100% ownership stake in Pace Generative.
Private Offerings
In October 2025, the Company completed a private placement of common stock units, for aggregate gross proceeds of approximately $1,000,000 and the issuance of 735,819 shares of the Company's common stock, par value $0.001 per share, and warrants to purchase an additional 735,819 shares of common stock at an exercise price of $2.50 per share. The warrants are exercisable beginning on October 23, 2025 and expire on August 30, 2027.
During the year ended December 31, 2025, the Company sold 32,200 shares of Series A preferred stock for $805,000 in cash proceeds. Additionally, in February 2025, the Company issued $70,000 in Series A preferred stock to the sellers of RevenueZen in connection with a contingent consideration payment.
Securities Purchase Agreement
On November 17, 2025, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain buyers, pursuant to which the Company agreed to sell an aggregate principal amount of $6,000,000 in Senior Secured Convertible Notes (the "Senior Secured Notes”), convertible into shares of the Company's common stock, and rights to receive common stock.
Under the terms of the Securities Purchase Agreement, the net proceeds from the sale of the $6.0M in Senior Secured Notes are allocated as follows: 50% for Bitcoin (BTC) or other cryptocurrency acquisitions as reserve assets; and 50% for working capital.
The Senior Secured Notes mature on November 17, 2027 and are convertible at a conversion price of $0.984 per share, subject to certain adjustments (See Note 11). As a result of events of default, the Senior secured notes are currently convertible at 85% of the lowest VWAP of our common stock of any trading day during the twenty (20) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. The Senior Secured Notes are senior obligations of the Company and are secured by all assets of the Company and its subsidiaries. As of December 31, 2025, the Company received $2,322,500 in cash proceeds and $2,447,500 in the form of digital assets purchased from the Senior Secured Notes.
Subject to the terms and conditions of the Securities Purchase Agreement, the Company may require each buyer to participate in one or more additional closings for the purchase by such buyer and the sale by the Company, of (a) with respect to the First Additional Closing (as defined below), additional Senior Secured Notes in the aggregate original principal amount of $2,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (such closing of the purchase of such Senior Secured Notes, the “First Additional Closing”), and (b) with respect to any Subsequent Additional Closing (as defined below), Senior Secured Notes with an aggregate original principal amount for all Subsequent Additional Closings not to exceed $292,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (each such closing of the purchase of such Senior Secured Notes, a “Subsequent Additional Closing”).
| 50 |
| Table of Contents |
Right to Receive Common Stock
On November 17, 2025, the Company issued to the buyers the Rights to Receive Common Stock (“Rights”), exercisable for the Right Amount (as defined below) in shares of Common Stock. The Rights shall be exercisable between November 17, 2025, and May 17, 2033. “Right Amount” means the underlying value of this Right, which initially shall be zero and shall increase on each calendar day on or after November 17, 2025, through and including, May 17, 2033, by the Right Daily Incremental Amount, which is 1/360th of 2% of the average value of the Company's digital assets and any accrued and unpaid late charges related thereto. Buyers may exercise the accrued Right Amount, at the times described in the Rights, in whole or in part, at the conversion prices described in the Right.
Registration Rights Agreement
On November 17, 2025, the Company also entered into a registration rights agreement with the Buyers (the “Registration Rights Agreement”), which provides, subject to certain limitations, the Buyers with certain registration rights for the shares of Common Stock issuable upon conversion of the Senior Secured Notes and exercise of the Rights. The Registration Rights Agreement requires the Company to prepare and file a registration statement with the U.S. Securities and Exchange Commission within 30 days after the issuance of the Senior Secured Notes to register the resale of the shares underlying the Senior Secured Notes and the Rights and cause such registration statement to be declared effective within 60 days after the issuance of the Senior Secured Notes. In the event that the Company fails to file the registration statement by the prescribed deadline or such registration statement is not declared effective by the prescribed deadline or the Company fails to maintain the effectiveness of such registration statement, then the Company shall pay to each holder of registrable securities relating to such registration statement an amount in cash equal to two percent (2.0%) of such investor’s original principal amount stated in such investor’s Note.
Digital Assets Treasury
During the fourth quarter of 2025, as part of a financing and balance-sheet decision based upon the terms of the Securities Purchase Agreement, the Company acquired approximately $2.4 million in digital assets, consisting of Bitcoin ("BTC"), Ether ("ETH"), and Solana ("SOL"). As of December 31, 2025, the Company's digital asset holdings had a total fair value of approximately $2.3 million, consisting of 5.32 BTC, 318.33 ETH (of which 288.16 are staked), and 6,786.17 SOL (all staked). Digital assets are accounted for at fair value under ASC 350-60, with changes in fair value recognized in the consolidated statement of operations. For additional detail, see Note 8 - Digital Assets.
Overview
Onfolio Holdings Inc. acquires controlling interests in and actively manages small online businesses that we believe (i) operate in sectors with long-term growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence and (iv) can be managed by our existing team or have strong management teams largely in place. Through the acquisition and growth of a diversified group of online businesses with these characteristics, we believe we offer investors in our shares an opportunity to diversify their own portfolio risk.
Onfolio Holdings Inc. was incorporated on July 20, 2020 under the laws of Delaware to acquire and develop high-growth and profitable online businesses. Unless the context otherwise requires, all references to “our Company,” “we,” “our” or “us” and other similar terms means Onfolio Holdings Inc., a Delaware corporation, and our wholly owned subsidiaries.
In 2025, revenue increased 36.5% compared to 2024, while cost of revenue increased 29.6%, resulting in gross margin expansion of 2.1%. Despite this improvement, loss from operations increased 12% to ~$2.8M in 2025 from ~$2.5M in 2024.
The increase in operating loss was driven in large part due to an impairment of intangible assets increase of $320K, an amortization of intangibles increase of $290K, and a stock-based compensation increase of $184K, totaling a $794K increase in non-cash expenses compared to 2024. Excluding these non-cash expenses, operating loss improved from $1.42M in 2024, to $0.88M in 2025, an improvement of 38.3%. In addition, 2025 included approximately $175Kof one-time professional fees, including costs associated with the 2023 re-audit, that management does not currently expect to recur at the same level in 2026.
Our EBITDA As Defined in 2025 was $151,207, compared to $(587,651) in 2024, which increased in 2025 as a result of our Eastern Standard acquisition completed during the fourth quarter of fiscal 2024. EBITDA As Defined is a Non-GAAP financial measure. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information and limitations regarding these non-GAAP financial measures, including a reconciliation to the comparable U.S. GAAP financial measure.
We finished the year with $2.17M in cash, vs $0.47M at the end of 2024, and subsequent to December 31, 2025, We have utilized approximately $500K in cash primarily for regular business operations, audit fees, and legal and professional fees.
| 51 |
| Table of Contents |
On a quarterly basis, Q4 2025 saw revenue decrease year-over-year from $2.5M to $2.0M, and loss from operations increase from $1.11M in Q4 2024 to $1.26M. However, excluding non-cash expenses, operating loss improved by 53% to $0.46M, compared $0.97M in Q4 2024.
At the portfolio level, 2025 was our first full year owning Eastern Standard, which is one of our largest businesses. In the first half of the year, the focus was on integrating that company, building its cash reserves, and positioning it for future growth.
In the second half of the year, the Eastern Standard team began to take a larger role across our agency portfolio, helping to support DDSRank, RevenueZen, Contentellect, and SEOButler.
Towards the end of 2025, we began work on creating a more unified “AgencyCo” structure that would bring closer alignment across our agencies. This integration will continue throughout 2026, and we believe it is an important step in helping our agencies adapt to the changes and opportunities that AI is bringing to the industry.
This may lead to some headcount reduction across the agencies, as well as a more concentrated focus on growth.
As AI continues to reshape agency work, clients are increasingly expecting more value at lower cost. We believe agencies that adapt to these changes will survive and even thrive moving forward, and that the agencies that resist to these changes may find themselves obsolete.
For our Company, 2026 will involve balancing the need to re-invent parts of our agency while also ensuring our businesses continue to generate reliable cash flow.
Our second largest business, Proofread Anywhere had a more mixed year. The first half of 2025 saw strong growth and consistent cash flow, but some headwinds in the second half of 2025 led to revenue decline, contributing to the overall lower revenue in Q4 2025 compared to last year. In response, we scaled back advertising in order to preserve ProofreadAnywhere’s cashflow by reducing spend.
Although results in Q3 and Q4 of 2025 were below our expectations, so far, Q1 2026 has seen modest improvement, and we have gradually increased advertising spend accordingly.
Overall, our focus remains on maintaining cash flow across the portfolio, while continuing to pursue growth through acquisitions.
The most notable part about 2025 was securing our $300M convertible note facility, pursuant to the Securities Purchase Agreement, whereby we sold an aggregate principal amount of $6,000,000 in Senior Secured Notes. During the fourth quarter of 2025, as part of a financing and balance-sheet decision based upon the terms of the Securities Purchase Agreement, the Company acquired approximately $2.4 million in digital assets, consisting of BTC, ETH, and SOL. We also retired approximately $640K in debt, purchased treasury bills and earmarked the rest of the net proceeds for working capital and growth.
We believe our entry into the Securities Purchase Agreement will strengthen our Company in five ways:
First, it allows us to generate recurring income from digital asset yield.
Second, it gives us exposure to potential upside in digital assets prices.
We do not intend to actively trade our digital assets. Instead, we have employed a long-term balance sheet treasury decision to hold our digital assets, even though quarter to quarter we may book gains or losses as the underlying digital assets prices rise and fall.
Third, the proceeds enable us to retire a substantial portion of our debt and cut interest expenses.
Fourth, the proceeds enable us to deploy additional capital into growing our existing portfolio.
| 52 |
| Table of Contents |
And fifth, the proceeds provide us with flexibility to restart our acquisition program.
Acquisition and Operational Strategy For 2026
In 2025 we did not complete any acquisitions. It has been approximately 18 months since our last major acquisition, that of Eastern Standard in October 2024.
We chose not to pursue further acquisitions in 2025 for three reasons. First, after a successful 2024 acquisition program, we felt we potentially had enough in our portfolio to reach profitability and unlock more favorable financing terms and acquisition opportunities. Second, we felt that discipline and operational improvements were a better focus of our efforts. The third reason was simply that we didn’t have sufficient capital to complete acquisitions that would make a meaningful impact on our portfolio, and we were resistant to using equity as consideration for acquisitions.
Despite the lack of acquisitions, at times we believed we were close to achieving our goal of profitability in 2025. Each quarter was improving on the previous, and as we approached Q3 we were optimistic
; but several of our businesses experienced headwinds in Q4, which is often unavoidable with online businesses. Our initial acquisition thesis back in 2020 was that an online business portfolio needs to be diversified enough to protect against disruption, algorithm changes, or consumer spending trends, but not so broad that it leads to teams being stretched thin.
We concluded that our portfolio had not necessarily reached sufficient size, breadth, or cash flow to focus on organic growth, so we determined to continue growing via acquisitions with the goal of expanding the size of our portfolio in 2026.
We are reviewing several promising acquisition opportunities in our pipeline at this time and hope to be able to provide more information on these soon.
Emerging Growth Company
We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
| ● | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
| ● | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
| ● | submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and |
| ● | disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
| 53 |
| Table of Contents |
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors at a portfolio company level:
● | our ability to acquire new customers or retain existing customers; | |
| ● | our ability to offer competitive product pricing; |
| ● | our ability to broaden product offerings; |
| ● | industry demand and competition; |
| ● | our ability to leverage technology and use and develop efficient processes; |
| ● | our ability to effectively utilize a combination of cash, debt such as seller’s notes, and preferred shares when negotiating and structuring future deals; |
| ● | our ability to effectively utilize a combination of cash, debt such as seller’s notes, and preferred shares when negotiating and structuring future deals; |
| ● | our ability to attract and retain talented employees; and |
| ● | market conditions and our market position. |
Components of Results of Operations
The Company reported a net loss of $2,540,368, which includes $2,316,461 in non-cash expenses and a $229,086 non-cash loss on the change in fair value of the digital assets and a $1,083,185 non-cash gain on the change in fair value of derivative liabilities, for the year ended December 31, 2025 compared to a net loss of $1,773,942, which includes $1,084,624 in non-cash expenses, for the year ended December 31, 2024. The components of the increase in net loss for the current period are as follows:
Revenues
|
| For the Year Ended December 31, |
|
| $ Change from prior |
|
| % Change from prior |
| |||||||
|
| 2025 |
|
| 2024 |
|
| year |
|
| year |
| ||||
Revenue, services |
| $ | 7,386,084 |
|
| $ | 4,660,069 |
|
| $ | 2,726,015 |
|
|
| 58 | % |
Revenue, product sales |
|
| 3,344,134 |
|
|
| 3,202,008 |
|
|
| 142,126 |
|
|
| 4 | % |
Total Revenue |
|
| 10,730,218 |
|
|
| 7,862,077 |
|
|
| 2,868,141 |
|
|
| 36 | % |
Revenue increased by $2,868,141, or 36% for the year ended December 31, 2025 compared to 2024. The increase is primarily due to revenue from our Eastern Standard acquisition completed during the fourth quarter of fiscal 2024, which increased revenue by approximately $3,340,000 during the year ended December 31, 2025, and our DDS Rank acquisition completed at the end of the second quarter of fiscal 2024, which increased revenue by approximately $91,300 during the year ended December 31, 2025. In addition, our digital product sales increased by approximately $709,241 under our Proofread anywhere subsidiary, partially offset by the absence of WPFolio revenue following its sale in the fourth quarter of 2024.
Cost of Revenue
|
| For the Year Ended December 31, |
|
| $ Change from prior |
|
| % Change from |
| |||||||
|
| 2025 |
|
| 2024 |
|
| year |
|
| prior year |
| ||||
Cost of revenue, services |
| $ | 3,910,452 |
|
| $ | 2,609,061 |
|
| $ | 1,301,391 |
|
|
| 50 | % |
Cost of revenue, product sales |
|
| 389,568 |
|
|
| 708,139 |
|
|
| (318,571 | ) |
|
| (45 | )% |
Total Cost of Revenue |
|
| 4,300,020 |
|
|
| 3,317,200 |
|
|
| 982,820 |
|
|
| 30 | % |
| 54 |
| Table of Contents |
Cost of revenue increased by $982,820, or 30% due to the Company’s recent acquisitions which increased cost of service revenue, partially offset by a reduction in cost of product sales revenue, and lower product sales from the Mighty Deals subsidiary also contributed to the offset. The Company’s gross profit margins increased slightly in the current period compared to the prior period. The components most significant to the Company’s cost of revenue are the costs of labor for service fulfillment, content creation, website hosting and maintenance costs and the costs of acquiring new inventory products for physical product sales.
Operating Expenses
Selling, General and Administrative
General and Administrative expenses increased by $1,748,926 or 31% during the year ended December 31, 2025 as compared to 2024. The increase was primarily due to an increase in advertising and marketing costs of $685,000, increase in contractor and compensation costs of $356,000, increase in other general and administrative costs of $226,000, including travel and merchant fees, an increase of $184,000 related to non-cash stock based compensation, and an increase in amortization expenses of $293,000 associated with the acquired intangible assets, Eastern Standard and DDS Rank, not present in the comparable period.
Our general and administrative expenses consist primarily of consulting related expenses paid to contractors, stock-based compensation, advertising and marketing costs, and other expenses. In the near future, we expect our general and administrative expenses to continue to increase to support business growth. Over the long term, we expect general and administrative expenses to decrease as a percentage of revenue.
Professional Fees and Acquisition Costs
Professional fees increased by $264,054, or 28% during the year ended December 31, 2025 compared to 2024 primarily due to increased legal and accounting costs associated with the Company’s compliance requirements as a public company. The Company also incurred $68,625 in acquisition costs during the year ended December 31, 2025 compared to $264,731 during the year ended December 31, 2024 including audit, legal and other professional fees related to acquisitions and potential acquisitions. We expect acquisition costs to remain significant as we continue to grow based on acquisitions.
Impairment Loss
During the year ended December 31, 2025, the Company recognized an impairment loss of approximately $217,000 related to allthingsdogs.com, an indefinite-lived intangible asset, based on a decline in estimated fair value supported by expected disposition proceeds and a discounted cash flow analysis. Additionally, the Company recognized an impairment loss of approximately $223,000 related to DDS Rank, as projected operating cash flows were determined to be insufficient to recover the carrying amount. Fair value was estimated using the present value of expected future cash flows. Total impairment charges for the year ended December 31, 2025 were approximately $440,000 compared to $121,000 for the year ended December 31, 2024.
Other Income and Expense
Total other income was $200,607 for the year ended December 31, 2025 compared to other income of $733,906 for the year ended December 31, 2024. The decrease in other income was driven by an increase in interest expense of approximately $397,000 on the outstanding promissory notes as a result of higher note balances, an impairment of its investments of approximately $294,000 and a loss on the change in fair value of the Company’s digital assets of approximately $227,000, and a decrease in the change in fair value of the contingent consideration owed on the RevenueZen Acquisition of approximately $257,000 and a gain on the change in fair value of derivative liabilities of approximately $1,083,000. In addition, the Company recorded a gain of approximately $454,000 on the sale of certain assets in the prior period with no comparable transactions in the current period.
| 55 |
| Table of Contents |
Business Segment Results of Operations
We operate in two business segments: Business to Business (“B2B”) and Business to Consumers (“B2C”). We organize our business segments based on the nature of products and services offered, and the economic characteristics of each segment. Following is a brief description of the activities of our business segments:
Selected Financial Data by Business Segment
Net sales and operating profit of the Company’s business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. Sales, cost of sales and operating profit for each of our business segments were as follows:
|
| For the Year ended December 31, 2025 |
|
| For the Year ended December 31, 2024 |
| ||
Revenue |
|
|
|
|
|
| ||
B2B |
| $ | 7,056,963 |
|
| $ | 4,368,661 |
|
B2C |
|
| 3,673,255 |
|
|
| 3,493,416 |
|
Total revenue |
| $ | 10,730,218 |
|
| $ | 7,862,077 |
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
B2B |
| $ | 3,827,147 |
|
| $ | 2,561,523 |
|
B2C |
|
| 472,873 |
|
|
| 755,677 |
|
Total Cost of Sales |
| $ | 4,300,020 |
|
| $ | 3,317,200 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
B2B |
| $ | (334,473 | ) |
| $ | 4,862 |
|
B2C |
|
| 538,253 |
|
|
| 482,100 |
|
Total business segment operating income (loss) |
|
| 203,780 |
|
|
| 486,962 |
|
Unallocated items |
|
| (2,962,145 | ) |
|
| (2,994,813 | ) |
Total consolidated operating income (loss) |
| $ | (2,785,365 | ) |
| $ | (2,507,851 | ) |
Management evaluates performance on our contracts by focusing on net sales and operating profit and not by type or amount of operating expense. Consequently, our discussion of business segment performance focuses on net sales and operating profit, consistent with our approach for managing the business. This approach is consistent throughout the life cycle of our contracts, as management assesses the bidding of each contract by focusing on net sales and operating profit and monitors performance on our contracts in a similar manner through their completion.
B2B
Our B2B segment includes the results of operations of Eastern Standard, RevenueZen, DDS Rank, SEO Butler, Contentellect, DealPipe, and Pace Generative. These entities share similar characteristics such as customers being businesses and being primarily service-related revenue.
B2B revenue increased by $2,688,302 or 62% during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase is primarily due to revenue from our Eastern Standard acquisition completed during the fourth quarter of fiscal 2024, which increased revenue by approximately $3,451,000, partially offset by declines in revenue at RevenueZen, Contentellect, and SEO Butler.
B2B total operating income decreased by $339,335 during the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was a result of the increased revenue and gross profit offset by the increase in intangible asset amortization for the newly acquired businesses in the year ended 2024 in addition to an impairment expense of approximately $223,000.
| 56 |
| Table of Contents |
B2C
Our B2C segment includes the results of operations of Proofread Anywhere, Onfolio Assets, Mighty Deals, and Vital Reaction. These entities share characteristics such as the end customers being individual consumers, and sales being more focused on product sales, including digital sales.
B2C revenue increased by $179,839 or 5% during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase is primarily due to an increase in digital product sales within the Company’s Proofread Anywhere subsidiary, offset by the absence of WPFolio revenue following its sale in the fourth quarter of 2024.
B2C incurred total operating income of $538,253 during the year ended December 31, 2025, compared to the year ended December 31, 2024 of $482,100, primarily due to the increase in sales from the Proofread Anywhere subsidiary.
Liquidity and Capital Resources
Our primary source of operating cash inflows are payments from portfolio companies. In addition, the Company has raised approximately $1,700,000 pursuant to private offerings of Series A preferred stock and approximately $1,000,000 of common stock private offerings through December 31, 2025, approximately $1,500,000 in notes payable and repaid $2,164,498 on its acquisition notes.
On November 17, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain buyers, pursuant to which the Company agreed to sell an aggregate principal amount of $6,000,000 in Senior Secured Convertible Notes (the “Senior Secured Notes”), convertible into shares of the Company’s common stock, and rights to receive common stock.
The Senior Secured Notes mature on November 17, 2027 and are convertible at a conversion price of [$0.984] per share, subject to certain adjustments. As a result of events of default, the Senior secured notes are currently convertible at 85% of the lowest VWAP of our common stock of any trading day during the twenty (20) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. The Senior Secured Notes are senior obligations of the Company and are secured by all assets of the Company and its subsidiaries. As of December 31, 2025, the Company received $2,322,500 in cash proceeds and $2,447,500 in the form of digital assets purchased from the Senior Secured Notes.
Subject to the terms and conditions of the Securities Purchase Agreement, the Company may require each Buyer to participate in one or more additional closings for the purchase by such Buyer and the sale by the Company, of (a) with respect to the First Additional Closing (as defined below), additional Senior Secured Notes in the aggregate original principal amount of $2,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (such closing of the purchase of such Senior Secured Notes, the “First Additional Closing”), and (b) with respect to any Subsequent Additional Closing (as defined below), Senior Secured Notes with an aggregate original principal amount for all Subsequent Additional Closings not to exceed $292,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (each such closing of the purchase of such Senior Secured Notes, a “Subsequent Additional Closing”).
Our Company’s recurring losses from operations and negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern. Accordingly, management and our auditor have concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited financial statements contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on March 31, 2026 were prepared on a going concern basis, and contemplated the realization of assets and satisfaction of liabilities in the ordinary course of business. We believe that our cash and cash equivalents as of March 31, 2026, and the future operating cash flows of the entity may not provide adequate resources to fund ongoing cash requirements for the next twelve months. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern.
| 57 |
| Table of Contents |
Operating Activities
Net cash used in operating activities was $938,248 and $1,168,363 for the years ended December 31, 2025 and 2024. The decrease was primarily from the increase in revenues through its business acquisitions closed in the second half of 2024.
Investing Activities
Net cash used in investing activities was $2,480,759 and cash provided by investing activities of $451,000 for the years ended December 31, 2025 and 2024, respectively. The cash used in investing activities in the current period was primarily related to the investment in digital assets. The cash provided by investing activities was primarily for proceeds received for the sale of a subsidiary offset by the purchase of businesses in the prior period and additional cost method investments.
Financing Activities
Cash flows from financing activities was cash provided of $5,094,351 for the year ended December 31, 2025 compared to cash provided by financing activities of $326,336 for the year ended December 31, 2024.
During the year ended December 31, 2025, we received $805,000 in proceeds from sales of Series A preferred stock, $993,356 in proceeds from sales of our common stock units, $4,770,000 in proceeds from convertible notes payable, proceeds of $593,371 from notes payable and $60,965 in related party notes payable. We paid $453,859 in dividends to preferred stockholders, made payments totaling $955,847 on notes payable, made payments of $461,919 on related party notes payable, made payments totaling $195,396 related to contingent consideration and made distributions totaling $61,320 to our non-controlling interest holders. During the 2024 period, we received $20,000 in proceeds from sales of Series A preferred stock, $881,650 in proceeds from notes payable, and $200,000 in proceeds from related party notes payables, made payments of $321,442 in dividends to preferred stockholders, made payments totaling $386,339 on notes payable, made payments of $1,000 on related party notes payable, made payments totaling $59,093 related to contingent consideration and $20,400 in distribution to non-controlling interest holders.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors
Contractual Obligations
RevenueZen Acquisition: The Company has determined the final amount obligated to pay to the sellers of RevenueZen, contingent upon the business achieving a specified gross profit threshold within one year to be $680,662. On February 28, 2025, the Company and the RevenueZen sellers agreed to the final earn-out amount to be $682,000 and modified the payment terms to be paid with a cash payment of $72,000, $100,000 to be paid through profit sharing by using 30% of Net Operating Income, $100,000 in value for $79,240 stock options to purchase shares of common stock, $70,000 in Series A preferred stock, and $340,000 in a promissory note. The promissory note has a term of 60 months and accrues interest at 19%. The stock options have an exercise price of $1.34, have a term of 10 years, and are vested immediately. As of December 31, 2025, the Company estimated the remaining obligations owed under the revenue share obligation to be $71,082.
First Page Acquisition: The Company agreed to pay a revenue share amount equal to 18% of gross revenues for the acquired customers for 3 years following the acquisition date. As of December 31, 2025, the Company estimated the remaining obligations owed under the revenue share provisions to be $93,298 resulting in a change in the fair value of the contingent consideration of $53,151.
Critical Accounting Policies
The following are the Company’s critical accounting policies:
Investment in Unconsolidated Entities – Equity and Cost Method Investments
We account for our interests in entities in which we are able to exercise significant influence over operating and financial policies, generally 50% or less ownership interest, under the equity method of accounting. In such cases, our original investments are recorded at cost and adjusted for our share of earnings, losses and distributions. We account for our interests in entities where we have virtually no influence over operating and financial policies under the cost method of accounting. In such cases, our original investments are recorded at the cost to acquire the interest and any distributions received are recorded as income. Our investments in OnFolio JV I, LLC (“JV I”), OnFolio JVII, LLC (“JVII”) and OnFolio JVIII, LLC (“JVIII”) are accounted for under the cost method. All investments are subject to our impairment review policy.
| 58 |
| Table of Contents |
The current investment in unconsolidated affiliates accounted for under the equity method consists of a 35.8% in interest in Onfolio JV IV, LLC (“JV IV”), which is involved in the acquisition, development and operation of online businesses to produce advertising revenue.
Variable Interest Entities
Variable interest entities (“VIEs”) are consolidated when the investor is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE. Management concluded that the joint ventures do not qualify as variable interest entities under the requirements of ASC 810. The Company accounts for its investments in the joint ventures under either the cost or equity method based on the equity ownership in each entity.
The Company, through its subsidiary Onfolio Management LLC, is the manager of Onfolio Agency SPV, LLC (“OA SPV”), and Onfolio Agency SPV 2, LLC (“OA SPV 2”), collectively referred to as “OA SPVs”. The Company does not hold any equity interest in OA SPVs, but will receive 10% of any cash distributions paid by OA SPV, and 20% of any cash distributions paid by OA SPV 2, to its members, when declared, as the management fee. The Company can be removed as manager of OA SPVs through a unanimous vote of the members. The Company determined that the fees it may receive for its role as manager do not constitute a variable interest in OA SPVs and will be accounted for as a revenue contract under ASC 606.
The Company, through its subsidiary RevenueZen, LLC, is the manager of CliAquire, LLC (“CliAquire”). The Company holds a 5% members interest in CliAquire and will receive profit distributions based on its membership interest. The Company can be removed as manager of CliAquire through a supermajority vote of the members. The Company determined that the investment in CliAquire will be accounted for as a cost method investment.
Digital Assets
The Company’s digital assets include Bitcoin, the native cryptocurrency on the Bitcoin blockchain (“BTC”), Ether, the native cryptocurrency of the Ethereum blockchain (“ETH”), and Solana, the native cryptocurrency of the Solana blockchain (“SOL”). From time to time, the Company may also hold minor amounts of other digital tokens, which are not individually material.
Crypto assets within the scope of ASC 350-60 Intangibles—Goodwill and Other—Crypto Assets (“ASC 350-60):
BTC, ETH, and SOL tokens have been determined to fall within the scope of ASC 350-60. The Company reflects crypto assets held at fair value on the consolidated balance sheets within the Digital Assets line item. Changes in the fair value of crypto assets are recognized in income, reflected within the digital asset gains and losses within the consolidated statement of operations. The purchases and disposals of ETH are presented as non-cash investing activities on the consolidated statement of cash flows.
In determining the fair value of digital assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company utilizes BitGo as the principal market and for pricing in determining the fair value of its digital asset holdings. The Company uses a first-in, first-out methodology to assign costs to digital assets. The fair value of digital assets are considered a level 1 fair value measurement.
Custodian Risk
The Company’s Digital Assets are held with a single third-party custodian, BitGo, which we selected based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.
| 59 |
| Table of Contents |
Native Staking
The Company utilized one third-party asset manager to manage and stake ETH and SOL on its behalf as of December 31, 2025. Under these arrangements, the Company’s ETH and SOL is held by a qualified custodian and staked in the Ethereum and Solana protocol through a third-party validator operator (e.g., BitGo). The validator operator manages the staking process and delegates the Company’s ETH and SOL to network validators. When selected by the networks, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated.
ETH and SOL used in native staking is retained on the Company’s balance sheet as a crypto asset measured at fair value in accordance with ASC 350-60. The Company does not derecognize ETH and SOL when participating in native staking because it retains the ability to direct the use of the asset and obtain substantially all benefits.
The validator operator (e.g., BitGo) is not considered a customer under ASC606 as the service provided to BitGo does not represent an output as part of the entity’s ordinary operating strategy. As such the earnings are recorded as other income in the statement of operations.
Earnings from native staking is recognized at the end of each daily period, when the Company’s right to staking rewards becomes determinable (i.e., when the constraint is lifted). The amount recognized as earnings is measured at the fair value of rewards at contract inception for that day, net of validator commissions, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and ASC 820. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception. Subsequent changes in the fair value of ETH and SOL after initial recognition are recorded as unrealized gains or losses.
Revenue Recognition
The Company primarily earns revenue through website management, digital services, advertising and content placement on its websites, product sales, and digital product sales. Management services revenue is earned and recognized on a monthly basis as the services are provided. Advertising and content revenue is earned and recognized once the content is presented on the Company’s sites in accordance with the customer requirements. Product sales are recognized at the time the product is shipped to the customer. In certain circumstances, products are shipped directly by a supplier to the end customer at the Company’s request. The Company determined that it is the primary obligor in these contracts due to being responsible for fulfilling the customer contract, establishing pricing with the customer, and taking on credit risk from the customer. The Company recognizes revenue from these contracts with customers on a gross basis. Digital product sales represent electronic content that is transferred to the customer at time of purchase. The Company also earns revenue from online course subscriptions that may have monthly or annual subscriptions. In circumstances when a customer purchases an annual subscription upfront, the Company defers the revenue until the performance obligation has been satisfied.
Revenue is recognized based on the following five step model:
| - | Identification of the contract with a customer |
| - | Identification of the performance obligations in the contract |
| - | Determination of the transaction price |
| - | Allocation of the transaction price to the performance obligations in the contract |
| - | Recognition of revenue when, or as, the Company satisfies a performance obligation |
The Company amortizes acquired definite-lived intangible assets over their estimated useful lives. Other indefinite-lived intangible assets are not amortized but subject to annual impairment tests.
Long-lived Assets
Property and equipment are stated on the basis of historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Major renewals and improvements are capitalized, while minor replacements, maintenance and repairs are charged to current operations.
In accordance with ASC 360 “Property Plant and Equipment,” the Company reviews the carrying value of intangibles subject to amortization and long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
| 60 |
| Table of Contents |
Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.
Non-GAAP Financial Measures
We present below certain financial information based on our EBITDA and EBITDA As Defined. References to “EBITDA” mean earnings before interest, taxes, depreciation and amortization, and references to “EBITDA As Defined” mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and EBITDA As Defined and the reconciliations of net cash provided by operating activities to EBITDA and EBITDA As Defined presented below.
Neither EBITDA nor EBITDA As Defined is a measurement of financial performance under U.S. GAAP. We present EBITDA and EBITDA As Defined because we believe they are useful indicators for evaluating operating performance and liquidity.
Our management believes that EBITDA and EBITDA As Defined are useful as indicators of liquidity because securities analysts, investors, rating agencies and others use EBITDA to evaluate a company’s ability to incur and service debt. In addition, EBITDA As Defined is useful to investors because the revolving credit facility under our senior secured credit facility requires compliance under certain circumstances, on a pro forma basis, with a financial covenant that measures the ratio of the amount of our secured indebtedness to the amount of our Consolidated EBITDA defined in the same manner as we define EBITDA As Defined herein.
In addition to the above, our management uses EBITDA As Defined to review and assess the performance of the management team in connection with employee incentive programs and to prepare its annual budget and financial projections. Moreover, our management uses EBITDA As Defined to evaluate acquisitions.
Although we use EBITDA and EBITDA As Defined as measures to assess the performance of our business and for the other purposes set forth above, the use of these non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:
| · | neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness; |
| · | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements; |
| · | the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined; |
| · | neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and |
| · | EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions. |
Because of these limitations, EBITDA and EBITDA As Defined should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA or EBITDA As Defined in isolation and specifically by using other U.S. GAAP measures, such as net income, net sales and operating profit, to measure our operating performance. Neither EBITDA nor EBITDA As Defined is a measurement of financial performance under U.S. GAAP, and neither should be considered as an alternative to net income or cash flow from operations determined in accordance with U.S. GAAP. Our calculation of EBITDA and EBITDA As Defined may not be comparable to the calculation of similarly titled measures reported by other companies.
| 61 |
| Table of Contents |
The following table sets forth a reconciliation of net income to EBITDA and EBITDA As Defined:
|
| For the Year ended December 31, 2025 |
|
| For the Year ended December 31, 2024 |
| ||
Net loss |
| $ | (2,540,368 | ) |
| $ | (1,773,942 | ) |
Interest expense, net |
|
| 498,409 |
|
|
| 101,667 |
|
Taxes |
|
| 17,390 |
|
|
| - |
|
Depreciation and amortization expense |
|
| 1,201,161 |
|
|
| 906,737 |
|
EBITDA |
|
| (823,408 | ) |
|
| (765,538 | ) |
Impairment losses |
|
| 733,962 |
|
|
| 121,000 |
|
Stock-based compensation (1) |
|
| 240,653 |
|
|
| 56,887 |
|
EBITDA As Defined |
| $ | 151,207 |
|
| $ | (587,651 | ) |
(1) | Represents the compensation expense recognized under our stock option plans and deferred compensation plans. |
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data
Our Financial Statements are attached as Appendix A (following Exhibits) and included as part of this Form 10-K Report. A list of our Financial Statements is provided in response to Item 15 of this Form 10-K Report.
Item 9. Changes In And Disagreements With Accountants On Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of December 31, 2025. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer determined that our disclosure controls and procedures are not effective due to material weaknesses in our internal control over financial reporting as identified below:
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected.
| 62 |
| Table of Contents |
We are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in this Form 10-K. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The SEC defines a material weakness as a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be detected or prevented on a timely basis. Management conducted an evaluation of the effectiveness, as of December 31, 2025, of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective, due to the material weakness in our internal control over financial reporting that exists as of December 31, 2025. We determined that we had a material weakness because:
| · | The Company has a limited number of accounting and financial reporting personnel, which restricts its ability to maintain adequate segregation of duties across its financial reporting processes. This lack of segregation of duties is a pervasive control deficiency that contributes to the specific material weaknesses described below. |
| · | The design and maintenance of controls over the accounting for website design and implementation and website management revenues was ineffective. These control deficiencies resulted in immaterial adjustments to the consolidated financial statements. |
During 2024, the design and maintenance of effective internal controls over the accounting for impairment of goodwill and intangible assets and purchase accounting was ineffective. Specifically, certain control activities to ensure the impairment testing was performed in the appropriate order and that the assumptions used in developing the estimated fair value of the assets subject to impairment testing were not performed on a timely basis or at the appropriate level of precision. These control deficiencies resulted in the revision of the Company’s consolidated financial statements for the year ended December 31, 2023 and the quarterly periods in 2024. As described below under “Changes in Internal Controls over Financial Reporting,” management implemented remediation measures during 2025 to address this material weakness.
Management’s Plan to Remediate the Material Weakness
With the oversight of senior management, management is working towards remediation of these weaknesses in 2026 including addition of accounting personnel and to evaluate and implement procedures that will strengthen our internal controls. While we believe these measures will remediate the material weakness identified and strengthen our internal control over financial reporting, there is no assurance that we will demonstrate sufficient improvement that the material weakness will be remediated. We are committed to continuing to improve our internal control processes and will continue to diligently review our financial reporting controls and procedures.
Attestation Report of the Registered Public Accounting Firm
This Annual Report does not include an attestation report of our Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit our Company to provide only management’s attestation in this Annual Report.
| 63 |
| Table of Contents |
Changes in Internal Controls over Financial Reporting
During the year ended December 31, 2025, management implemented the following changes to its internal control over financial reporting to remediate the previously identified material weakness related to the design and execution of review controls over impairment testing of goodwill and intangible assets:
| · | Redesigned the impairment review control. Management established a formalized, multi-step impairment assessment process aligned with ASC 350 (goodwill and indefinite-lived intangible assets) and ASC 360 (long-lived assets). The process includes a structured triggering-event assessment against the indicators prescribed by ASC 360-10-35-21, recoverability testing using undiscounted future cash flows, and fair value measurement using discounted cash flow models with independently benchmarked assumptions for discount rates, growth rates, survivability factors, and terminal value multiples. |
| · | Established segregation of duties and independent review. Management engaged a technically qualified outside accounting consultant with impairment and valuation expertise to serve as the independent reviewer. The impairment analysis is prepared by the Company’s external consultant, independently reviewed by the outside accounting consultant, and approved by the Chief Financial Officer. No individual may both prepare and approve the analysis. |
| · | Implemented standardized review documentation and evidence retention. Management developed a comprehensive process overview checklist that documents each step of the impairment assessment, the responsible preparer and reviewer, and dated sign-offs for each procedure performed. Review evidence includes annotated models, independent recalculation tie-outs, sensitivity analyses, and formal conclusions at each stage. |
| · | Enhanced the precision and rigor of key assumption evaluation. The redesigned review procedures require the independent reviewer to evaluate and document the reasonableness of discount rates (benchmarked against weighted average cost of capital), long-term growth rates (benchmarked against economic indicators), revenue and margin forecasts (tested against historical actuals and budgets), and terminal value methodology. |
Management believes the remediation measures described above have been designed effectively to conclude that the material weakness related to impairment testing has been remediated as of December 31, 2025. The remaining material weaknesses related to the limited size of the Company’s accounting staff and the resulting inability to maintain adequate segregation of duties over the review and documentation of manual journal entries and the accounting for website design and implementation and website management revenues have not yet been fully remediated. Management continues to work toward remediation of these weaknesses through the addition of accounting personnel and implementation of enhanced review procedures commensurate with the Company’s size and resources.
Item 9B. Other Information
(b) Trading Arrangements
During the three months ended December 31, 2025, none of our
On December 30, 2025, Dominic Wells, our CEO and a member of our Company’s Board of Directors, adopted a “non-Rule 10b5–1 trading arrangement” as defined in Item 408(c) of Regulation S-K. The arrangement provided for the purchase of 74,500 shares of the Company’s common stock and it terminated on December 31, 2025, after all of the shares of common stock were purchased. The trading arrangement was adopted during an open trading window and satisfied the Company’s policies regarding insider transactions.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
| 64 |
| Table of Contents |
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Identity of directors, executive officers and significant employees
Name |
|
Age |
| Year First Elected Director |
| Positions/Committees |
| Independent |
Dominic Wells |
| 40 |
| 2020 |
| Chief Executive Officer, Chief Revenue Officer, Secretary, Treasurer, Director (Chair of Board) |
| No |
Adam Trainor |
| 42 |
|
|
| Interim Chief Financial Officer, Chief Operations Officer |
|
|
Andrew Lawrence |
| 56 |
| 2022 |
| Director, Compensation Committee, Nominating and Corporate Governance Committee (Chair) |
| Yes |
David McKeegan |
| 51 |
| 2022 |
| Director, Compensation Committee, Audit Committee, Nominating and Corporate Governance Committee |
| Yes |
Robert J. Lipstein |
| 70 |
| 2022 |
| Director, Audit Committee (Chair) |
| Yes |
Mark N. Schwartz |
| 70 |
| 2022 |
| Director, Audit Committee, Compensation Committee (Chair) |
| Yes |
Business experience of directors, executive officers, and significant employees
Dominic Wells. Dominic Wells has served as our Chief Executive Officer since August 2020 and as a Director since July 2020, and as Chief Executive Officer of Onfolio LLC since May 2019. He is responsible for developing and implementing our Company’s long term business strategy and direction. From August 2013 to April 2019, Mr. Wells was the founder and director of Digital Wells Limited (Hong Kong), where he grew the Company and the Human Proof Designs (Humanproofdesigns.com) website. Human Proof Designs is an internet marketing agency offering website creation, search engine optimization services, content marketing and content creation services, and affiliate marketing training. After founding Digital Wells Limited (Hong Kong) and growing it for 5 years, Mr. Wells exited the company in 2019. Mr. Wells’ qualifications to serve on our Board include his knowledge of our Company and his leadership at our Company. Mr. Wells completed a BA (Hons) in Media Practice & Theory from the University of Sussex, UK in 2006.
Adam Trainor. Adam Trainor has served as our Chief Operations Officer since February 2022, and as the Company’s Interim Chief Financial Officer since January 1, 2025. Prior to that Mr. Trainor served as the director of a portfolio of our Company from November 2020 to January 2022, overseeing Vital Reaction LLC, Outreachama LLC, Getmerankings LLC, alongside various content/media properties. He is responsible for executing our business strategy and managing portfolio/department leadership. Before joining Onfolio, Mr. Trainor served as the CEO of Vital Reaction LLC, from April 2019 to December 2020. Mr. Trainor is also a board certified chiropractic physician and clinical nutritionist and has worked in a variety of pain management settings, including at Walter Reed National Military Medical Center in Bethesda, MD from November 2018 to April 2019. Also, from September 2010 to January 2019, Mr. Trainor served as the founder and CEO of Thirdspace LLC, an academic tutoring agency where he ran all aspects of the agency. Mr. Trainor graduated summa cum laude with a BA in History from Boston University in 2012. He also holds a Doctorate in chiropractic medicine (2019) and Masters of Science in clinical nutrition (2018) from the Northeast College of Health Sciences.
Andrew Lawrence. A.J. Lawrence has served as a director since January 2022. Since June 2006 he has been the founder and director of the JAR Group & subsidiaries (USA), where he grew the company to reach the Inc. 500 twice and win many industry awards. The JAR Group is an internet marketing agency offering analytics, media buying, search engine optimization services, content marketing, content creation services, and affiliate program management. After founding the JAR group and growing it for 10 years, Mr. Lawrence sold the media buying, SEO, and affiliate program management divisions of the company. Mr. Lawrence’s qualifications to serve on our Board include his knowledge of our industry, multiple angel investments, and advisory roles, and his executive management experience. Mr. Lawrence completed a BA in International Relations 1991 & an MBA in International Business in 1994 from the University of South Carolina.
David McKeegan. David McKeegan has served as a Director since January 2022. Mr. McKeegan was the Co-founder and CEO of Greenback ETS which was founded in 2009 and serves thousands of U.S. expat clients around the world become and stay compliant with their U.S. taxes while overseas. He is also the Co-founder and CEO of Cleer LLC, which was started in 2018 and serves entrepreneurs and startups who incorporate in the United States. Prior to Co-founding Greenback ETS, Mr. McKeegan was an Associate Director with the Bank of Scotland and worked on their syndicated loan desk for 5 years from 2005-2009. Mr. McKeegan’s qualifications to serve on our Board include his years of experience assisting corporations manage their finances, tax preparation documents and bookkeeping, along with his experience in finance and banking. Mr. McKeegan is an IRS Enrolled Agent, received his MBA from IESE in Barcelona, Spain in 2004 and his BA from Loyola College in Maryland in 1997. Mr. McKeegan also worked for JPMorgan Chase from 1997-2002.
| 65 |
| Table of Contents |
Robert J. Lipstein. Robert J. Lipstein has served as a director since March 2022. In 2021, Mr. Lipstein joined the board of directors of Firstrust Bank and since 2019 has been a board member of Seacoast Banking Corporation of Florida (NASDAQ:SBCF) where he chairs its Audit Committee and is a member of the Enterprise Risk Management Committee, a member of the Directors Credit Risk Committee and a member of the Information Technology committee. Since 2017 he has been a board member of Einstein Healthcare Network. Mr. Lipstein joined the board of directors of Infrasight Software in 2020, a start-up venture that provides software that powers Hybrid IT and Multi-Cloud business decisions. Mr. Lipstein joined the board of Quest Resource Holding Company (NASDAQ:QRHC) in 2025 where he serves as a member of the audit committee. Mr. Lipstein previously served as an independent board member of Ocwen Financial (NYSE), a mortgage loan servicer where he was a member of the Audit Committee and Compensation Committee from 2017 to 2020. In addition, he is a retired KPMG senior partner where he held numerous leadership roles including, Global Partner in Charge of Sarbanes Oxley Services, Global Managing Partner of IT Business Services, Partner in Charge of KPMG’s financial service practice and partner in charge of KPMG’s advisory practice for the Mid-Atlantic region. Mr. Lipstein’s qualifications to serve on our Board include his experience as a public and private company board member and as a certified public accountant, in addition to his over 40 years of diversified business experience. He is a graduate of the University of Pennsylvania Director Institute, an Emeritus member of the Weinberg Center for Corporate Governance and he earned a Bachelor’s degree in Accounting from the University of Delaware.
Mark N. Schwartz. Mark Schwartz has served as a director since March 2022. Previously, from March 2017 to January 2021, he served as member of the Board of Directors and on the Audit and Compensation Committees of The Bartell Drug Company, a $500+ million pharmacy retailer where he led planning and implementation of a successful sale to Rite Aid Drug Corporation. From January 2016 to December 2019, Mr. Schwartz served as a member of the Board of Directors of Glass-Media Inc., an ad- tech software & hardware provider for display advertising, where he advised on successful rounds of company financing. From January 2012 to December 2015, Mr. Schwartz served as a member of the Board of Directors of Specialty Commodities, Inc., a natural, organic food products company selling and processing nuts, seeds, ancient grains, and pet foods, where he consulted on positioning and strategy for sale of the company to Archer Daniels Midland. Mr. Schwartz’s qualifications to serve on our Board include his extensive background as a public and private company CEO, CFO, and board member with experience planning and implementing profit improvement and exit strategies in a variety of consumer, technology, media and healthcare companies. He has extensive mergers and acquisitions, corporate finance, IPO, financial reporting systems, budgetary oversight, and financial and corporate strategy experience to accelerate revenues and profitability. He has served on several audit and compensation committees and has extensive SEC GAAP and Sarbanes-Oxley risk management expertise. Mr. Schwartz received a BA in economics and political science from Claremont McKenna College in 1978 and an MBA from Harvard Business School in 1980. He has attended the UCLA Anderson School Executive Education program in Corporate Governance in 2015.
Each Member of our Board serves until the next annual meeting of stockholders, or until their successors have been duly elected. Each officer is elected annually by the Board and holds their office until they resign or are removed by the Board or otherwise disqualified to serve, or their successor is elected and qualified.
During the past ten years, none of our directors or executive officers have been involved in any of the proceedings described in Item 401(f) of Regulation S-K.
Code of Conduct
Our Company has adopted a code of ethics and business conduct applicable to its employees, directors and officers, in accordance with applicable U.S. federal securities laws and the corporate governance rules of Nasdaq. A copy of this code of ethics and business conduct is available on our principal corporate website located at https://www.onfolio.com. Requests for a copy of the code of ethics and business conduct should be directed to Investor Relations, Onfolio Inc., 1007 North Orange Street, 4th Floor Wilmington, Delaware 19801. Any substantive amendments or waivers of the code of conduct or any similar code(s) subsequently adopted for senior financial officers may be made only by our Board and will be promptly disclosed as required by applicable U.S. federal securities laws and the corporate governance rules of Nasdaq, including by posting such information on our Company’s website or by filing a Form 8-K.
Audit Committee
We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Audit Committee is comprised of Robert Lipstein, Mark Schwartz and David McKeegan. Mr. Lipstein is the chairperson of the committee. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 under the Exchange Act and the NASDAQ Stock Market Rules. Our Board of Directors has designated Robert Lipstein as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. The Audit Committee’s purpose and power are to (a) retain, oversee and terminate, as necessary, the auditors of our Company, (b) oversee our Company’s accounting and financial reporting processes and the audit and preparation of our Company’s financial statements, (c) exercise such other powers and authority as are set forth in the charter of the audit committee of the Board, and (d) exercise such other powers and authority as shall from time to time be assigned thereto by resolution of the Board.
| 66 |
| Table of Contents |
The Audit Committee also has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel and advisors to fulfill its responsibilities and duties. During our last fiscal year, our Audit Committee held 4 meetings.
Changes to Director Nomination Procedures
No material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors has occurred since we last provided disclosure regarding these procedures.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent shareholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. To the best of our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to our Company during its most recent fiscal year and Forms 5 and amendments thereto furnished to our Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of Item 405 of Regulation S-K, all of our executive officers, directors and greater-than-ten percent shareholders complied with all Section 16(a) filing requirements; except that each of Adam Trainor (CFO and COO), Andrew Lawrence (director), David McKeegan (director), Robert J. Lipstein (director), and Mark N. Schwartz (director) each filed one late Form 4.
Hedging Disclosure/Insider Trading
Under our Insider Trading Policy, our directors, officers, and covered employees (and each such individual’s spouse, other persons living in such person’s household and minor children and entities over which such person exercises control, as described in the policy) are prohibited from engaging the following transactions at any time: (i) engaging in short term trading of our securities (ii) engaging in short sales of our securities; (iii) trading in put options, call options or other derivative securities on our securities (iv) holding our securities in a margin account or otherwise pledging our securities as collateral for loan; and (iv) engaging in hedging or monetization transactions or similar arrangements with respect to our securities; unless advance approval for the transaction is obtained from the compliance officer of the policy.
Our Company’s insider trading policy was adopted to govern the purchase and sale of our Company’s securities by our directors, officers, and covered employees to ensure these transactions are conducted in compliance with applicable securities laws, and in particular, to ensure avoiding trading in the Company’s securities while in possession of material, non-public information about our Company.
Item 11. Executive Compensation
The compensation committee of our Board of Directors oversees, reviews and approves all compensation decisions relating to our named executive officers.
The table below summarizes all compensation awarded to, earned by, or paid to our 2025 named executive officers for the fiscal years ended December 31, 2025 and 2024. Our 2025 named executive officers are: Dominic Wells and Adam Trainor.
| 67 |
| Table of Contents |
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers that earned more than $100,000 for the fiscal years ended December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
| Stock |
|
| Option |
|
| All Other |
|
|
|
| |||||||
Name |
| Year(1) |
|
| Salary |
|
| Bonus |
|
| Awards(1) |
|
| Awards(1) |
|
| Compensation |
|
| Total |
| |||||||
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
Dominic Wells |
| 2025 |
|
|
| 240,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 240,000 |
| |
Chief Executive Officer, Chief Revenue Officer, Secretary, Treasurer, Director |
| 2024 |
|
|
| 150,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 150,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Adam Trainor |
| 2025 |
|
|
| 240,000 |
|
|
| - |
|
|
| - |
|
|
| 116,005 |
|
|
| - |
|
|
| 356,005 |
| |
Chief Operations Officer and Interim Chief Financial Officer |
| 2024 |
|
|
| 141,000 |
|
|
| - |
|
|
| - |
|
|
| 8,867 |
|
|
| - |
|
| 149,867 |
| ||
___________________________
1. | The grant date fair value of the stock awards and option awards computed in accordance with ASC Topic 718. |
We grant stock awards and stock options to our executive officers based on their level of experience and contributions to our Company. The aggregate fair value of awards and options are computed in accordance with FASB ASC 718. The assumptions made in the computation may be found in Note 9 to our financial statements set forth elsewhere within this Report on Form 10-K.
At no time during the last fiscal year was any outstanding option otherwise modified or re-priced, and there was no tandem feature, reload feature, or tax-reimbursement feature associated with any of the stock options we granted to our executive officers or otherwise.
Employee, Severance, Separation and Change in Control Agreements
Dominic Wells Employment Agreement.
On August 1, 2020, and January 1, 2022, our Company entered into a written employment agreement with Mr. Wells as its Chief Executive Officer providing for an annual salary of $120,000 per year and $150,000 per year, respectively. On January 1, 2025, our Company entered into a new employment agreement with Mr. Wells as its Chief Executive Officer. Pursuant to this agreement, Mr. Wells receives an annual salary of $240,000, which is paid semi-monthly in accordance with our Company’s normal payroll procedures. Mr. Wells is also eligible to receive certain employee benefits and bonuses under any bonus under any bonus plan program that may be established by our Board of Directors. Mr. Wells also serves as a member of our Board for no additional compensation. In the event that Mr. Wells leaves the Company’s employment for Good Reason (as defined in his employment agreement) or if the Company terminates his employment without Cause (as defined in his employment agreement) , Mr. Wells will be entitled to receive severance in an amount equal to one day of base salary for every completed work day of employment with the Company, up to a maximum of three (3) months of base salary.
| 68 |
| Table of Contents |
Adam Trainor Employment Agreement.
Our Company entered into an employment agreement dated February 1, 2022, with Mr. Trainor as its Chief Operations Officer providing for an annual salary of $96,000 per year. On January 1, 2023, Mr. Trainor received an increase to his salary to $109,000 annually, and on October 1, 2024, he received a further increase to his salary to $240,000. On January 1, 2025, our Company entered into a new employment agreement with Mr. Trainor as its Interim Chief Financial Officer and Chief Operations Officer. Pursuant to the agreement, Mr. Trainor receives an annual salary of $240,000, which is paid semi-monthly in accordance with our Company’s normal payroll procedures. Mr. Trainor is also eligible to receive certain employee benefits and bonuses under any bonus plan program that may be established by our Board of Directors. In the event that Mr. Trainor leaves the Company’s employment for Good Reason (as defined in his employment agreement) or if the Company terminates his employment without Cause (as defined in his employment agreement), Mr. Trainor will be entitled to receive severance in an amount equal to one day of base salary for every completed work day of employment with the Company, up to a maximum of three (3) months of base salary.
Benefits and Other Compensation
We maintain broad-based benefits that are provided to all of our employees, including reimbursement of private health insurance, tech allowances, and education and professional development plans, that named executive officers participate in. Executives are eligible to participate in all of our employee benefit plans, in each case on the same terms as our other employees. No employee benefit plans are in place solely for the benefit of our executives.
Change in Control Benefits
Pursuant to the terms of our 2020 Equity Incentive Plan, our executives are entitled to certain benefits in the event of a change in control of our Company or the termination of their employment under specified circumstances, including termination following a change in control. We believe these benefits help us compete for and retain executive talent and are generally in line with severance packages offered to executives by the companies in our peer group. We also believe that these benefits would serve to minimize the distraction caused by any change in control scenario and reduce the risk that key talent would leave the Company before any such transaction closes, which could reduce the value of the Company if such transaction failed to close.
| 69 |
| Table of Contents |
Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all of the outstanding equity awards for our named executive officers as of December 31, 2025, our latest fiscal year end.
|
| Option Awards |
|
|
|
| Stock Awards |
| ||||||||||||||||||||||||||||
Name |
| Number of securities underlying unexercised options(#) exercisable |
|
| Number of securities underlying unexercised options(#) unexercisable |
|
| Equity incentive plan awards: number of securities underlying unexercised unearned options |
|
| Option exercise price |
|
| Option expiration date |
|
| Number of shares or units of stock that have not vested |
|
| Market value of shares of units of stock that have not vested |
|
| Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested |
|
| Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested |
| |||||||||
|
| (#) |
|
| (#) |
|
| (#) |
|
| ($) |
|
|
|
| (#) |
|
| ($) |
|
| (#) |
|
| ($) |
| ||||||||||
(a) |
| (b) |
|
| (c) |
|
| (d) |
|
| (e) |
|
| (f) |
|
| (g) |
|
| (h) |
|
| (i) |
|
| (j) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Dominic Wells |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adam Trainor |
|
| 200,000 | (1) |
|
| - |
|
|
| - |
|
|
| 1.08 |
|
| 3/26/2029 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |
| 1. | Vested immediately. |
Director Compensation
Compensation for our directors is discretionary and is reviewed from time to time by our Board of Directors. Any determinations with respect to Board compensation are made by our Board of Directors. During Fiscal year 2025, each of our independent directors who serve on our Board received 30,000 stock options and a quarterly stipend of $5,000 payable in cash. Additionally, the chair of our (i) audit committee receives an additional quarterly stipend of $2,500 payable in cash; and (ii) compensation committee receives an additional quarterly stipend of $1,250 payable in cash. Additionally, the chair of our audit committee receives an additional quarterly stipend of $2,500 payable in cash. All directors are also entitled to reimbursement for travel expenses for attending director meetings.
The following table summarizes compensation earned by our Company’s directors for the year ended December 31, 2025. All directors have been and will be reimbursed for reasonable expenses incurred in connection with attendance at meetings of the Board of Directors or other activities undertaken by them on behalf of our Company.
Name |
| Fees earned or paid in Cash ($) |
|
| Stock awards ($) |
|
| Option awards(2) ($) |
|
| Nonequity incentive plan compensation ($) |
|
| Nonqualified deferred compensation earnings ($) |
|
| All other compensation ($) |
|
| Total ($) |
| |||||||
Dominic Wells(1) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Andrew Lawrence |
|
| 20,000 |
|
|
| — |
|
|
| 26,476 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 46,476 |
|
David McKeegan |
|
| 20,000 |
|
|
| — |
|
|
| 26,476 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 46,476 |
|
Robert J. Lipstein |
|
| 30,000 |
|
|
| — |
|
|
| 26,476 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 56,476 |
|
Mark N. Schwartz |
|
| 25,000 |
|
|
| — |
|
|
| 26,476 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 51,476 |
|
———————
1. | Serves as an executive officer and a director, but receives no additional compensation for serving as a director. |
2. | The option awards in this column reflect 30,000 options issued on March 25, 2025 to purchase shares of our Company’s common stock at an exercise price of $1.10 that vest pursuant to the following schedule: 50% of the options vest immediately, and the remaining options vest on December 31, 2025. The aggregate fair value of awards and options in this column are computed in accordance with FASB ASC 718. All assumptions made in the valuation are more fully described in Note 9 – Stockholder’s Deficit of Notes to Financial Statements. The amounts shown in this column do not reflect dollar amounts actually received. |
Compensation Policies and Practices as They Relate to Our Risk Management
Our compensation program for employees does not create incentives for excessive risk taking by our employees or involve risks that are reasonably likely to have a material adverse effect on us. Our compensation has the following risk-limiting characteristics:
| · | Our base pay consists of competitive salary rates that represent a reasonable portion of total compensation and provide a reliable level of income on a regular basis, which decreases incentive on the part of our executives to take unnecessary or imprudent risks; |
| · | Option awards are not tied to formulas that could focus executives on specific short-term outcomes; and |
| · | Option awards, generally, have multi-year vesting which aligns the long-term interests of our executives with those of our shareholders and, again, discourages the taking of short-term risk at the expense of long-term performance. |
| 70 |
| Table of Contents |
Additionally, we have adopted a Nasdaq compliant compensation recovery policy (a “clawback policy”) that applies to incentive compensation.
Recovery of Erroneously Awarded Compensation
None
Equity Grant Timing
The Board and Compensation Committee does not grant equity awards to executives or directors pursuant to any predetermined schedule. The Board and Compensation Committee considers and approves interim or mid-year grants, from time to time based on business needs. The Board and Compensation Committee takes material nonpublic information into account when determining the timing and terms of equity awards, and, the Compensation Committee does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of March 31, 2026 the stock ownership of (1) each person or group known to our Company to beneficially own 5% or more of our common stock and (2) each director and Named Executive (as set forth in Item 11. Executive Compensation) individually, and (3) all directors and executive officers of our Company as a group. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table below has sole voting and investment power with respect to the shares set forth opposite such person’s name. Except as otherwise indicated, the address of each of the persons in the table below is c/o Onfolio Holdings Inc., 1007 North Orange Street, 4th Floor, Wilmington, DE 19801.
Common Stock | ||||||||
Name of Beneficial Owner |
| Number Of Shares Beneficially Owned |
|
| Percentage of Class (1)(2)(3) |
| ||
5% Shareholders(4) |
|
|
|
|
|
| ||
Joel Arberman(5) |
|
| 524,404 |
|
|
| 8.2 | % |
6162 Dusenburg Road, Delray Beach, Florida 33484 |
|
|
|
|
|
|
|
|
ATW Digital Assets XI LLC (6) |
|
| 650,522 |
|
|
| 9.9 | % |
1 Pennsylvania Plaza, Suite 4810, New York, New York 10119 |
|
|
|
|
|
|
|
|
Alta Partners LLC(7) |
|
| 630,470 |
|
|
| 9.7 | % |
1205 Franklin Avenue, Garden City, New York 11530 |
|
|
|
|
|
|
|
|
Valarseo LLC(8) |
|
| 370,371 |
|
|
| 6.3 | % |
10225 Ulmerton Rd 3D, Largo, Florida 33771 |
|
|
|
|
|
|
|
|
Adam Garcia(9) |
|
| 328,280 |
|
|
| 5.6 | % |
16785 Broadwater Ave, Winter Garden, Florida 34787 |
|
|
|
|
|
|
|
|
Directors and Named Executive Officers |
|
|
|
|
|
|
|
|
Dominic Wells(10) , CEO, CRO, Director (Chair of Board) |
|
| 1,716,931 |
|
|
| 27.1 | % |
Adam Trainor(11), Interim Chief Financial Officer, Chief Operations Officer |
|
| 200,000 |
|
|
| 3.3 | % |
Andrew “A.J.” Lawrence(12), Director |
|
| 45,700 |
|
| * |
| |
David McKeegan(12), Director |
|
| 45,700 |
|
| * |
| |
Robert J. Lipstein(12), Director |
|
| 45,700 |
|
| * |
| |
Mark Schwartz(12), Director |
|
| 45,700 |
|
| * |
| |
All Executive Officers and Directors as a Group (6 individuals) (13) |
|
| 2,099,731 |
|
|
| 33.5 | % |
_____________
* Less than 1.0%.
| 71 |
| Table of Contents |
| 1. | Where the Number of Shares Beneficially Owned (reported in the preceding column) includes shares which may be purchased upon the exercise of outstanding stock options and warrants which are or within sixty days will become exercisable (“presently exercisable options”) the percentage of class reported in this column has been calculated assuming the exercise of such presently exercisable options. |
| 2. | Based on 5,863,215 shares of common stock outstanding on March 31, 2026. |
| 3. | If a person listed on this table has the right to obtain additional shares of common stock within 60 days from the Record Date, the additional shares are deemed to be outstanding for the purpose of computing the percentage of class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of any other person. |
| 4. | Based upon a review of Schedule 13G and Schedule 13G/A filings with the SEC and the Company’s certified shareholder list from VStock Transfer as of December 31, 2025. |
| 5. | Based on Schedule 13G/A filed with the SEC on September 16, 2025. Represents 524,404 immediately exercisable warrants to purchase 524,404 shares of common stock. |
| 6. | Based on Schedule 13G filed with the SEC on February 11, 2026. Represents 569,077 shares of common stock. The common stock represents the approximate number of shares which ATW Digital Assets XI LLC (the "Holding Company") has the right to acquire within sixty (60) days through the conversion and/or exercise of senior secured convertible debt ("Convertible Debt") and rights to receive shares of Common Stock ("Rights Shares") issued by the Company. The Holding Company is wholly owned by ATW Master Fund V Inc., which is wholly owned by the private fund, ATW Master Fund V LP (the "Fund"). ATW Partners Opportunities Management, LLC (the "Adviser") serves as the investment manager to the Fund. Antonio Ruiz-Gimenez and Kerry Propper are control persons of the Adviser (the "Control Persons," and collectively with the Holding Company, ATW Master Fund V Inc., the Fund, and the Adviser, the "Reporting Persons"). By virtue of these relationships, the Reporting Persons may be deemed to have shared voting and dispositive power with respect to the Shares owned directly by the Holding Company. |
| 7. | Based on Schedule 13G/A (Amendment No. 2) filed with the SEC on November 18, 2025. Represents 630,470 immediately exercisable warrants to purchase 630,470 shares of common stock. Steven Cohen serves as the Managing Member of Alta Partners, LLC. |
| 8 | Based on the Company’s certified shareholder list from VStock Transfer as of December 31, 2025. Represents 370,371 shares of restricted common stock. Lorenzo Cagni serves as the CEO of Valarseo LLC. |
| 9 | Based on Schedule 13G filed with the SEC on June 11, 2025, and the Company’s certified shareholder list from VStock Transfer as of December 31, 2025. Includes 268,597 shares of common stock, 37,038 shares of restricted common stock issued in connection with the Company’s October 2025 private placement, and 22,645 immediately exercisable warrants to purchase 22,645 shares of common stock. |
| 10. | Includes 1,240,000 shares of common stock and 476,931 immediately exercisable warrants to purchase 476,931 shares of common stock. |
| 11. | Represents 200,000 immediately exercisable options. |
| 12. | Includes 700 shares of common stock and 45,000 immediately exercisable options. |
| 13. | Includes an aggregate of 1,242,800 shares of common stock, 476,931 warrants, and 380,000 stock options beneficially owned by all executive officers and directors as a group. |
We are not aware of any arrangements that could result in a change of control.
Securities Authorized for Issuance under Equity Compensation Plans
Information regarding our compensation plans under which our equity securities are authorized for issuance can be found in Part II –Item 5 of this Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Transactions with Related Persons
From time to time, the Company pays expenses directly on behalf of the Joint Ventures that it manages and receives funds on behalf of the joint ventures. As of December 31, 2025 and 2024 the balances due from related parties were $58,195 and $89,536, respectively, included in due from related parties.
From time to time, the Company’s CEO paid expenses on behalf of the Company, and the Company funded certain expenses to the CEO. Additionally, the Company received its investments in JV I, JV II and JV III from the CEO. As of December 31, 2025 and 2024, the Company was owed $36,994 by the entities controlled by the Company’s CEO.
No member of management has benefited from the transactions with related parties.
For additional information, see Note 10 – Related Party Transaction to our audited financial statements appearing elsewhere in Report on Form 10-K.
| 72 |
| Table of Contents |
Policies and Procedures for Related-Party Transactions
Our Audit Committee considers and approves or disapproves any related person transaction as required by NASDAQ regulations.
Director Independence Standards
Applicable NASDAQ rules require a majority of a listed company’s board of directors to be comprised of independent directors. In addition, the NASDAQ rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. Under applicable NASDAQ rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.
Director Independence
In March 2026, our Board of Directors undertook a review of the composition of our Board of Directors and its committees and the independence of each of our directors. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that each of Andrew “A.J.” Lawrence, David McKeegan, Robert J. Lipstein, and Mark Schwartz are “independent directors” as defined under applicable NASDAQ Stock Market Rules and Exchange Act Rules. In making such determination, our Board of Directors considered the relationships that each such non-employee director has/had with our Company and all other facts and circumstances that our Board of Directors deemed relevant in determining his/her independence, including the beneficial ownership of our capital stock by each non-employee director. The one member of our Board of Directors who is not an “independent director” is Dominic Wells as a result of his executive officer status with our Company.
Item 14. Principal Accountant Fees and Services
Astra Audit & Advisory, LLC (“Astra”) was our independent registered public accounting firm for our fiscal year ended December 31, 2025 and December 31, 2024. BF Borgers CPA PC (“BF Borgers”) was our independent registered public accounting firm at the start of the fiscal year ended December 31, 2024. The SEC entered an Order denying BF Borgers the privilege of appearing or practicing before the SEC as an accountant. The Company subsequently dismissed BF Borgers as its independent registered public accounting firm, effective May 3, 2024 and Astra was appointed as the Company’s independent registered public accounting firm on May 14, 2024. The aggregate fees billed for professional services by Astra and BF Borgers during 2025 and 2024 were as follows:
Astra Audit & Advisory, LLC
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Audit Fees |
| $ | 348,730 |
|
| $ | 229,000 |
|
Audit-Related Fees |
| $ | 12,500 |
|
| $ | 78,000 |
|
Tax Fees |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
BF Borgers CPA PC
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Audit Fees |
| $ | - |
|
| $ | 7,500 |
|
Audit-Related Fees |
| $ | - |
|
| $ | 55,000 |
|
Tax Fees |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
| 73 |
| Table of Contents |
Audit Fees are the aggregate fees billed during the years ended December 31, 2025 and December 31, 2024 for professional services rendered by Astra and BF Borgers, respectively, for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Q or services that are normally in connection with statutory and regulatory filings or engagements. Audit fees for 2025 were higher than in the prior year primarily due to increased audit complexity, including work related to the Eastern Standard acquisition, the valuation and accounting analysis of the Company’s convertible note, and the Company’s digital asset activities.
Audit-Related Fees are the aggregate fees billed during the years ended December 31, 2025 and December 31, 2024 for assurance and related services rendered by Astra and BF Borgers, respectively, that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under the category Audit Fees described above. For 2025, these fees consisted primarily of amounts billed for work performed in connection with the audit of the Eastern Standard acquisition. Audit-related fees decreased from the prior year due to the absence of acquisition activity in 2025.
Tax Fees are the aggregate fees billed during the years ended December 31, 2025 and December 31, 2024 for tax compliance services rendered. No tax services were rendered by either Astra or BF Borgers.
All Other Fees are the aggregate fees billed during the years ended December 31, 2025 and December 31, 2024 for products and services provided by Astra and BF Borgers, respectively, other than the services reported in the Audit Fees, Audit-Related Fees, and Tax Fees categories above.
Audit Committee Pre-Approval Policies.
All the services performed by Astra and BF Borgers that are described above were pre-approved by the Company’s audit committee. The Audit Committee pre-approves all audit and permissible non-audit services on a case-by-case basis.
None of the hours expended on Astra’s and BF Borgers’ engagement to audit the Company’s financial statements for the years ended December 31, 2025 and December 31, 2024 were attributed to work performed by persons other than Astra’s and BF Borgers’ full-time, permanent employees.
| 74 |
| Table of Contents |
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) | The following Audited Financial Statements are filed as part of this Form 10-K Report: |
|
|
| F-2 |
| |
| F-3 |
| |
| F-4 |
| |
| F-5 |
| |
| F-8 |
| |
| F-7 |
| |
|
|
|
|
(b) | The following exhibits are filed as part of this report. |
| 75 |
| Table of Contents |
Exhibit No. |
| Description of Exhibit |
| Location |
|
| Incorporated by reference to Company’s Form 8-K filed on 01/04/24 | ||
| Incorporated by reference to Company’s Form 8-K filed on 09/24/24 | |||
|
| Incorporated by reference to Company’s Form 8-K filed on 10/22/2024 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 08/16/22 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/26/22 | ||
| Warrant Agency Agreement, dated August 30, 2022, between the Company and VStock Transfer LLC |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 8/30/22 | |
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 8/30/2022 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 7/25/22 | ||
|
| Incorporated by reference to Company’s Form 8-K filed on 10/19/22 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 5/13/22 | ||
|
| Filed Herewith | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 9/20/22 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 8/1622 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
| Form of Non-Qualified Stock Option Award Agreement - Consultants |
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | |
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 |
| 76 |
| Table of Contents |
| Form of Non-Qualified Stock Option Award Agreement - Non Employee Directors |
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | |
| Form of Stock Option Exercise Agreement - Non Employee Directors |
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | |
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
|
| Filed Herewith | ||
| Employment Agreement dated as of January 1, 2022, by the Company and Dominic Wells |
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | |
|
| Incorporated by reference to Company’s Form 10-Q filed with the SEC on 08/14/2025 | ||
| Employment Agreement dated as of February 1, 2022, by the Company and Adam Trainor | Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
| Employee Agreement dated as of December 19, 2024, by the Company and Adam Trainor |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 12/20/2024 | |
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 04/07/22 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 01/04/24 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 10/22/2024 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 10/22/2024 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 10/22/2024 | ||
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 10/22/2024 | ||
| Securities Purchase Agreement between the Company and Buyers, dated November 17, 2025 |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 | |
| Form of Senior Secured Convertible Note dated November 17, 2025 |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 | |
| Form of Right to Receive Common Stock dated November 17, 2025 |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 | |
| Form of Security and Pledge Agreement dated November 17, 2025 |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 | |
|
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 | ||
| Form of Registration Rights Agreement dated November 17, 2025 |
| Incorporated by reference to Company’s Form 8-K filed with the SEC on 11/19/25 |
|
| Incorporated by reference to Company’s Form S-1 Registration Statement filed with the SEC on 05/13/22 | ||
|
| Incorporated by reference to Company’s Form 10-K filed with the SEC on 4/16/25 |
| 77 |
| Table of Contents |
|
| Filed herewith | ||
| Consent of Independent Registered Public Accounting Firm – Astra Audit & Advisory, LLC |
| Filed herewith | |
|
| Filed herewith | ||
|
| Filed herewith | ||
|
| Furnished | ||
|
| Furnished | ||
|
| Incorporated by reference to Company’s Form 10-K filed on 04/01/24 | ||
|
|
|
|
|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
|
|
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
Item 16. Form 10-K Summary
None
| 78 |
| Table of Contents |
Appendix A
Financial Statements
FINANCIAL STATEMENTS
| F-2 |
| |
| F-3 |
| |
| F-4 |
| |
| F-5 |
| |
| F-6 |
| |
| F-7 |
|
| F-1 |
| Table of Contents |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and
Stockholders of Onfolio Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Onfolio Holdings, Inc. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has recurring net losses and negative cash flow from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Astra Audit & Advisory, LLC | |
|
|
We have served as the Company’s auditor since 2024. | |
3702 W Spruce St # 1430 |
|
Firm ID |
|
March 31, 2026 |
|
3702 W Spruce St #1430 • Tampa, Florida 33607 • +1.813.441.9707 |
| F-2 |
| Table of Contents |
FINANCIAL STATEMENTS
Onfolio Holdings, Inc.
Consolidated Balance Sheets
|
| December 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Assets | ||||||||
|
|
|
|
|
|
| ||
Current Assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Accounts receivable, net |
|
|
|
|
|
| ||
Inventory |
|
|
|
|
|
| ||
Prepaids and other current assets |
|
|
|
|
|
| ||
Total Current Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
| ||
Goodwill |
|
|
|
|
|
| ||
Fixed assets |
|
|
|
|
|
| ||
Due from related party |
|
|
|
|
|
| ||
Investment in digital assets |
|
|
|
|
|
| ||
Investment in unconsolidated joint ventures, cost method |
|
|
|
|
|
| ||
Investment in unconsolidated joint ventures, equity method |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total Assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Liabilities and Stockholder’s Equity | ||||||||
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and other current liabilities |
| $ |
|
| $ |
| ||
Dividends payable |
|
|
|
|
|
| ||
Notes payable – current |
|
|
|
|
|
| ||
Notes payable – related parties, current |
|
|
|
|
|
| ||
Contingent consideration |
|
|
|
|
|
| ||
Deferred revenue |
|
|
|
|
|
| ||
Derivative liability |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Notes payable |
|
|
|
|
|
| ||
Notes payable - related parties |
|
|
|
|
|
| ||
Convertible notes, net of discount |
|
|
|
|
|
| ||
Total Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Commitments and Contingencies – Note 16 |
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Preferred stock, $ |
|
|
|
|
|
|
|
|
Series A Preferred stock, $ |
|
|
|
|
|
| ||
Common stock, $ |
|
|
|
|
|
| ||
Additional paid-in capital |
|
|
|
|
|
| ||
Accumulated other comprehensive income |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total Onfolio Inc. stockholders’ equity |
|
|
|
|
|
| ||
Non-Controlling Interests |
|
|
|
|
|
| ||
Total Stockholders’ Equity |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
| Table of Contents |
Onfolio Holdings, Inc.
Consolidated Statements of Operations
|
| For the Year Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Revenue, services |
| $ |
|
| $ |
| ||
Revenue, product sales |
|
|
|
|
|
| ||
Total Revenue |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Cost of revenue, services |
|
|
|
|
|
| ||
Cost of revenue, product sales |
|
|
|
|
|
| ||
Total cost of revenue |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
| ||
Professional fees |
|
|
|
|
|
| ||
Impairment of goodwill and intangible assets |
|
|
|
|
|
| ||
Acquisition costs |
|
|
|
|
|
| ||
Total operating expenses |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Equity method income |
|
|
|
|
| ( | ) | |
Dividend income |
|
|
|
|
|
| ||
Interest income (expense), net |
|
| ( | ) |
|
| ( | ) |
Change in fair value of digital assets |
|
| ( | ) |
|
|
| |
Change in fair value of derivative liabilities |
|
|
|
|
|
| ||
Other income |
|
| ( | ) |
|
|
| |
Impairment of investments |
|
| ( | ) |
|
|
| |
Change in fair value of contingent consideration |
|
|
|
|
|
| ||
Gain on sale of subsidiary |
|
|
|
|
|
| ||
Total other income |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Income tax (provision) benefit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net loss |
|
| ( | ) |
|
| ( | ) |
Net loss attributable to noncontrolling interest |
|
| ( | ) |
|
|
| |
Net loss attributable to Onfolio Holdings Inc. |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Preferred Dividends |
|
| ( | ) |
|
| ( | ) |
Net loss to common shareholders |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Net loss per common shareholder |
|
|
|
|
|
|
|
|
Basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
|
| ||
The accompanying notes are an integral part of these consolidated financial statements
| F-4 |
| Table of Contents |
Onfolio Holdings, Inc.
Consolidated Statements of Stockholders’ Equity
For the Years Ended December 31, 2025 and 2024
|
| Preferred Stock, $0.001 Par value |
|
| Common Stock, $0.001 Par Value |
|
| Additional Paid-In |
|
| Accumulated |
|
| Accumulated Other Comprehensive |
|
| Non Controlling |
|
|
Total Stockholders' |
| |||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income |
|
| Interest |
|
| Equity |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance, December 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| ||||||||
|
|
|
|
|
|
|
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Acquisition of Business |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Sale of preferred stock for cash |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shareholder Contributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Common stock issued for exercise of options |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||||
Foreign currency translation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
| ( | ) | ||||
Distribution to non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of common stock and warrants for cash |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Sale of preferred stock for cash |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Preferred stock and common stock options issued for payment of contingent consideration |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Payment of note payable by NCI |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||||
Foreign currency translation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Distribution to non-controlling interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| ||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-5 |
| Table of Contents |
Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2025 and 2024
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
|
|
|
| ||
Equity method (income) loss |
|
| ( | ) |
|
|
| |
Depreciation expense |
|
|
|
|
|
| ||
Amortization of debt discounts and debt issuance costs |
|
|
|
|
|
| ||
Gain on sale of subsidiary |
|
|
|
|
| ( | ) | |
Change in fair value of contingent consideration |
|
| ( | ) |
|
| ( | ) |
Amortization of intangible assets |
|
|
|
|
|
| ||
Change in fair value of digital assets |
|
|
|
|
|
| ||
Earnings on digital assets |
|
| ( | ) |
|
|
| |
Change in fair value of derivative liabilities |
|
| ( | ) |
|
|
| |
Impairment of intangible assets |
|
|
|
|
|
| ||
Impairment of Investment |
|
|
|
|
|
| ||
Net change in: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
| ( | ) | |
Inventory |
|
|
|
|
|
| ||
Prepaids and other current assets |
|
| ( | ) |
|
|
| |
Accounts payable and other current liabilities |
|
|
|
|
|
| ||
Due to joint ventures |
|
|
|
|
|
| ||
Deferred revenue |
|
| ( | ) |
|
|
| |
Net cash used in operating activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Proceeds from sale of subsidiary |
|
|
|
|
|
| ||
Cash paid to acquire businesses |
|
|
|
|
| ( | ) | |
Investments in joint ventures |
|
|
|
|
| ( | ) | |
Proceeds from sale of digital assets |
|
|
|
|
|
| ||
Investments in digital assets |
|
| ( | ) |
|
| ( | ) |
Net cash provided by (used in) investing activities |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from exercise of common stock options |
|
|
|
|
|
| ||
Proceeds from sale of Series A preferred stock |
|
|
|
|
|
| ||
Proceeds from sale of common stock units |
|
|
|
|
|
| ||
Payments of preferred dividends |
|
| ( | ) |
|
| ( | ) |
Distributions to non-controlling interest holders |
|
| ( | ) |
|
| ( | ) |
Proceeds from notes payable |
|
|
|
|
|
| ||
Payments on note payables |
|
| ( | ) |
|
| ( | ) |
Proceeds from notes payable – related parties |
|
|
|
|
|
| ||
Proceeds from convertible notes payable |
|
|
|
|
|
| ||
Payments on note payables – related parties |
|
| ( | ) |
|
| ( | ) |
Payments on contingent consideration |
|
| ( | ) |
|
| ( | ) |
Net cash provided by financing activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Effect of foreign currency translation |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
Net Change in Cash |
|
|
|
|
| ( | ) | |
Cash, Beginning of Period |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Cash, End of Period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Cash Paid For: |
|
|
|
|
|
|
|
|
Income Taxes |
| $ |
|
| $ |
| ||
Interest |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Non-cash Transactions |
|
|
|
|
|
|
|
|
Dividends on preferred stock |
| $ |
|
| $ |
| ||
Non-controlling interest issued for acquisitions |
| $ |
|
| $ |
| ||
Non-controlling interest issued for settlement of note payable |
| $ |
|
| $ |
| ||
Settlement of contingent consideration |
| $ |
|
| $ |
| ||
Common stock options issued for acquisitions |
| $ |
|
| $ |
| ||
Contingent consideration issued for acquisitions |
| $ |
|
| $ |
| ||
Derivative liability established for conversion feature |
| $ |
|
| $ |
| ||
Preferred stock issued for acquisitions |
| $ |
|
| $ |
| ||
Notes payable issued for asset acquisitions |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements
| F-6 |
| Table of Contents |
ONFOLIO HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
NOTE 1 – NATURE OF BUSINESS AND ORGANIZATION
Onfolio Holdings, Inc. (“Company”) was incorporated on July 20, 2020 under the laws of Delaware to acquire and development high-growth and profitable internet businesses. The Company primarily earns revenue through website management, advertising and content placement on its online businesses, and product sales on certain sites. The Company owns multiple online businesses and manages online businesses on behalf of certain unconsolidated entities in which it holds equity interests. As described in “Note 4 –Segments Information”, we operate in two business segments: Business to Business (“B2B”) and Business to Consumer (“B2C).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The Company’s fiscal year end is December 31.
The consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries and other controlled entities. The Company’s wholly-owned subsidiaries are Onfolio LLC, Vital Reaction, LLC, Mighty Deals LLC, Onfolio Assets, LLC, Onfolio Management, LLC, WP Folio, LLC, Proofread Anywhere, LLC, Contentellect, LLC, SEO Butler Limited, Pace Generative LLC, and DealPipe, LLC. The Company also maintains majority ownership in DDS Rank, LLC, RevenueZen, LLC, and Eastern Standard which are owned
Foreign Currency Translation Gains (Losses)
The Company, and the majority of its subsidiaries, maintain their accounting records in U.S. Dollars. The Company’s operating subsidiary, SEO Butler, is located in the United Kingdom and maintains its accounting records in Great Britain Pounds, which is its functional currency. Assets and liabilities of the subsidiary are translated into U.S. dollars at exchange rates at the balance sheet date, equity accounts are translated at historical exchange rate and revenues and expenses are translated by using the average exchange rates for the period. Translation adjustments are reported as a separate component of other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss. Foreign currency denominated transactions are translated at exchange rates approximating those in effect at the transaction dates.
Investment in Unconsolidated Entities – Equity and Cost Method Investments
We account for our interests in entities in which we are able to exercise significant influence over operating and financial policies, generally
The current investment in unconsolidated affiliates accounted for under the equity method consists of a
Variable Interest Entities
Variable interest entities (“VIEs”) are consolidated when the investor is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE. Management concluded that the joint ventures do not qualify as variable interest entities under the requirements of ASC 810, as the joint ventures 1) have sufficient equity to finance its activities; 2) have equity owners that as a group have the characteristics of a controlling financial interest in the business, through the ability to vote on a majority basis to change the managing member of the respective joint ventures, and 3) are structured with substantive voting rights. The Company accounts for its investments in the joint ventures under either the cost or equity method based on the equity ownership in each entity.
The Company, through its subsidiary Onfolio Management LLC, is the manager of Onfolio Agency SPV, LLC (“OA SPV”), and Onfolio Agency SPV 2, LLC (“OA SPV 2”), collectively referred to as “OA SPVs”. The Company does not hold any equity interest in OA SPVs, but will receive
| F-7 |
| Table of Contents |
The Company, through its subsidiary RevenueZen, LLC, is the manager of CliAquire, LLC (“CliAquire”). The Company holds a
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. The Company uses significant judgements when making estimates related to the assessment of control over variable interest entities, valuation of deferred tax assets and impairment of long lived assets. Actual results could differ from those estimates.
Cash and Cash Equivalent
Cash and cash equivalents include cash on hand, demand deposits with banks and liquid investments with an original maturity of three months or less.
Inventories
Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first-in, first-out (FIFO) method.
Goodwill and Other Intangibles
The Company accounts for goodwill in a purchase business combination as the excess of the cost over the estimated fair value of net assets acquired. Business combinations can also result in the recognition of other intangible assets. Amortization of intangible assets, if applicable, occurs over their estimated useful lives. Goodwill, which is not amortized, is tested for impairment on an annual basis (or an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value). When testing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to perform a qualitative assessment and determines that an impairment is more likely than not, then performance of the quantitative impairment test is required. The quantitative assessment is performed to estimate the fair value of a reporting unit. To determine the reasonableness of the estimated fair values, the Company reviews the assumptions to determine that neither the income approach nor the market approach provides significantly different valuations. If the estimated fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the estimated fair value, a non-cash impairment loss is recognized in the amount of that excess.
When performing the quantitative assessment, key assumptions used in the income approach are updated when the analysis is performed for each reporting unit. The assumptions that have the most significant effect on the fair value calculations are the projected revenue growth rates, future operating margins, discount rates, and terminal values. While the Company uses reasonable and timely information to prepare its discounted cash flow analysis, actual future cash flows or market conditions could differ significantly and could result in future impairment charges related to recorded goodwill balances.
Recently acquired reporting units generally represent a higher inherent risk of impairment, which typically decreases as the businesses are integrated into the enterprise. Negative industry or economic trends, disruptions to its business, actual results significantly below expected results, unexpected significant changes or planned changes in the use of the assets, divestitures, and market capitalization declines may have a negative effect on the fair value of the Company’s reporting units.
| F-8 |
| Table of Contents |
Indefinite lived intangible assets are not amortized, but are separately tested for impairment during the fourth quarter of the fiscal year or on an interim basis if an event occurs that indicates the fair value is more likely than not below the carrying value. The Company first qualitatively assesses whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of an indefinite-lived trade name is less than its carrying amount. If necessary, the Company conducts a quantitative assessment using the relief-from-royalty method. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these assets. To the extent the Company determines a fair value, the inputs used represent a Level 3 fair value measurement in the FASB fair value hierarchy given that the inputs are unobservable. The assumptions that have the most significant effect on the fair value calculations are the royalty rates, projected revenue growth rates, discount rates, and terminal values. The royalty rate is determined based on the profitability of the trade name to which it relates and observed market royalty rates. Revenue growth rates are determined after considering current and future economic conditions, recent sales trends, or other variables.
The assessment of fair value for impairment purposes requires significant judgments to be made by management. Although forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in estimating future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results.
The Company evaluates whether there has been an impairment of identifiable intangible assets with definite useful economic lives, or of the remaining life of such assets, when certain indicators of impairment are present. In the event that facts and circumstances indicate that the cost or remaining period of amortization of any asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future gross, undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down to fair value or a revision in the remaining amortization period is required.
Long-lived Assets
The Company determines whether there has been an impairment of long-lived assets, excluding goodwill and other intangible assets, when certain indicators of impairment are present. In the event that facts and circumstances indicate that the cost or life of any long-lived asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future gross, undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down to fair value or a revision to the remaining useful life is required. Future adverse changes in market conditions or poor operating results of underlying long-lived assets could result in losses or an inability to recover the carrying value of the long-lived assets that may not be reflected in the assets’ current carrying value, thereby possibly requiring an impairment charge or acceleration of depreciation or amortization expense in the future.
Digital Assets
The Company’s digital assets include Bitcoin, the native cryptocurrency on the Bitcoin blockchain (“BTC”), Ether, the native cryptocurrency of the Ethereum blockchain (“ETH”), and Solana, the native cryptocurrency of the Solana blockchain (“SOL”), collectively the “Digital Assets”.
Cryptocurrency assets within the scope of ASC 350-60 Intangibles—Goodwill and Other—Crypto Assets(“ASC 350-60):
Our Digital Asset tokens have been determined to fall within the scope of ASC 350-60. The company reflects cryptocurrency assets held at fair value on the consolidated balance sheets within the Digital Assets line item. Changes in the fair value of cryptocurrency assets are recognized in income, reflected in the Change in fair value of digital assets category within the consolidated statement of operations.
In determining the fair value of digital assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”). The Company utilizes BitGo as the principal market and for pricing in determining the fair value of its digital asset holdings. The Company uses a first-in, first-out methodology to assign costs to digital assets. The fair value of digital assets are considered a level 1 fair value measurement.
Custodian Risk
The Company’s Digital Assets are held with a single third-party custodian, BitGo, which we selected based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.
| F-9 |
| Table of Contents |
Native Staking
The Company utilized one third-party asset manager to manage and stake ETH and SOL on its behalf as of December 31, 2025. Under these arrangements, the Company’s ETH and SOL is held by a qualified custodian and staked in the Ethereum and Solana protocol through a third-party validator operator (e.g., BitGo). The validator operator manages the staking process and delegates the Company’s ETH and SOL to network validators. When selected by the networks, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated.
ETH and SOL used in native staking is retained on the Company’s balance sheet as a crypto asset measured at fair value in accordance with ASC 350-60. The Company does not derecognize ETH and SOL when participating in native staking because it retains the ability to direct the use of the asset and obtain substantially all benefits.
The validator operator (e.g., BitGo) is not considered a customer under ASC606 as the service provided to BitGo does not represent an output as part of the entity’s ordinary operating strategy. As such the earnings are recorded as other income in the statement of operations.
Earnings from native staking is recognized at the end of each daily period, when the Company’s right to staking rewards becomes determinable (i.e., when the constraint is lifted). The amount recognized as earnings is measured at the fair value of rewards at contract inception for that day, net of validator commissions, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and ASC 820. Rewards represent noncash consideration and are measured using quoted prices in the principal market at contract inception. Subsequent changes in the fair value of ETH and SOL after initial recognition are recorded as unrealized gains or losses.
Revenue Recognition
The Company follows the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (the “new revenue standard”) to all contracts using the modified retrospective method.
Revenue is recognized based on the following five step model:
- | Identification of the contract with a customer |
- | Identification of the performance obligations in the contract |
- | Determination of the transaction price |
- | Allocation of the transaction price to the performance obligations in the contract |
- | Recognition of revenue when, or as, the Company satisfies a performance obligation |
The Company primarily earns revenue through website management, digital services, advertising and content placement on its online businesses, product sales, and digital product sales. Management services revenue is earned and recognized on a monthly basis as the services are provided. Advertising and content revenue is earned and recognized once the content is presented on the Company’s sites in accordance with the customer requirements. Product sales are recognized at the time the product is shipped to the customer. In certain circumstances, products are shipped directly by a supplier to the end customer at the Company’s request. The Company determined that it is the primary obligor in these contracts due to being responsible for fulfilling the customer contract, establishing pricing with the customer, and taking on credit risk from the customer. The Company recognizes revenue from these contracts with customers on a gross basis. Digital product sales represent electronic content that is transferred to the customer at time of purchase. The Company also earns revenue from online course subscriptions that may have monthly or annual subscriptions. In circumstances when a customer purchases an annual subscription upfront, the Company defers the revenue until the performance obligation has been satisfied.
The revenue from our Eastern Standard subsidiary is derived from website design and implementation contracts and typically span between 4 to 12 months. These contracts continuously transfer control to the customer as all of the work is completed electronically and is transferable to the customer at any point in time. Contract costs include labor, materials, and indirect costs.
| F-10 |
| Table of Contents |
We have numerous contracts that are in various stages of completion which require estimates to determine the forecasted costs at completion. Due to the nature of the work left to be performed on many of our contracts, the estimation of total cost at completion for fixed-price contracts is complex, subject to many variables and requires significant judgment. Estimates of total cost at completion are made each period and changes in these estimates are accounted for prospectively as cumulative adjustments to revenue recognized in the current period. If estimates of costs to complete fixed-price contracts indicate a loss, a provision is made through a contract write-down for the total loss anticipated.
Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
As of December 31, 2025, the Company has $
The following table presented disaggregated revenue information for the years ended December 31, 2025 and 2024:
|
| For the Year ended December 31, 2025 |
|
| For the Year ended December 31, 2024 |
| ||
Website management |
| $ |
|
| $ |
| ||
Advertising and content revenue |
|
|
|
|
|
| ||
Product sales |
|
|
|
|
|
| ||
Digital Product Sales |
|
|
|
|
|
| ||
Total revenue |
| $ |
|
| $ |
| ||
The Company does not have any single customer that accounted for greater than 10% of revenue during the years ended December 31, 2025 and 2024.
Cost of Revenue
Cost of product revenue consists primarily of costs associated with the acquisition and shipment of products being sold through the Company’s online marketplaces.
Cost of Service revenue which include website content creation costs including contract labor, domain and hosting costs and certain software costs related to website operations.
Net Income (Loss) Per Share
In accordance with ASC 260 “Earnings per Share,” basic net loss per common share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and common equivalent shares. As of December 31, 2025 the effect of
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.
| F-11 |
| Table of Contents |
Tax benefits of uncertain tax positions are recorded only where the position is “more likely than not” to be sustained based on their technical merits. The amount recognized is the amount that represents the largest amount of tax benefit that is greater than 50% likely of being ultimately realized. A liability is recognized for any benefit claimed or expected to be claimed, in a tax return in excess of the benefit recorded in the financial statements, along with any interest and penalty (if applicable) in such excess. The Company has no uncertain tax positions as of December 31, 2025 or 2024.
Derivative Financial Instruments
Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses a binomial model. Changes in fair value are recorded in the consolidated statements of operations.
Fair Value of Financial Instruments
The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and notes payable approximate fair value due to the relatively short period to maturity for these instruments.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.
The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
| Fair value at |
| ||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| December 31, 2025 |
| ||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cryptocurrency holdings |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total assets |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total liabilities |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The Company did not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis as of December 31, 2024.
Segment Reporting
The Company manages its operations under two segments for the purpose of assessing performance and making operating decisions – Business to Business (“B2B”) and Business to Consumer (“B2C)”. The Company’s Chief Operating Decision Maker (“CODM”) is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about combined net income from operations. All significant operating decisions are based upon an analysis of the Company as two operating segments, which are the same as its reporting segments.
| F-12 |
| Table of Contents |
Stock-Based Compensation
Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-Based Compensation” established financial accounting and reporting standards for stock-based compensation plans. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The valuation of employee stock options is an inherently subjective process, since market values are generally not available for long-term, non-transferable employee stock options. Accordingly, the Black-Scholes option pricing model is utilized to derive an estimated fair value. The Black-Scholes pricing model requires the consideration of the following five variables for purposes of estimating fair value:
Expected Dividends. We have never declared or paid any cash dividends on any of our capital stock and do not expect to do so in the foreseeable future. Accordingly, we use an expected dividend yield of zero to calculate the grant-date fair value of a stock option.
Expected Volatility. The expected volatility is a measure of the amount by which our stock price is expected to fluctuate during the expected term of options granted. We determine the expected volatility solely based upon the historical volatility of a peer group of companies of similar size and with similar operations.
Risk-Free Interest Rate. The risk-free interest rate is the implied yield available on U.S. Treasury zero-coupon issues with a remaining term equal to the option’s expected term on the grant date.
Expected Term. The expected life of stock options granted is determined using the simplified method based on the actual vesting date and the end of the contractual term.
Stock Option Exercise Price and Grant Date Price of Common Stock. Currently the Company utilizes the most recent cash sale price of its common stock as the most reasonable indication of fair value.
Advertising
The Company expenses advertising costs as they are incurred. Advertising costs were $
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company adopted this standard effective January 1, 2025, which did not have a material impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 amends ASC, Financial Instruments – Credit Losses (Topic 326) (“ASC Topic 326”) to simplify how entities measure credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC, Revenue from Contracts with Customers (Topic 606) (“ASC Topic 606”). This update allows entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating expected credit losses. ASU 2025-05 is effective for interim and annual periods beginning after December 15, 2025. Early adoption is permitted. The Company has not yet adopted ASU 2025-05 but does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
| F-13 |
| Table of Contents |
Reclassifications
Certain reclassifications have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.
NOTE 3 – GOING CONCERN
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2025, the Company had not yet achieved consistent profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity or debt financing and/or related party advances. However, there is no assurance of additional funding being available.
NOTE 4 – SEGMENT INFORMATION
The Company manages its operations under two segments for the purpose of assessing performance and making operating decisions – Business to Business (“B2B”) and Business to Consumer (“B2C)”. The Company’s Chief Operating Decision Maker (“CODM”) is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about combined net income from operations. All significant operating decisions are based upon an analysis of the Company as two operating segments, which are the same as its reporting segments.
We operate in two business segments: B2B and B2C. We organize our business segments based on the nature of products and services offered, and the economic characteristics of each segment. Following is a brief description of the activities of our business segments.
B2B
Our B2B segment includes the results of operations of Eastern Standard, RevenueZen, DDS Rank, SEO Butler, Contentellect, Pace Generative and DealPipe. These entities share similar characteristics such as customers being businesses and being primarily service-related businesses.
B2C
Our B2C segment includes the results of operations of Proofread Anywhere, Mighty Deals, and Vital Reaction. These entities share characteristics such as the end customers being individual consumers, and sales being more focused on product sales, including digital sales.
Selected Financial Data by Business Segment
Net sales and operating profit of the Company’s business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. Our executive management committee serves as our Chief Operating Decision Maker (CODM) and is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM evaluates each segment’s performance based on metrics such as net sales, operating profit, and other key financial indicators, guiding strategic decisions to align with company-wide goals. Business segment operating profit includes the Company’s share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of its business segments.
| F-14 |
| Table of Contents |
Summary Operating Results
Sales, cost of sales and operating profit for each of our business segments were as follows (in millions):
|
| For the Year Ended December 31, 2025 |
| |||||||||||||
|
| B2B |
|
| B2C |
|
| CORPORATE |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue, services |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Revenue, product sales |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue, services |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cost of revenue, product sales |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Impairment of goodwill and intangible assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from operations |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
|
| For the Year Ended December 31, 2024 |
| |||||||||||||
|
| B2B |
|
| B2C |
|
| CORPORATE |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue, services |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Revenue, product sales |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue, services |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cost of revenue, product sales |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisition costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Impairment of goodwill and intangible assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from operations |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||
| F-15 |
| Table of Contents |
Included within Selling, general and administrative is intangible asset amortization expense of $
Unallocated Items
Business segment operating profit excludes the other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, stock-based compensation expense, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Corporate” between operating profit from our business segments and our consolidated operating profit. See “Note 2 – Summary of Significant Accounting Policies” (under the caption “Use of Estimates”) for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments.
Assets
Total assets for each of our business segments were as follows:
|
| As of December 31, 2025 |
|
| As of December 31, 2024 |
| ||
B2B |
| $ |
|
| $ |
| ||
B2C |
|
|
|
|
|
| ||
Total business segment assets |
|
|
|
|
|
| ||
Corporate assets |
|
|
|
|
|
| ||
Total Assets |
| $ |
|
| $ |
| ||
Corporate assets primarily include cash and cash equivalents, and investments in unconsolidated joint ventures. During the years ended December 31, 2025 and 2024, the Company incurred no capital expenditures related to its segments.
NOTE 5 – BUSINESS ACQUISITIONS
DDS Rank
On June 6, 2024, SEO Marketing, Inc (dba DDS Rank) (“DDS Rank” or the “Acquired Business”) and DDS Rank LLC (“DDS Rank Delaware”), a subsidiary of the Company entered into and closed an asset purchase agreement (the “DDS Asset Purchase Agreement”), for the purchase by the Company of the Acquired Business.
Pursuant to the DDS Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, DDS Rank agreed to sell to the Company the Acquired Business, all as more fully described in the DDS Asset Purchase Agreement. The aggregate purchase price for the Acquired Business was $
The transaction closed on June 24, 2024, when consideration was transferred by the Company and control was obtained by the Company and was accounted for as a business combination under ASC 805.
| F-16 |
| Table of Contents |
The aggregate fair value of consideration for the DDS Rank acquisition was as follows:
Purchase Price: |
|
| ||
|
| Amount |
| |
Cash paid to seller |
|
|
| |
Notes payable issued to seller |
|
|
| |
Series A preferred stock issued to seller |
|
|
| |
Total purchase consideration |
| $ |
| |
The following information summarizes the allocation of the fair values assigned to the assets acquired at the acquisition date:
Purchase Price Allocation |
|
|
| |
Developed technology |
| $ |
| |
Customer relationships |
|
|
| |
Trademarks and Trade Names |
|
|
| |
Non-Compete agreement |
|
|
| |
Net assets acquired |
| $ |
| |
Eastern Standard
On September 20, 2024, Eastern Standard LLC (“Eastern Standard Delaware”), a Delaware limited liability company and majority owned subsidiary, entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Eastern Standard, LLC (“Eastern Standard Pennsylvania”), a Pennsylvania limited liability company, and its individual owners. Pursuant to the Asset Purchase Agreement, Eastern Standard Delaware will purchase from Eastern Standard Pennsylvania all of Eastern Standard Pennsylvania’s assets utilized in the operation of its business of providing digital marketing services, including integrated branding, and digital customer experiences (the “Acquired Business”).
Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Eastern Standard Pennsylvania agreed to sell to Eastern Standard Delaware the Acquired Business, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the Acquired Business is $
The transaction closed on October 18, 2024, when consideration was transferred by Onfolio and control was obtained by Onfolio and will be accounted for as a business combination under ASC 805.
The aggregate fair value of consideration for the Eastern Standard acquisition was as follows:
Purchase Price: |
|
|
| |
|
|
|
| |
Cash |
| $ |
| |
Promissory Note, net of discount |
|
|
| |
Preferred Shares |
|
|
| |
Roll-over equity |
|
|
| |
Total purchase consideration |
|
|
| |
The following information summarizes the allocation of the fair values assigned to the assets acquired at the acquisition date:
Purchase Price Allocation |
|
|
| |
Accounts receivable |
| $ |
| |
Unbilled receivables |
|
|
| |
Fixed assets |
|
|
| |
Website domains |
|
|
| |
Customer relationships |
|
|
| |
Trademarks and trade names |
|
|
| |
Non-compete agreement |
|
|
| |
Goodwill |
|
|
| |
Deferred revenues |
|
| ( | ) |
|
|
|
|
|
Net assets acquired |
| $ |
| |
| F-17 |
| Table of Contents |
Unaudited Pro Forma Financial Information
The following table sets forth the pro-forma consolidated results of operations for the year ended December 31, 2024 as if the Eastern Standard and DDS Rank acquisitions occurred on January 1, 2024. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.
|
| Year ended December 31, 2024 |
| |
Revenue |
| $ |
| |
Operating loss |
|
| ( | ) |
Net loss |
|
| ( | ) |
Net loss per common share |
| $ | ( | ) |
Weighted Average common shares outstanding |
|
|
| |
NOTE 6 – INVESTMENTS IN JOINT VENTURES
The Company holds various investments in certain joint ventures as described below.
Cost method investments
OnFolio JV I, LLC (“JV I”) was formed on October 11, 2019 under the laws of Delaware. OnFolio LLC is the managing member of JV I and has operational and financial decision making. The manager of JV 1 can be removed by a majority vote of the equity holders of JV I. On August 1, 2020, the Company received an investment of
OnFolio JV II, LLC (“JV II”) was formed on November 8, 2019 under the laws of Delaware. OnFolio LLC is the managing member of JV II and has operational and financial decision making. The manager of JV II can be removed by a majority vote of the equity holders of JV II. On August 1, 2020, the Company received an investment of approximately
| F-18 |
| Table of Contents |
Equity Method Investments
OnFolio JV IV, LLC (“JV IV”) was formed on January 3, 2020 under the laws of Delaware. The Company holds an equity interest of
The balance sheet of JV IV at December 31, 2025 included total assets of $
|
| For the Year ended December 31, 2025 |
|
| For the Year ended December 31, 2024 |
| ||
Revenue |
| $ |
|
| $ |
| ||
Net Income (loss) |
| $ | ( |
|
| $ | ( | ) |
The Company recognized equity method income (loss) of $
NOTE 7 – INTANGIBLE ASSETS
The following table represents the balances of intangible assets as of December 31, 2025 and 2024;
|
| Estimated life |
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Website Domains |
| Indefinite |
| $ |
|
| $ |
| ||
Website Domains |
|
|
|
|
|
|
| |||
Customer relationships |
|
|
|
|
|
|
| |||
Trademarks and Tradenames |
|
|
|
|
|
|
| |||
Non-compete agreements |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| ||
Accumulated Amortization - Website domains |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Customer Relationships |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Trademarks / Tradenames |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Non-Compete |
|
|
|
| ( | ) |
|
| ( | ) |
Net Intangible |
|
|
| $ |
|
| $ |
| ||
For the year ended December 31, 2025 and 2024, the Company recognized $
| F-19 |
| Table of Contents |
The following is an amortization analysis of the annual amortization of intangible assets on a fiscal year basis as of December 31, 2025:
For the year ended December 31, schedule of annual expected amortization expense |
| Amount |
| |
|
|
|
| |
2026 |
| $ |
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
Thereafter |
|
|
| |
Total remaining intangibles amortization |
| $ |
| |
During the year ended December 31, 2025, the Company recognized impairment losses of $
NOTE 8 - DIGITAL ASSETS
The Company holds BTC, ETH, and SOL (both in scope of ASC 350-60), The following presents a summary of the Company’s digital asset holdings as of December 31, 2025, and activity for the year ended December 31, 2025. For detailed accounting policies related to digital assets, refer to Note 2.
Crypto assets within the scope of ASC 350-60:
The following table presents the Company’s significant crypto assets holdings as of December 31, 2025:
|
| December 31, 2025 |
| |||||||||||||
|
| Quantity |
|
|
|
|
| |||||||||
|
| Free |
|
| Staked |
|
| Cost basis |
|
| Fair value |
| ||||
BTC |
|
| 5.32 |
|
|
| - |
|
| $ |
|
| $ |
| ||
ETH |
|
| 30.17 |
|
|
| 288.16 |
|
|
|
|
|
|
| ||
SOL |
|
| - |
|
|
| 6,786.17 |
|
|
|
|
|
|
| ||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total |
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
The following table presents a rollforward of the Company’s digital assets for the year ended December 31, 2025:
|
| Fair value |
| |
Fair value as of December 31, 2024 |
| $ |
| |
Additions1 |
|
|
| |
Receipt and accrual of tokens from native staking activities |
|
|
| |
Sale of digital assets for cash |
|
| ( | ) |
Change in fair value of tokens |
|
| ( | ) |
Fair value as of December 31, 2025 |
| $ |
| |
The Company’s staked token are held under native staking and are maintained in the original token balances. The staked token are not restricted and can be unstaked by the Company at any time.
The net loss on change in fair value of cryptocurrency of $
| F-20 |
| Table of Contents |
The Company’s BTC, ETH, and SOL digital assets serve as collateral against the convertible note payable as discussed in Note 11, and pursuant to the note agreement any transactions regarding these assets must also be approved by the note holder. As of December 31, 2025, the fair value of the restricted digital assets was $
NOTE 9 – STOCKHOLDERS’ DEFICIT
Preferred stock
The Company’s authorized preferred stock consists of
On February 28, 2025, the Company issued $
During the year ended December 31, 2025, the Company sold
During the year ended December 31, 2025 and 2024, the Company recognized $
As of December 31, 2025 and December 31, 2024, there were
Common stock
The Company’s authorized common stock consists of
On October 7, 2025 the Company’s initiated a private offering where by
Stock Options
On February 28, 2025, the Company issued
During the year ended December 31, 2025, the Company awarded an aggregate of
| F-21 |
| Table of Contents |
During the year ended December 31, 2025, the Company awarded
During the year ended December 31, 2025, the Company awarded
A summary of stock option information is as follows:
|
| Outstanding Awards |
|
| Weighted Average Grant Date Fair Value |
|
| Weighted Average Exercise price |
| |||
Outstanding at December 31, 2023 |
|
|
|
| $ |
|
| $ |
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Forfeited and cancelled |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Outstanding at December 31, 2024 |
|
|
|
|
|
|
|
|
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| - |
|
|
|
|
|
|
| ||
Expired |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Forfeited and cancelled |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Outstanding at December 31, 2025 |
|
|
|
| $ |
|
| $ |
| |||
Exercisable at December 31, 2025 |
|
|
|
| $ |
|
| $ |
| |||
The weighted average remaining contractual life is approximately
Common Stock Warrants
A summary of stock warrant information is as follows:
|
| Outstanding Awards |
|
| Weighted Average Grant Date Fair Value |
|
| Weighted Average Exercise price |
| |||
Outstanding at December 31, 2024 |
|
|
|
| $ |
|
| $ |
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| - |
|
|
|
|
|
|
| ||
Forfeited and cancelled |
|
| - |
|
|
|
|
|
|
| ||
Outstanding at December 31, 2025 |
|
|
|
| $ |
|
| $ |
| |||
Exercisable at December 31, 2025 |
|
|
|
| $ |
|
| $ |
| |||
On October 7, 2025, a dilutive issuance of securities occurred pursuant to the Company’s
| F-22 |
| Table of Contents |
The weighted average remaining contractual life is approximately 1.65 years for stock warrants outstanding with no intrinsic value of as of December 31, 2025.
NOTE 10 – RELATED PARTY TRANSACTIONS
From time to time, the Company pays expenses directly on behalf of the joint ventures that it manages and receives funds on behalf of the joint ventures. As of December 31, 2025 and December 31, 2024, the balances due from the joint ventures were $
From time to time, the Company’s CEO paid expenses on behalf of the Company, and the Company funded certain expenses to the CEO. Additionally, the Company received its investments in JV I, JV II and JV III from the CEO. As of December 31, 2025 and 2024, the Company was owed $
No member of management has benefited from the transactions with related parties. The above transactions were not arms-length transactions.
NOTE 11 – NOTES PAYABLE
Notes payable
During the year ended December 31, 2020, the Company acquired domain names from a third party and owed $97,323. The Company has repaid $80,000 of the balance and as of December 31, 2024 and 2025, the remaining balance owed is $17,323. The amount is unsecured with no maturity date and does not accrue interest.
On January 4, 2024, the Company entered into a promissory note as part of the acquisition of RevenueZen (the “RevenueZen Note”). The RevenueZen Note has
In January 2024, the Company entered into three separate promissory notes for aggregate principal of $
On April 1, 2024 the Company received proceeds of $
| F-23 |
| Table of Contents |
On June 6, 2024, the Company entered into a promissory note as part of the acquisition of DDS Rank (the “DDS Rank Note”). The DDS Rank Note has the principal sum of $
On October 1, 2024, the Company entered into a promissory Note as part of the acquisition of Eastern Standard (the “Eastern Standard Short-Term Note”). The Eastern Standard Short-Term Note has the principal sum of $
In addition, on October 1, 2024, the Company entered into a promissory note as part of the acquisition of Eastern Standard (the “Eastern Standard Note”). The Eastern Standard Note has the principal sum of $
On February 28, 2025, the Company issued a promissory note for $
On June 2, 2025, the Company received proceeds of $
| F-24 |
| Table of Contents |
At various times the Company enters into short-term financing agreements with payment service providers who provide cash proceeds. The Company will repay the principal balance based on a percentage of its daily sales processed through the service provider until the total principal is repaid, which ranges from 5% to 30%, based on the repayment terms in the agreement which is less than one year. The following table shows the outstanding balances of these lenders as of December 31, 2025:
Borrowing Entity |
| Origination Date |
| Interest rate |
|
| Original cash advanced |
|
| Balance as of December 31, 2025 |
|
| Balance as of December 31, 2024 |
| ||||
Proofread Anywhere |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Proofread Anywhere |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Proofread Anywhere |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Vital Reaction |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Vital Reaction |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Vital Reaction |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Contentellect |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Contentellect |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
DDS Rank |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
Onfolio Assets |
|
|
| % |
| $ |
|
| $ |
|
|
|
| |||||
Onfolio Assets |
|
|
| % |
|
|
|
| $ |
|
| $ |
| |||||
SEO Butler |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
SEO Butler |
|
|
| % |
| $ |
|
| $ |
|
| $ |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total balance as of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
Convertible Notes
On November 17, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the buyer referred to in the Schedule of Buyers included therein (the “Buyers”), pursuant to which the Company agreed to sell (i) an aggregate principal amount of $6,000,000 in Senior Secured Convertible Notes (the “Senior Secured Notes”), convertible into the Company’s common stock, par value $
The Securities Purchase Agreement contains representations and warranties of the Company and the Buyers typical for transactions of this type. In addition, the Securities Purchase Agreement contains customary covenants on the Company’s part typical for transactions of this type.
Senior Secured Convertible Notes
Pursuant to the Securities Purchase Agreement, the Company has issued Senior Secured Convertible Notes (the “Senior Secured Notes”) in the aggregate principal amount of $
| F-25 |
| Table of Contents |
Subject to the terms and conditions of the Securities Purchase Agreement, the Company may require each Buyer to participate in one or more additional closings for the purchase by such Buyer and the sale by the Company, of (a)with respect to the First Additional Closing (as defined below), additional Notes in the aggregate original principal amount of $
The Senior Secured Notes were issued on November 17, 2025, subject to the satisfaction of customary closing conditions. The Senior Secured Notes are senior obligations of the Company and are secured by all personal property and assets of the Company and its subsidiaries, pursuant to a Security Agreement and a Guaranty.
The Senior Secured Notes also contain certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, restrictions on redemption and cash dividends, restrictions on the transfer of assets and changes in the nature of business, as well as standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the Senior Secured Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the Securities Purchase Agreement), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company. As of December 31, 2025, the Company was in compliance with all covenants under the agreements.
As a result of the variable conversion rate, the Company determined that the conversion feature must be separated from the note and accounted for as a derivative liability under ASC 815. The fair value of the derivative on the date of issuance of $
Registration Rights Agreement
On November 17, 2025, the Company also entered into a registration rights agreement with the Buyers (the “Registration Rights Agreement”), which provides, subject to certain limitations, the Buyers with certain registration rights for the shares of Common Stock issuable upon conversion of the Senior Secured Notes. The Registration Rights Agreement requires the Company to prepare and file a registration statement with
For the year ended December 31, 2025, the Company recognized interest expense associated with the Convertible Notes of $
The following summarizes the Company’s maturities of debt instruments:
|
| Principal |
| |
Fiscal year ended: |
|
|
| |
December 31, 2026 |
| $ |
| |
December 31, 2027 |
|
|
| |
December 31, 2028 |
|
|
| |
December 31, 2029 |
|
|
| |
December 31, 2030 and thereafter |
|
|
| |
Total loan repayments |
|
|
| |
Less interest |
|
|
| |
Total |
| $ |
| |
| F-26 |
| Table of Contents |
NOTE 12 – DERIVATIVE LIABILITIES
The fair values of the conversion option of outstanding convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on convertible notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable. The fair value of the derivative liabilities was estimated using a Monte-Carlo model with the following assumptions:
|
| December 31, 2025 |
|
| November 17, 2025 |
| ||
Volatility |
|
| % |
|
| % | ||
Dividend Yield |
|
| % |
|
| % | ||
Risk-free rate |
|
| % |
|
| % | ||
Expected term |
|
|
|
| ||||
Stock price |
| $ |
|
| $ |
| ||
Conversion price |
| $ |
|
| $ |
| ||
Derivative liability fair value |
| $ |
|
| $ |
| ||
Number of shares issued upon conversion, exercise, or satisfaction of required conditions |
|
|
|
|
|
| ||
All fair value measurements related to the derivative liabilities are considered significant unobservable inputs (Level 3) under the fair value hierarchy of ASC 820.
The table below presents the change in the fair value of the derivative liability during the nine months ended December 31, 2025:
Fair value as of December 31, 2024 |
| $ |
| |
Establishment of derivative liability upon issuance of notes |
|
|
| |
Change in fair value of derivatives |
|
| ( | ) |
Fair value as of December 31, 2025 |
| $ |
|
The total impact of derivative liabilities recognized in the Company’s consolidated statements of operations includes the change in fair value of derivatives, with the Company recognizing a total gain of $
NOTE 13 – DEFERRED REVENUE
Deferred revenue as of December 31, 2025 and 2024 consisted of the following:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Website design and implementation |
| $ |
|
| $ |
| ||
Website management |
|
|
|
|
|
| ||
Advertising and content services |
|
|
|
|
|
| ||
Total deferred revenue |
| $ |
|
| $ |
| ||
Changes in the balance of deferred revenue for the periods presented are as follows:
|
| Deferred Revenue |
| |
Balance as of December 31, 2023 |
| $ |
| |
Billings for the period |
|
|
| |
Revenue recognized |
|
| ( | ) |
Balance as of December 31, 2024 |
|
|
| |
Billings for the period |
|
|
| |
Revenue recognized |
|
| ( | ) |
Balance as of December 31, 2025 |
|
|
| |
| F-27 |
| Table of Contents |
The transaction price from revenue transactions allocated to unsatisfied performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable contracts that will be invoiced and recognized as revenue in future periods (“backlog”). While deferred revenue is recorded on our balance sheet as a liability, backlog is not recorded in revenue, deferred revenue or elsewhere in our consolidated financial statements until we establish a contractual right to invoice, at which point it is recorded as revenue or deferred revenue as appropriate. As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $
We expect that the amount of backlog relative to the total value of our contracts will change from year to year due to several factors, including the amount invoiced early in the contract term, the timing and duration of customer agreements, varying invoicing cycles of agreements and changes in customer financial circumstances. Accordingly, we believe that fluctuations in backlog are not always a reliable indicator of future revenues, and we do not utilize backlog internally as a key management metric.
NOTE 14 – CONTRACTS IN PROCESS
The net unbilled accounts receivables (deferred revenues) position for contracts in process, related to the website design and implementation services, consisted of the following:
|
| December 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Costs on uncompleted contracts |
| $ |
|
| $ |
| ||
Estimated earnings |
|
|
|
|
|
| ||
Total costs and estimated profits on uncompleted contracts |
|
|
|
|
|
| ||
Add: unbilled amounts on completed contracts |
|
|
|
|
|
| ||
Less: Progress billings |
|
| ( | ) |
|
| ( | ) |
Unbilled accounts receivables (deferred revenues), net |
| $ | ( | ) |
| $ | ( | ) |
The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as follows:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Unbilled accounts receivable costs and estimated earnings in excess of billings on uncompleted contracts |
| $ |
|
| $ |
| ||
Deferred revenues - Billings in excess of costs and estimated earnings on uncompleted contracts |
|
| ( | ) |
|
| ( |
|
Unbilled accounts receivables (deferred revenues), net |
| $ | ( | ) |
| $ | ( |
|
NOTE 15 - INCOME TAXES
The Company is subject to United States federal income taxes at an approximate rate of
|
| Year Ended |
|
| Year Ended |
| ||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Current tax expense |
|
|
|
|
|
| ||
Federal |
| $ |
|
| $ |
| ||
State |
|
|
|
|
|
| ||
Foreign |
|
|
|
|
|
| ||
Deferred tax expense (benefit) |
|
|
|
|
|
| ||
Provision for income taxes, total |
| $ |
|
| $ |
| ||
| F-28 |
| Table of Contents |
The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:
|
| Year Ended |
|
|
|
| Year Ended |
|
|
| ||||||
|
| December 31, 2025 |
|
|
|
| December 31, 2024 |
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income tax benefit computed at the statutory rate |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Federal |
| $ | ( | ) |
|
| % |
| $ | ( | ) |
|
| % | ||
State |
|
| ( | ) |
|
| % |
|
|
|
|
|
| |||
Foreign |
|
|
|
|
| ( | )% |
|
| - |
|
|
|
| ||
Permanent differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of derivative |
|
| ( | ) |
|
| % |
|
|
|
|
|
|
| ||
Other |
|
|
|
|
| ( | )% |
|
|
|
|
| ( | )% | ||
Temporary differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization and impairment of intangible assets |
|
|
|
|
| ( | )% |
|
|
|
|
|
| |||
Other |
|
|
|
|
| ( | )% |
|
|
|
|
|
| |||
Net operating loss carryforwards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
|
|
|
| ( | )% |
|
|
|
|
| ( | )% | ||
State |
|
|
|
|
| ( | )% |
|
|
|
|
|
| |||
Foreign |
|
|
|
|
| - |
|
|
|
|
|
| - |
| ||
Penalties and interest |
|
|
|
|
| - |
|
|
|
|
|
| - |
| ||
Provision for income taxes, current |
| $ |
|
| ( | )% |
| $ |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary differences |
| $ |
|
|
|
|
|
| $ |
|
|
|
|
| ||
Deferred tax provision (benefit) |
| $ |
|
|
|
|
|
| $ |
|
|
|
|
| ||
The Company has the following operating loss carry forwards.
|
| As of |
|
| As of |
| ||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Net Operating loss carry forwards |
| $ |
|
| $ |
| ||
Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Deferred tax assets |
| $ |
|
| $ |
| ||
As of December 31, 2025, the Company had approximately $
| F-29 |
| Table of Contents |
NOTE 16 – COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Company may become a party to lawsuits involving various matters. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company believes the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows.
On October 3, 2022, the Company entered into an Asset Purchase Agreement (“Hoang Asset Purchase Agreement”) with Hoang Huu Thinh, an individual (“Hoang”) for the purchase of the BWPS business. Pursuant to the Hoang Asset Purchase Agreement,
On January 1, 2024, the Company entered into the RevenueZen Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, the Company agreed to pay additional earn-out payments that could be paid to RevenueZen pursuant to the earn-out formula described in the RevenueZen Asset Purchase Agreement.
The earn-out formula specifies for a period of one year, if the SDE of the RevenueZen business exceeds $
On February 28, 2025, the Company and the RevenueZen sellers agreed to the final earn-out amount to be $
On April 1, 2024, the Company closed on its acquisition of certain customers from First Page, and subject to the terms and conditions contained in the acquisition agreement, at the closing,
Right to Receive Common Stock
On November 17, 2025 in connection with the Securities Purchase Agreement described in Note 11, the Company issued to the Buyers the Rights to Receive Common Stock, exercisable for the Right Amount (as defined below) in shares of Common Stock. The Rights shall be exercisable between November 17, 2025, and May 17, 2033. “Right Amount” means the underlying value of this Right, which initially shall be zero and shall increase on each calendar day on or after November 17, 2025, through and including, May 17, 2033, by the Right Daily Incremental Amount (as defined in the Rights) and any accrued and unpaid late charges related thereto. As of December 31, 2025, the Company has accrued $
| F-30 |
| Table of Contents |
NOTE 17 – SUBSEQUENT EVENTS
On January 6, 2026, the Company received a written notification (the “Notice”) from the Listing Qualifications Staff of The NASDAQ Stock Market (“NASDAQ”) stating that the Company is not in compliance with NASDAQ Listing Rule 5550(a)(2)
As stated in the Notice, NASDAQ Listing Rules provide the Company a compliance period of 180 calendar days (i.e., until July 6, 2026) in which to regain compliance, and the Company will regain compliance if the closing bid price of its common stock is $
Subsequent to December 31, 2025, the Company failed to settle the Eastern Standard Note for common shares and failed to have an effective registration statement as specified in the convertible note agreement which cause the triggering of an event of default. As of March 31, 2026, the Holder has not exercised any default remedies under the agreement.
Subsequent to December 31, 2025, the Company, and its subsidiary MightyDeals entered into an asset purchase agreement whereby it agreed to sell the underlying assets for a purchase price of $
| F-31 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ONFOLIO HOLDINGS INC.
Registrant
By: | /s/ Dominic Wells |
|
| Dominic Wells, |
|
| Chief Executive Officer |
|
| (Principal Executive Officer) |
|
Date: March 31, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
| Title |
| Date |
|
|
|
|
|
/s/ Dominic Wells |
| Chief Executive Officer, Principal Executive Officer, Chair of the Board of Directors |
| March 31, 2026 |
Dominic Wells |
|
|
| |
|
|
|
|
|
/s/ Adam Trainor |
| Interim Chief Financial Officer, Chief Operations Officer, Principal Financial and Accounting Officer |
| March 31, 2026 |
Adam Trainor |
|
|
| |
|
|
|
|
|
/s/ Andrew Lawrence |
| Director |
| March 31, 2026 |
Andrew Lawrence |
|
|
|
|
|
|
|
|
|
/s/ David McKeegan |
| Director |
| March 31, 2026 |
David McKeegan |
|
|
|
|
|
|
|
|
|
/s/ Robert J. Lipstein |
| Director |
| March 31, 2026 |
Robert J. Lipstein |
|
|
|
|
|
|
|
|
|
/s/ Mark N. Schwartz |
| Director |
| March 31, 2026 |
Mark N. Schwartz |
|
|
|
|
79 |
EXHIBIT 4.6
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Authorized and Outstanding Capital Stock
The following description of our Company’s capital stock and provisions of our amended and restated certificate of incorporation (“certificate of incorporation”) and our amended and restated bylaws (“bylaws”) are summaries and are qualified by reference to our Company’s certificate of incorporation and bylaws.
The total number of shares of all classes of capital stock that our Company is authorized to issue is 55,000,000 shares, consisting of (i) 50,000,000 shares of common stock, par value $0.001 per share (the “common stock”), and (ii) 5,000,000 shares of preferred stock, par value $0.001 per share (the “preferred stock”), of which 1,000,000 shares of preferred stock have been designated by our Board of Directors (“Board”) as series A preferred stock (the “series A preferred stock”).
As of March 31, 2026, our Company had outstanding 5,863,214, shares of common stock and 169,460 shares of series A preferred stock.
Common Stock
The holders of our Company’s common stock are entitled to one vote per share. In addition, the holders of our Company’s common stock will be entitled to receive dividends ratably, if any, declared by our Company’s Board out of legally available funds; however, the current policy of the Board is to use all available funds and any future earnings for use in financing the growth of our business and to meet our series A preferred stock dividend obligations. We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Pursuant to that Certain Securities Purchase Agreement (defined below) we entered into, so long as any Senior Secured Notes (defined below) are outstanding, our Company may not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company, other than our series A preferred stock, without the prior express written consent of such noteholders.
Upon liquidation, dissolution or winding-up, the holders of our Company’s common stock are entitled to share ratably in all assets that are legally available for distribution. The holders of our Company’s common stock have no pre-emptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our Company’s common stock are subject to, and may be adversely affected by, the rights of the holders of the series A preferred stock and senior secured notes, in addition to any other series of preferred stock or notes which may be designated solely by action of the Board and issued in the future.
IPO Warrants
The following summary of certain terms and provisions of the warrants we issued as part of our initial public offering. This summary is not complete and is subject to and qualified in its entirety by the provisions of the warrant agency agreement, which is filed as an exhibit to our annual report on Form 10-K for the fiscal year ended December 31, 2024. You should carefully review the terms and provisions set forth in the warrant agency agreement, including the annexes thereto, and the form of warrant.
Outstanding. As of December 31, 2025, we have outstanding warrants to purchase 6,117,250 shares of common stock.
Exercisability. The warrants are exercisable at any time after August 30, 2022, and at any time up to the date that is five (5) years after August 30, 2022. The warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares purchased upon such exercise (except in the case of a cashless exercise as discussed below).
Exercise Limitation. A holder does not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.
Exercise Price. The exercise price per share of common stock purchasable upon exercise of the warrants is $2.50 per share. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders. The warrant exercise price is also subject to downward adjustment in the event we issue shares of common stock in a capital raising transaction at a price below the exercise price, subject to a minimum exercise price of $2.50.
| 1 |
Cashless Exercise. If, at any time during the term of the warrants, the issuance of shares of common stock upon exercise of the warrants is not covered by an effective registration statement, the holder is permitted to effect a cashless exercise of the warrants (in whole or in part) by having the holder deliver to us a duly executed exercise notice, canceling a portion of the warrant in payment of the purchase price payable in respect of the number of shares of common stock purchased upon such exercise.
Rights as a Stockholder. Except as otherwise provided for in the warrants or by virtue of such holder’s ownership of shares of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the warrant.
Warrant Agent; Global Certificate. The Warrants are issued in registered form under the warrant agency agreement between the warrant agent and our Company. The warrants shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC. Our transfer agent, VStock Transfer LLC will serve as the warrant agent.
Governing Law. The warrants and the warrant agency agreement are governed by Delaware law.
Placement Agent Warrants
In addition, as additional compensation for EF Hutton’s services, we agreed to issue warrants to EF Hutton or its designees to purchase 82,613 shares of our common stock at $5.50. The underwriters’ warrants may be exercised in whole or in part, commencing on a date which is six months from August 25, 2022 until August 25, 2027. The underwriters’ warrants provide for one-time demand registration rights and unlimited “piggyback” registration rights for the shares of our common stock exercisable thereunder as well as customary anti-dilution provisions (for stock dividends and splits and recapitalizations) and anti-dilution protection (adjustment in the number and price of such warrants and the shares underlying such warrants) resulting from corporate events (which would include dividends, reorganizations, mergers, etc.) and future issuance of common stock or common stock equivalents at prices (or with exercise and/or conversion prices) below the offering price as permitted under FINRA Rule 5110(g)(8)(E). The demand registration rights and piggyback registration rights will terminate on the fifth anniversary and seventh anniversary of the commencement of sales of the offering, respectively, in compliance with FINRA Rules 5110(g)(8)(C) and (D).
Private Placement Warrants
In connection with a private placement of units we conducted in October 2025, we issued 735,819 warrants with an exercise price of $2.50. The warrants are exercisable in whole or in part, at any time, beginning on October 23, 2025 and expiring on August 30, 2027. The warrants contain customary anti-dilution provisions (for stock dividends and splits and recapitalizations).
Series A Preferred Stock
Our series A preferred stock is senior in rank to shares of common stock with respect to dividends, liquidation and dissolution. Each share of Series A preferred stock carries an annual 12% cumulative, non-compounding dividend based on the cash amount invested into the Series A preferred stock, payable quarterly. Dividends on Series A preferred stock will be paid prior to any dividends on any other class of shares, including common stock. In the event of any liquidation, dissolution or winding up of our Company, the proceeds shall be paid as follows: (i) first, pay the purchase price plus accrued dividends, on each share of Series A preferred stock; and (ii) next, the balance of any proceeds shall be distributed pro rata to holders of common stock or other junior securities. The Series A preferred stock shall be redeemable at the option of our Company commencing any time after January 1, 2026 at a price equal to the purchase price ($25.00 per share) plus accrued dividends, on each share of Series A preferred stock.
| 2 |
Except as otherwise required by law, the Series A preferred stock have no voting rights other than with respect to the following where the Series A preferred stock will vote as a separate class: (a) the creation or authorization of any securities of the Company that ranks superior to or in parity with the Series A preferred stock in rights, preferences, or privileges, (b) the amending, altering, modifying, or repealing the sections of the certificate of incorporation relating to the Series A preferred stock, (c) redeeming, purchasing, or otherwise acquiring or paying or declaring any dividend or other distribution on (or pay into or set aside for a sinking fund for any such purpose) any capital stock of the Company; provided, that this restriction shall not apply to (i) the redemption or repurchase of or the payment of dividends on Shares of Series A preferred stock, (ii) the declaration or payment of any dividend or distribution payable on the common stock in shares of common stock, or (iii) the repurchase of junior securities held by employees or consultants of the Company upon termination of their employment or services pursuant to agreements providing for such repurchase; (d) enter into, or become subject to, any agreement or instrument or other obligation which by its terms restricts the Company’s ability to perform its obligations relating to the sections of the certificate of incorporation relating to the Series A preferred stock, including the ability of the Company to pay dividends or make any redemption or other liquidation payment required hereunder; or (e) agree or commit to do any of the foregoing.
On or before 180 days following the sale of at least 600,000 shares of the Series A preferred stock, our Company shall register the Series A preferred stock by preparing and filing one registration statement, or if necessary more than one registration statement, of our Company in compliance with the Securities Act of 1933, as amended (“Securities Act”) or the Securities Exchange Act of 1934, as amended and thereafter apply to list the Series A preferred stock on a U.S. stock exchange or develop a public trading market for the Series A preferred stock by soliciting securities brokers to become market makers of the series A preferred on an established over the counter trading market, such as the OTC Markets. Our series A preferred stock became quoted and began trading on the OTCQB on October 30, 2024 under the symbol “ONFOP.”
2020 Equity Incentive Plan
On July 23, 2020, we adopted the Onfolio Holdings Inc. 2020 Equity Incentive Plan, as amended, (the “2020 Plan”), which was approved by both our Board and our stockholders. Under the 2020 Plan, our Company may grant awards to our employees, consultants and directors and such other individuals who are reasonably expected to become employees, consultants and directors. Awards that may be granted under the 2020 Plan include: incentive stock options, non- qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, and other equity-based awards. The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Plan is 2,600,000 shares, except at any given time, the number of shares that may be issued pursuant to the 2020 Plan cannot exceed the number of shares that is equal to 20% of our Company’s total shares of common stock outstanding at the time of any grant of awards under the 2020 Plan.
As of December 31, 2025, the Company awarded a total of 861,860 options with a weighted average exercise price of $0.97 per share, and 385,034 shares of common stock are issuable upon the exercise of outstanding stock options.
| 3 |
Convertible Notes
On November 17, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the buyer referred to in the Schedule of Buyers included therein (the “Buyers”), pursuant to which the Company agreed to sell (i) an aggregate principal amount of $6,000,000 in Senior Secured Convertible Notes (the “Senior Secured Notes”), convertible into the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) rights to receive Common Stock (the “Rights”) (see Note 16).
The Securities Purchase Agreement contains representations and warranties of the Company and the Buyers typical for transactions of this type. In addition, the Securities Purchase Agreement contains customary covenants on the Company’s part typical for transactions of this type.
Senior Secured Convertible Notes
Pursuant to the Securities Purchase Agreement, the Company has issued Senior Secured Convertible Notes (the “Senior Secured Notes”) in the aggregate principal amount of $6,000,000, maturing on November 17, 2027, which are convertible into shares of Common Stock at a conversion price of $0.984. At any time the Buyer may, at the Buyers’s option, convert all, or any part of the note at the lower of (i) the applicable Conversion Price as in effect on the applicable Conversion Date and (ii) the greater of (x) the Floor Price and (y) (i) 92% of the lowest VWAP of the Common Stock of any Trading Day during the ten (10) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice or (ii) during the occurrence and continuance of an Event of Default, 85% of the lowest VWAP of the Common Stock of any Trading Day during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice. The initial Floor Price means $0.22 (as adjusted for share splits, share dividends, share combinations, recapitalizations and similar events) provided that if on the six month anniversary of the Issuance Date the Floor Price shall be adjusted to the lower of (i) the Floor Price then in effect and (ii) 20% of the lower of (x) the closing price of the Ordinary Shares of the Principal Market (as reported by the Principal Market) as of the Trading Day ended immediately prior to such applicable Six Month Anniversary Date and (y) the quotient of (I) the sum of each the closing price of the Ordinary Shares of the Principal Market (as reported by the Principal Market) on each Trading Day of the five (5) Trading Day period ended on, and including, the Trading Day ended immediately prior to such applicable Six Month Anniversary Date, divided by (II) five.
Subject to the terms and conditions of the Securities Purchase Agreement, the Company may require each Buyer to participate in one or more additional closings for the purchase by such Buyer and the sale by the Company, of (a) with respect to the First Additional Closing (as defined below), additional Notes in the aggregate original principal amount of $2,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (such closing of the purchase of such Senior Secured Notes, the “First Additional Closing”), and (b) with respect to any Subsequent Additional Closing (as defined below), Senior Secured Notes with an aggregate original principal amount for all Subsequent Additional Closings not to exceed $292,000,000, or such other amount as the Company and each Buyer shall mutually agree in writing (each such closing of the purchase of such Senior Secured Notes, a “Subsequent Additional Closing”).
The Senior Secured Notes were issued on November 17, 2025, subject to the satisfaction of customary closing conditions. The Senior Secured Notes are senior obligations of the Company and are secured by all personal property and assets of the Company and its subsidiaries, pursuant to a Security Agreement and a Guaranty.
| 4 |
The Senior Secured Notes also contain certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, restrictions on redemption and cash dividends, restrictions on the transfer of assets and changes in the nature of business, as well as standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the Senior Secured Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the Securities Purchase Agreement), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgments against the Company. As of December 31, 2025, the Company was in compliance with all covenants under the agreements.
As a result of the variable conversion rate, the Company determined that the conversion feature must be separated from the note and accounted for as a derivative liability under ASC 815. The fair value of the derivative on the date of issuance of $4,546,912 was recorded as a debt discount. See further discussion under “Note 12. Derivative Liabilities.” The aggregate debt discount of $5,776,912 is being amortized to interest expense over the respective term of the note. As of December 31, 2025, the Company had a remaining unamortized discount of $5,723,727.
Right to Receive Common Stock
On November 17, 2025 in connection with the Securities Purchase Agreement, the Company issued to the Buyers the Rights to Receive Common Stock, exercisable for the Right Amount (as defined below) in shares of Common Stock. The Rights shall be exercisable between November 17, 2025, and May 17, 2033. “Right Amount” means the underlying value of this Right, which initially shall be zero and shall increase on each calendar day on or after November 17, 2025, through and including, May 17, 2033, by the Right Daily Incremental Amount (as defined in the Rights) and any accrued and unpaid late charges related thereto. As of December 31, 2025, the Company has accrued $5,739 for the Right Amount.
Security and Pledge Agreement
Additionally, on November 17, 2025, the Company entered into a Security and Pledge Agreement (the “Security Agreement”) by and among the Company and each of the direct and indirect Domestic Subsidiaries (as defined in the Security Agreement) of the Company (the “Guarantors”), and the lead Buyer, in its capacity as collateral agent, pursuant to which the Company granted to the lead Buyer, for the ratable benefit of the lead Buyer and the other Buyers, a valid, perfected and enforceable security interest in all personal property and assets of the Company and its subsidiaries, which assets include substantially all of the assets of the Company’s in certain of the Company’s subsidiaries.
Guaranty
On November 17, 2025, all of the Guarantors entered into a subsidiary guaranty (the “Guaranty”), pursuant to which the Guarantors agreed to guaranty the Company’s obligations under the Purchase Agreement, the Notes, and other Transaction Documents.
Registration Rights Agreement
On November 17, 2025, the Company also entered into a registration rights agreement with the Buyers (the “Registration Rights Agreement”), which provides, subject to certain limitations, the Buyers with certain registration rights for the shares of Common Stock issuable upon conversion of the Senior Secured Notes. The Registration Rights Agreement requires the Company to prepare and file a registration statement with the U.S. Securities and Exchange Commission within 30 days after the issuance of the Senior Secured Notes to register the resale of the shares underlying the Senior Secured Notes and cause such registration statement to be declared effective within 60 days after the issuance of the Senior Secured Notes. In the event that the Company fails to file the registration statement by the prescribed deadline or such registration statement is not declared effective by the prescribed deadline or the Company fails to maintain the effectiveness of such registration statement, then the Company shall pay to each holder of registrable securities relating to such registration statement an amount in cash equal to two percent (2.0%) of such investor’s original principal amount stated in such investor’s Senior Secured Notes.
| 5 |
For the year ended December 31, 2025, the Company recognized interest expense associated with the Convertible Notes of $40,000. As of December 31, 2025, the Company had accrued interest associated with the Convertible notes of $0.
Anti-Takeover Provisions
Certain of our charter and statutory provisions could make the removal of our management and directors more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant common stock beneficially owned by our executive officers, and certain members of our Board, could lower the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
Certificate of Incorporation and Bylaws
Provisions of our certificate of incorporation and bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, subject to the rights of holders of any series of preferred stock, our certificate of incorporation and bylaws:
|
| · | empower our Board to fix the number of directors of our Company solely by resolution; |
|
| · | do not allow for cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; |
|
| · | empower our Board to fill any vacancy on our Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; |
|
| · | provide that special meetings of our stockholders may only be called by the Board or the chair of the Board (except that stockholders may also call special meetings of our stockholders so long as such stockholders beneficially owns at least 25% of the voting power of the outstanding shares of our stock); |
|
| · | establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders; |
|
| · | provide our Board the ability to authorize undesignated preferred stock. This ability makes it possible for our Board directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us; |
|
| · | provide that any director or the entire Board may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 66 2/3% in voting power of the stock of the Company entitled to vote thereon; |
|
| · | provide that our Board is expressly authorized to adopt, amend or repeal our bylaws; and |
|
| · | provide that our directors will be elected by a plurality of the votes cast in the election of directors. |
Delaware Law
Section 203 of the Delaware General Corporation Law (“DGCL”) is applicable to takeovers of certain Delaware corporations, including us. Subject to exceptions enumerated in Section 203, Section 203 provides that a corporation shall not engage in any business combination with any “interested stockholder” for a three-year period following the date that the stockholder becomes an interested stockholder unless:
|
| · | prior to that date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
|
| · | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, though some shares may be excluded from the calculation; or |
|
| · | on or subsequent to that date, the business combination is approved by the board of directors of the corporation and by the affirmative votes of holders of at least two- thirds of the outstanding voting stock that is not owned by the interested stockholder. |
Except as specified in Section 203, an interested stockholder is generally defined to include any person who, together with any affiliates or associates of that person, beneficially owns, directly or indirectly, 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation, any time within three years immediately prior to the relevant date. Under certain circumstances, Section 203 makes it more difficult for an interested stockholder to effect various business combinations with a corporation for a three-year period, although the stockholders may elect not to be governed by this section, by adopting an amendment to the certificate of incorporation or bylaws, effective 12 months after adoption. Our certificate of incorporation and bylaws do not opt out from the restrictions imposed under Section 203. We anticipate that the provisions of Section 203 may encourage companies interested in acquiring us to negotiate in advance with the board because the stockholder approval requirement would be avoided if a majority of the directors then in office excluding an interested stockholder approve either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder. These provisions may have the effect of deterring hostile takeovers or delaying changes in control, which could depress the market price of our common stock and deprive stockholders of opportunities to realize a premium on shares of common stock held by them.
| 6 |
Contractual Provisions
Our award agreements related to our 2020 Plan may include change-in-control provisions that allow us to grant options or other awards pursuant to our 2020 Plan that may become vested immediately upon a change in control. The terms of change of control provisions contained in certain of our senior executive employee agreements may also discourage a change in control of our Company.
Our Board also has the power to adopt a stockholder rights plan that could delay or prevent a change in control of our Company even if the change in control is generally beneficial to our stockholders. These plans, sometimes called “poison pills”, are oftentimes criticized by institutional investors or their advisors and could affect our rating by such investors or advisors. If our Board adopts such a plan, it might have the effect of reducing the price that new investors are willing to pay for shares of our common stock.
Exclusive Forum Provision
Our certificate of incorporation and bylaws provide that unless our Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for:
|
| · | any derivative action or proceeding brought on behalf of the Company; |
|
| · | any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; |
|
| · | any action arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws (as either may be amended from time to time); or |
|
| · | any action asserting a claim governed by the internal affairs doctrine. |
Unless our Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of our Company shall be deemed to have notice of and consented to the provisions of our certificate of incorporation.
Further, if any action the subject matter of which is within the scope of the section immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce section immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
The enforceability of similar choice of forum provisions in other companies’ bylaws and certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our certificate of incorporation and bylaws to be inapplicable or unenforceable in such action.
These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act, Securities Act or any other claim for which the federal courts have exclusive or concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions. Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
Together, these charter, statutory and contractual provisions could make the removal of our management and directors more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant common stock beneficially owned by our founder, executive officers, members of our Board, and others could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
| 7 |
Listing/Quotation
Our common stock and IPO warrants are listed and traded under the symbols “ONFO” and “ONFOW,” respectively, on the Nasdaq Capital Market. Our series A preferred stock is quoted on the OTCQB under the symbol “ONFOP.”
Transfer Agent and Warrant Agent
The Company’s transfer agent and warrant Agent is VStock Transfer LLC with an address of 18 Lafayette Place, Woodmere, New York, NY 11598.
Indemnification of Directors and Officers
Each of our certificate of incorporation and our bylaws provide for indemnification of our directors and officers. Our certificate of incorporation and bylaws provide that we must indemnify our directors and officers to the fullest extent permitted by the DGCL and must indemnify against all expenses, liability, and loss incurred in investigating, defending or participating in such proceedings. We have also entered into separate indemnification agreements with our directors and officers.
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
Insofar as indemnification for liabilities under the Securities Act may be permitted to officers, directors or persons controlling our Company pursuant to the foregoing provisions, our Company has been informed that is it is the opinion of the Securities and Exchange Commission that such indemnification is against public policy as expressed in such Securities Act and is, therefore, unenforceable.
| 8 |
EXHIBIT 10.10
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY 2025
Compensation for our directors is discretionary and is reviewed from time to time by our Board of Directors. Any determinations with respect to Board compensation are made by our Board of Directors. During Fiscal year 2025, each of our independent directors who serve on our Board received 30,000 stock options and a quarterly stipend of $5,000 payable in cash. Additionally, the chair of our (i) audit committee receives an additional quarterly stipend of $2,500 payable in cash; and (ii) compensation committee receives an additional quarterly stipend of $1,250 payable in cash. All directors are also entitled to reimbursement for travel expenses for attending director meetings.
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
| Parent Company | Onfolio Holdings Inc | Delaware |
| Subsidiaries | Onfolio LLC | Delaware |
|
| Vital Reaction LLC | Delaware |
|
| Onfolio Assets, LLC | Delaware |
| SEO Butler Limited | England/Whales | |
|
| Proofreadanywhere LLC | Delaware |
|
| Contentellect LLC | Delaware |
|
| WP Folio LLC | Delaware |
|
| RevenueZen, LLC | Delaware |
| DDS Rank, LLC | Delaware | |
|
| Eastern Standard, LLC | Delaware |
|
| Onfolio Management, LLC | Delaware |
|
| DealPipe, LLC | Delaware |
|
| Pace Generative LLC | Delaware |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of
Onfolio Holdings Inc.
We hereby consent to the incorporation by reference in the registration statements of Onfolio Holdings Inc. on: (i) Form S-1 (No. 333-289787) and (ii) Form S-8 (No. 333-276735), of our report dated March 31, 2026, relating to the financial statements of Onfolio Holdings Inc.
Tampa, FL
March 31, 2026
EXHIBIT 31.1
CERTIFICATION
I, Dominic Wells, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Onfolio Holdings Inc.; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
|
|
|
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
|
|
|
|
|
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: March 31, 2026 |
|
|
|
|
| /s/ Dominic Wells |
|
| Dominic Wells |
|
| Chief Executive Officer (Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION
I, Adam Trainor, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Onfolio Holdings Inc.; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
|
|
|
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
|
|
|
|
|
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: March 31, 2026 |
|
|
|
|
| /s/ Adam Trainor |
|
| Adam Trainor |
|
| Interim Chief Financial Officer (Principal Financial and Accounting Officer) |
|
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Dominic Wells, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Onfolio Holdings Inc. on Form 10-K for the year ended December 31, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Onfolio Holdings Inc.
| /s/ Dominic Wells |
|
| Dominic Wells |
|
| Chief Executive Officer (Principal Executive Officer) |
|
| Date: March 31, 2026 |
|
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Adam Trainor, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Onfolio Holdings Inc. on Form 10-K for the year ended December 31, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Onfolio Holdings Inc.
| /s/ Adam Tainor |
|
| Adam Trainor |
|
| Interim Chief Financial Officer (Principal Financial and Accounting Officer) |
|
| Date: March 31, 2026 |
|