Onfolio Holdings, Inc. (ONFO) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Onfolio Holdings, Inc. is a Delaware corporation that acquires and manages online businesses, operating in two segments: Business-to-Business (B2B) and Business-to-Consumer (B2C). The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company. As of August 19, 2026, there were 2,452,712 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Revenue | $1,497,555 | $3,148,209 | $3,364,420 | $5,960,152 |
| Gross Profit | $732,003 | $1,938,277 | $1,650,138 | $3,645,397 |
| Net Loss (GAAP) | $(4,602,551) | $(534,439) | $(7,175,162) | $(1,340,867) |
| Net Loss to Common Shareholders | $(4,666,790) | $(665,534) | $(7,314,969) | $(1,563,842) |
| EPS (Basic & Diluted) | $(35.57) | $(6.49) | $(58.86) | $(15.25) |
| Cash and Equivalents | $250,733 | $2,175,223 (Dec 31, 2025) | $250,733 | $476,874 (Dec 31, 2024) |
| Total Liabilities | $9,607,257 | $7,455,689 (Dec 31, 2025) | $9,607,257 | $7,455,689 (Dec 31, 2025) |
| Stockholders' Equity (Deficit) | $(1,815,140) | $3,905,169 (Dec 31, 2025) | $(1,815,140) | $3,905,169 (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 52% in Q2 2026 compared to Q2 2025, driven by a slowdown at the Eastern Standard subsidiary, reduced digital product sales at Proofread Anywhere, and the divestiture of certain businesses.
- Significant Non-Cash Losses: The net loss was heavily impacted by non-cash items, including a $2.95 million loss on the change in fair value of derivative liabilities and a $281,000 loss on the change in fair value of digital assets (cryptocurrency).
- Liquidity Deterioration: Cash on hand dropped from $2.18 million at year-end 2025 to $250,733 at June 30, 2026. Net cash used in operating activities was $1.45 million for the six months ended June 30, 2026.
- Debt and Derivatives: The company holds $6.0 million in Senior Secured Convertible Notes. Due to events of default (failure to settle notes and registration delays), the conversion price was adjusted, and a derivative liability of $5.63 million was recorded.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: Management and auditors have expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows. The company requires additional financing to meet obligations.
- Nasdaq Compliance: The company received notices of non-compliance with Nasdaq minimum stockholders' equity ($2.5M) and minimum bid price ($1.00) requirements. A 1-for-50 reverse stock split was effected on August 10, 2026, to address the bid price deficiency.
- Debt Resolution (Subsequent Event): Subsequent to June 30, 2026, the company settled the remaining balance of its Senior Secured Convertible Notes, including liquidated damages and floor penalties, through the issuance of common stock. No principal remained outstanding as of the report date.
- Equity Purchase Facility: On April 10, 2026, the company entered an agreement to sell up to $100 million of common stock to an institutional investor to fund acquisitions and working capital. No sales had been made as of June 30, 2026.
- Internal Controls: The company identified a material weakness in internal controls over financial reporting due to a lack of segregation of duties and ineffective controls over revenue recognition.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $250,733 cash balance against upcoming debt service and operating expenses given the "substantial doubt" going concern opinion.
- Debt Settlement Terms: Review the specific terms of the post-period debt settlement (Note 15) to understand the extent of equity dilution resulting from the conversion of the $6M notes and associated penalties.
- Nasdaq Status: Confirm the current status of the Nasdaq compliance plan regarding stockholders' equity and the effectiveness of the reverse stock split in maintaining the $1.00 bid price.
- Derivative Liability: Assess the impact of the $5.63 million derivative liability on future earnings and the conditions required to eliminate it.
- Revenue Sustainability: Evaluate the sustainability of revenue streams following the divestiture of assets and the slowdown in the Eastern Standard subsidiary.