Onfolio (ONFO) - 2025 Q4 - Annual Report

Financial Performance - In 2025, the company reported a revenue increase of 36.5% compared to 2024, while the cost of revenue increased by 29.6%, resulting in a gross margin expansion of 2.1%[311]. - The operating loss increased by 12% to approximately $2.8 million in 2025 from about $2.5 million in 2024, primarily due to a $320K impairment of intangible assets and a $290K increase in amortization of intangibles[312]. - The company reported a net loss of $2,540,368 for the year ended December 31, 2025, compared to a net loss of $1,773,942 for 2024, reflecting an increase in non-cash expenses[338]. - Total revenue increased by $2,868,141, or 36%, for the year ended December 31, 2025, driven by acquisitions and increased digital product sales[339]. - B2B revenue increased by $2,688,302, or 62%, during the year ended December 31, 2025, primarily due to the Eastern Standard acquisition[350]. - B2C revenue increased by $179,839, or 5%, during the year ended December 31, 2025, mainly from digital product sales in the Proofread Anywhere subsidiary[353]. - Total cost of revenue increased by $982,820, or 30%, due to recent acquisitions and increased service costs[341]. - General and administrative expenses rose by $1,748,926, or 31%, during the year ended December 31, 2025, primarily due to higher advertising and contractor costs[342]. - The company recognized total impairment charges of approximately $440,000 for the year ended December 31, 2025, compared to $121,000 for 2024[346]. Cash Flow and Financing - The company ended 2025 with $2.17 million in cash, up from $0.47 million at the end of 2024, and utilized approximately $500K for regular business operations post-year-end[314]. - The company raised approximately $1,700,000 from private offerings of Series A preferred stock and $1,000,000 from common stock offerings through December 31, 2025[355]. - The company entered into a securities purchase agreement to sell $6,000,000 in Senior Secured Convertible Notes, maturing on November 17, 2027[356]. - As of December 31, 2025, the company received $2,322,500 in cash proceeds and $2,447,500 in digital assets from the Senior Secured Notes[357]. - Cash used in investing activities was $2,480,759 for the year ended December 31, 2025, primarily related to investments in digital assets, compared to cash provided of $451,000 in 2024[361]. - Cash flows from financing activities increased significantly to $5,094,351 in 2025 from $326,336 in 2024, indicating improved financing conditions[362]. - The company received $4,770,000 from convertible notes payable and $993,356 from common stock units sales during 2025, highlighting successful capital raising efforts[363]. Digital Assets and Investments - The company acquired approximately $2.4 million in digital assets, including Bitcoin, Ether, and Solana, during Q4 2025, with a total fair value of approximately $2.3 million as of December 31, 2025[308]. - The company holds digital assets including Bitcoin, Ether, and Solana, with fair value changes recognized in income, reflecting the company's engagement in cryptocurrency markets[372]. - The company utilizes a third-party asset manager for staking ETH and SOL, retaining these assets on its balance sheet measured at fair value[375]. Future Plans and Strategy - The company plans to pursue growth through acquisitions in 2026, having reviewed several promising opportunities in its pipeline[332]. - The company aims to create a unified "AgencyCo" structure to enhance alignment across its agencies, adapting to changes brought by AI in the industry[317]. - The company anticipates balancing the need to reinvent parts of its agency while ensuring continued reliable cash flow across its portfolio in 2026[319]. Non-GAAP Measures and Financial Metrics - The company presents EBITDA and EBITDA As Defined as non-GAAP financial measures to evaluate operating performance and liquidity, although these measures have limitations[384]. - EBITDA As Defined for 2025 was $151,207, a significant improvement from $(587,651) in 2024, attributed to the acquisition of Eastern Standard[313]. - EBITDA for the year ended December 31, 2025, was $(823,408), while for the year ended December 31, 2024, it was $(765,538)[391]. - Depreciation and amortization expense increased to $1,201,161 in 2025 from $906,737 in 2024[391]. - Interest expense, net, rose to $498,409 in 2025 from $101,667 in 2024[391]. - Impairment losses were reported at $733,962 for 2025, significantly higher than $121,000 in 2024[391]. - Stock-based compensation increased to $240,653 in 2025 from $56,887 in 2024[391]. - The company did not provide quantitative and qualitative disclosures about market risk, indicating a focus on internal financial metrics[392].