Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with our consolidated financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical consolidated financial statements which are included 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.

Overview

Onfolio Holdings Inc. acquires controlling interests in and actively manages 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 websites 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 websites. 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- and majority-owned subsidiaries.

The second quarter of 2026 saw continued integration of our agencies, while the Company focused on improving operating results across the portfolio. Revenue for the quarter was $1.50 million, compared to $3.15 million in Q2 2025. Loss from operations was $0.97 million, compared to $0.51 million in Q2 2025. Of the Q2 2026 loss from operations, approximately $160,000 was amortization of intangible assets from prior acquisitions and $15,000 was stock-based compensation, both of which are non-cash items.

Our EBITDA As Defined in Q2 2026 was $(776,255), compared to $(150,950) in Q2 2025. 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.

The second quarter was a challenging one, with our portfolio companies focused on preserving cash flow and reducing expenses. There were standout performers, notably RevenueZen, whose results improved significantly after Eastern Standard took over management of its fulfilment, but overall portfolio performance is not yet where we need it to be. As we have discussed in recent public updates, our current portfolio on its own does not have the scale required to reach consolidated profitability. We now believe that reaching consolidated profitability requires adding profitable operations through acquisition, and management is actively pursuing several opportunities that we believe could be accretive, including where funded through our equity purchase facility.

On April 10, 2026, we entered into an equity purchase agreement with an institutional investor providing for the sale of up to $100 million of newly issued common stock, subject to the conditions described in Note 8. We believe this equity purchase facility can provide financing to grow our portfolio and support growth in our existing portfolio companies.

Management is also exploring acquisitions in which a substantial portion of the purchase price would be deferred, which could allow us to add profitable operations before accessing additional capital.

A principal focus of management is on cash and on managing our debt. Subsequent to June 30, 2026, we settled the remaining balance owed under our Senior Secured Convertible Notes, including accrued liquidated damages and Floor Penalties, through the issuance of common stock, and no principal remained outstanding under those notes as of the date of this Report (Note 15). With that indebtedness resolved, discussions regarding additional funding are ongoing.

Reverse Stock Split

On August 10, 2026, the Company effected a 1-for-50 reverse stock split of its issued and outstanding common stock, pursuant to the authority approved by the Company's stockholders at the special meeting of stockholders held on April 6, 2026. The total number of shares of stock which the Company shall have authority to issue remains at 305,000,000 shares, consisting of (i) 300,000,000 shares of common stock, par value $0.001 per share, and (ii) 5,000,000 shares of preferred stock, par value $0.001, of which 1,000,000 shares of preferred stock remain designated as series A Preferred Stock. Unless otherwise indicated, all share and per-share amounts in these consolidated financial statements and the accompanying notes have been retroactively adjusted, for all periods presented, to give effect to the reverse stock split.

35

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;"
	·	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, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (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.

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 and grow revenue;
	·	our ability to offer competitive product pricing and control expenses;
	·	our ability to broaden product offerings;
	·	industry demand and competition;
	·	our ability to leverage technology and use and develop efficient processes;
	·	our ability to attract and retain talented employees;
	·	our ability to identify and acquire companies at reasonable prices and terms;
	·	our ability to reduce and control corporate overhead; and
	·	Our market position and market conditions, including the effects of government policies, tariffs and trade barriers.

36

Results of Operations

Three Months Ended June 30, 2026 compared to the Three Months Ended June 30, 2025

The Company reported a net loss of $4,602,551 for the three months ended June 30, 2026, compared to a net loss of $534,439 for the three months ended June 30, 2025. For the three months ended June 30, 2026, the Company's reported a net loss includes a $280,685 non-cash loss on the change in fair value of digital assets, and a $2,948,217 non-cash loss on the change in fair value of derivative liabilities. The components of the change in net loss for the current periods are as follows:

Revenues

		For the Quarter Ended June 30,								$ Change from prior				% Change from prior
		2026				2025				Year				year
Revenue, services		$	1,218,962			$	2,062,603			$	(843,641	)			(41	)%
Revenue, product sales			278,593				1,085,606				(807,013	)			(74	)%
Total Revenue		$	1,497,555			$	3,148,209			$	(1,650,654	)			(52	)%

Revenue decreased by $1,650,140, or 52% for the three months ended June 30, 2026 compared to 2025. The decrease is primarily due to lower revenue at our Eastern Standard subsidiary, which experienced a slowdown in new sales beginning late in the first quarter of 2026, lower digital product sales at our Proofread Anywhere subsidiary reflecting substantially reduced advertising spend, and the absence of revenue from businesses divested during 2026.

Cost of Revenue

		For the Quarter Ended June 30,								$ Change from				% Change from
		2026				2025				prior year				prior year
Cost of revenue, services		$	731,179			$	1,074,065			$	(342,886	)			(32	)%
Cost of revenue, product sales			34,373				135,867				(101,494	)			(75	)%
Total Cost of Revenue		$	765,552				1,209,932			$	(444,380	)			(37	)%

Cost of revenue decreased by $444,380, or 37% for the three months ended June 30, 2026 compared to 2025, reflecting lower service fulfilment costs in line with lower services revenue and lower product costs on reduced product sales. The Company's gross profit margin decreased in the current period compared to the prior period, primarily reflecting the shift in revenue mix toward the lower-margin B2B services segment. The components most significant to the Company's cost of revenue are the costs of labor for service fulfilment, content creation, website hosting and maintenance costs and the costs of acquiring new inventory products for physical product sales.

37

Operating Expenses

Selling, General and Administrative

General and Administrative expenses decreased by $924,148, or 45% during the three months ended June 30, 2026 compared to 2025. The decrease was primarily due to lower advertising and marketing costs of $577,000, lower stock-based compensation expense of $11,000, and lower amortization expense of approximately $141,000, reflecting the impairment of intangible assets recorded at December 31, 2025 and certain intangibles reaching the end of their expected life. The remaining decrease of approximately $195,000 was spread across compensation, contractor, and other general and administrative cost categories following the integration of our agency businesses.

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 $209,122, or 60% during the three months ended June 30, 2026 compared to 2025, primarily due to higher legal, audit and other professional fees, with the increase concentrated at the Corporate level, including costs associated with the Company's financing arrangements, Nasdaq listing compliance matters and strategic transaction activity.

Other Income and expense

Total other expense was $3,637,043 during the three months ended June 30, 2026, compared to other expense of $27,788 during the three months ended June 30, 2025. The increase in other expense was driven primarily by an increase in interest expense of approximately $336,000 on the outstanding notes, a $281,000 loss on the change in fair value of digital assets, a $2,950,000 loss on the change in fair value of derivative liabilities.

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 three Months ended June 30,
		2026				2025
Revenue
B2B		$	1,218,406			$	1,974,771
B2C			279,149				1,173,438
Total revenue		$	1,497,555			$	3,148,209
Cost of Sales
B2B		$	729,313			$	1,052,778
B2C			36,239				157,154
Total Cost of Sales		$	765,552			$	1,209,932
Operating income (loss)
B2B		$	(102,832	)		$	70,173
B2C			43,258				150,261
Total business segment operating income (loss)			(59,574	)			220,434
Unallocated items			(905,934	)			(726,957	)
Total consolidated operating income (loss)		$	(965,508	)		$	(506,523	)

38

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, Pace Generative, and DealPipe. These entities share similar characteristics such as customers being businesses and being primarily service-related revenue.

B2B revenue decreased by $756,365 or 38% during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily due to lower revenue at our Eastern Standard subsidiary, together with lower revenue across our other agency subsidiaries, partially offset by new revenue from our Pace Generative subsidiary, which had no comparable revenue in the prior period.

B2B incurred total operating loss of $102,832 during the three months ended June 30, 2026 compared to operating income of $70,173 in the comparable 2025 period. This was primarily due to the revenue decline at our Eastern Standard subsidiary, partially offset by improved operating results at our RevenueZen subsidiary following the integration of its fulfilment operations with Eastern Standard.

B2C

Our B2C segment includes the results of operations of Proofread Anywhere, Onfolio Assets, Mighty Deals (divested January 2026), 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 decreased by $894,289 or 76% during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease is primarily due to lower digital product sales at our Proofread Anywhere subsidiary, reflecting substantially reduced advertising spend, and the absence of revenue from businesses divested during 2026.

B2C incurred total operating income of $43,258 during the three months ended June 30, 2026 compared to operating income of $150,261 in the comparable 2025 period, with the decrease primarily due to the decrease in sales from the Proofread Anywhere subsidiary.

Six Months Ended June 30, 2026 compared to the Six Months Ended June 30, 2025

For the six months ended June 30, 2026, the Company reported a net loss of $7,175,162, which includes a $954,842 non-cash loss on the change in fair value of digital assets, a $654,745 default penalty for liquidated damages, and a $3,019,609 non-cash loss on the change in fair value of derivative liabilities, compared to a net loss of $1,340,867 for the six months ended June 30, 2025. The components of the change in net loss for the current periods are as follows:

39

Revenues

		For the Period Ended June 30,								$ Change from prior				% Change from prior
		2026				2025				Year				year
Revenue, services		$	2,778,700			$	3,859,198			$	(1,080,498	)			(28	)%
Revenue, product sales			585,720				2,100,954				(1,515,234	)			(72	)%
Total Revenue		$	3,364,420			$	5,960,152			$	(2,595,732	)			(43	)%

Revenue decreased by $2,595,732, or 43% for the six months ended June 30, 2026 compared to 2025. The decrease is primarily due to lower revenue at our Eastern Standard subsidiary, which experienced a slowdown in new sales beginning late in the first quarter of 2026, lower digital product sales at our Proofread Anywhere subsidiary reflecting substantially reduced advertising spend, and the absence of revenue from businesses divested during 2026.

Cost of Revenue

		For the Quarter Ended June 30,								$ Change from				% Change from
		2026				2025				prior year				prior year
Cost of revenue, services		$	1,635,548			$	2,086,349			$	(450,801	)			(22	)%
Cost of revenue, product sales			78,734				228,406				(149,672	)			(66	)%
Total Cost of Revenue		$	1,714,282			$	2,314,755			$	(600,473	)			(26	)%

Cost of revenue decreased by $600,473, or 26% for the six months ended June 30, 2026 compared to 2025, reflecting lower service fulfilment costs in line with lower services revenue and lower product costs on reduced product sales. The Company's gross profit margin decreased in the current period compared to the prior period, primarily reflecting the shift in revenue mix toward the lower-margin B2B services segment. 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 decreased by $1,824,708, or 43% during the six months ended June 30, 2026 compared to 2025. The decrease was primarily due to lower advertising and marketing costs of $1,089,000, lower stock-based compensation expense of $269,000, and lower amortization expense of approximately $238,000, reflecting the impairment of intangible assets recorded at December 31, 2025 and certain intangibles reaching the end of their expected life. The remaining decrease of approximately $229,000 was spread across compensation, contractor, and other general and administrative cost categories following the integration of our agency businesses.

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 $401,921, or 69% during the six months ended June 30, 2026 compared to 2025, primarily due to higher legal, audit and other professional fees, with the increase concentrated at the Corporate level, including costs associated with the Company's financing arrangements, Nasdaq listing compliance matters and strategic transaction activity.

40

Other Income and expense

Total other expense was $5,376,299 during the six months ended June 30, 2026, compared to other expense of $66,193 during the six months ended June 30, 2025. The increase in other expense was driven primarily by an increase in interest expense of approximately $1,209,000 on the outstanding notes, a $655,000 default penalty for liquidated damages under the Senior Secured Notes, a $955,000 loss on the change in fair value of digital assets, a $3,020,000 loss on the change in fair value of derivative liabilities, and losses on cost basis investments of $129,000, partially offset by a $108,000 gain on the sale of subsidiary assets recorded during the current period, with no comparable transaction in the prior period.

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 Six Months ended June 30,
		2026				2025
Revenue
B2B		$	2,740,234			$	3,668,685
B2C			624,186				2,291,467
Total revenue		$	3,364,420			$	5,960,152
Cost of Sales
B2B		$	1,629,826			$	2,035,130
B2C			84,456				279,625
Total Cost of Sales		$	1,714,282			$	2,314,755
Operating income (loss)
B2B		$	(214,729	)		$	19,628
B2C			140,636				378,419
Total business segment operating income (loss)			(74,093	)			398,047
Unallocated items			(1,724,770	)			(1,690,112	)
Total consolidated operating income (loss)		$	(1,798,863	)		$	(1,292,064	)

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.

41

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 revenue.

B2B revenue decreased by $928,451 or 25% during the six months ended June 30, 2026 compared to 2025. The decrease was primarily due to lower revenue at our Eastern Standard subsidiary, together with lower revenue across our other agency subsidiaries, partially offset by new revenue from our Pace Generative subsidiary, which had no comparable revenue in the prior period.

B2B incurred total operating loss of $214,729 during the six months ended June 30, 2026 compared to operating income of $19,628 in the comparable 2025 period. This was primarily due to the revenue decline at our Eastern Standard subsidiary, partially offset by improved operating results at our RevenueZen subsidiary following the integration of its fulfilment operations with Eastern Standard.

B2C

Our B2C segment includes the results of operations of Proofread Anywhere, Onfolio Assets, Mighty Deals (divested January 2026), 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 decreased by $1,667,281 or 73% during the six months ended June 30, 2026 compared to 2025. The decrease is primarily due to lower digital product sales at our Proofread Anywhere subsidiary, reflecting substantially reduced advertising spend, and the absence of revenue from businesses divested during 2026.

B2C incurred total operating income of $140,636 during the six months ended June 30, 2026 compared to $378,419 in the comparable 2025 period, with the decrease primarily due to the decrease 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 $1,700,000 pursuant to a private offerings of Series A preferred stock and approximately $1,000,000 of common stock private offerings through June 30, 2026, $1,500,000 in notes payable and repaid $2,164,498 on its acquisition notes.

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 June 30, 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.

Cash used in operating activities

Net cash used in operating activities was $1,454,536 and $575,164 for the six months ended June 30, 2026 and 2025, respectively. The increase in cash used reflects a decrease in operating results and a decrease in deferred revenue compared to the prior period. The net loss in the current period was substantially offset by non-cash charges, principally the $3,019,609 loss on the change in fair value of derivative liabilities, the default penalty from liquidated damages of $654,745 and the $954,842 loss on the change in fair value of digital assets, none of which existed in the prior period.

42

Cash used in investing activities

The Company had no investing activities during the six months ended June 30, 2026 and 2025.

Cash provided by financing activities

Cash flows used in financing activities was $471,390 for the six months ended June 30, 2026 compared to cash provided by financing activities of $585,097 during the six months ended June 30, 2025. During the 2026 period, we paid $253,010 in dividends to preferred stockholders, made payments totaling $205,307 on notes payable, made payments totaling $99,771 on notes payable - related parties, made payments totaling $112,119 related to contingent consideration and made distributions totaling $13,883 to our non-controlling interest holders, which was offset by proceeds of $212,700 from notes payable. During the 2025 period, we received $830,000 in proceeds from sales of Series A preferred stock, $358,800 in proceeds from notes payable and $35,965 in proceeds from related party notes payable, which were offset by $201,848 in payments of dividends to preferred stockholders, payments totaling $266,295 on notes payable, payments totaling $133,845 related to contingent consideration and made distributions totaling $37,680 to our 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 June 30, 2026, the Company estimated the remaining obligations owed under the revenue share obligation to be $16,102.

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 June 30, 2026, the Company estimated the remaining obligations owed under the revenue share provisions to be $56,265.

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 cost 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.

43

The current investment in unconsolidated affiliates accounted for under the equity method consists of a 35.8% interest in OnFolio JV IV, LLC ("JV IV"), which is involved in the acquisition, development and operation of websites 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 digital assets 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.

44

Native Staking

The Company utilized one third-party asset manager to manage and stake ETH and SOL on its behalf as of June 30, 2026. 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.

45

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.

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 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.

46

The following table sets forth a reconciliation of net income to EBITDA and EBITDA As Defined:

		For the Six months ended June 30, 2026				For the Six months ended June 30, 2025
Net loss		$	(7,175,162	)		$	(1,340,867	)
Interest expense, net			1,381,946				173,322
Taxes			-				-
Depreciation and amortization expense			364,609				603,081
EBITDA			(5,428,607	)			(564,464	)
Change in fair value of digital assets			954,842				-
Change in fair value of contingent consideration			20,107				(70,712	)
Change in fair value of derivative liabilities			3,019,609				-
Impairment of equity and cost method investments			129,007				-
Stock-based compensation (1)			30,047				298,943
EBITDA As Defined		$	(1,274,995	)		$	(336,233	)

(1)	Represents the compensation expense recognized under our stock option plans and deferred compensation plans.