Onfolio Holdings, Inc.

Total revenue was $1.5 million, down 52% from $3.15 million a year ago and down about 20% from $1.87 million in Q1 2026. Revenue from services was $1.22 million, down 41% year over year, and revenue from product sales was $279,000, down 74% year over year. Gross profit was $732,000 and gross margin was approximately 49%, flat with roughly 49% in Q1. B2B swung to an operating loss of about $103,000 versus operating income of $70,000 last year, while B2C generated operating income of about $43,000 versus $150,000 last year. Total operating expenses were $1.7 million, down 31% year over year, and net loss was $4.6 million versus $534,000 a year ago. Cash at June 30 was $251,000, stockholders’ equity was a deficit of approximately $3.11 million, and total liabilities were $9.61 million. After quarter end, the senior secured notes were fully settled and extinguished; the holder converted $5.5 million of principal and about $30,000 of interest into approximately 721,000 shares, and the remaining balance plus damages and floor penalties was settled with issuance of about 1.58 million additional shares. Management did not give formal revenue or EPS guidance for next quarter or the full year, but said gross margin should stay near current levels until B2C stabilizes and that the third quarter should reflect the unwind of the derivative liability rather than further losses from it.

Dom Wells framed the quarter as a setback on organic growth and cash generation, saying the portfolio did not turn the corner as expected and that parent-level cash remained constrained. He emphasized that the immediate priorities are growing cash flow from the existing portfolio, reducing parent costs, and resuming accretive acquisitions, with the goal of reaching self-funding status. His tone was direct and cautious, but more constructive on the future after describing Nasdaq compliance as largely addressed and acquisitions as the biggest near-term lever.

Adam Trainor focused on the financial deterioration and balance-sheet repair. He highlighted the $1.5 million of revenue, $732,000 of gross profit, 49% gross margin, $966,000 operating loss, and $4.6 million net loss, noting that most of the net loss was noncash and tied to a $2.95 million fair-value loss on the derivative liability, plus $281,000 from digital-asset marks and about $336,000 of higher interest expense. He also underscored the $251,000 cash balance at quarter end, the $3.11 million equity deficit, and the post-quarter note extinguishment and asset sales that he said leave the September 30 balance sheet structurally improved, though liquidity is not fully solved.

Analysts pressed on whether stockholders’ equity was still negative; management said it was negative at the end of Q2 but positive after Q3 note conversions. Questions also focused on what went wrong with the prior financing structure and how the company would avoid repeating it; management pointed to crypto collateral, stock pressure, and too much cash locked up rather than usable, and said future financing should use better terms, more usable cash, and less stranded collateral. On acquisitions, management said future deals should rely more on stronger underlying businesses, more earn-out and amortizing seller-note structures, and less on balloon payments, while also saying the company intends to be more active but not reckless.