ONFO 10-K & 10-Q changes, risk factors and insider trading

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:

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.

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.

EasternStandard.com

Pace Generative

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.

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.

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:

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:

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.

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.

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.

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”).

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.

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.

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.

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.

We are not in compliance with certain of Nasdaq’s continued listing requirements, and additional recently effective Nasdaq rules provide for immediate delisting with no compliance period. If we are unable to regain and maintain compliance, our common stock and warrants will be delisted from Nasdaq.

On May 26, 2026, we received a notice from the Listing Qualifications Department of Nasdaq stating that we were not in compliance with the minimum stockholders’ equity requirement of Nasdaq Listing Rule 5550(b)(1), which requires listed companies to maintain stockholders’ equity of at least $2,500,000. We submitted a plan to regain compliance, which remains under review by Nasdaq. There can be no assurance that Nasdaq will accept our plan or grant us an extension period, or that we will be able to regain compliance with the stockholders’ equity requirement within any extension period granted.

On July 2, 2026, we received a notice from Nasdaq stating that we were not in compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2), as the closing bid price of our common stock was below $1.00 per share for 30 consecutive business days. We have until December 29, 2026 to regain compliance, which requires the closing bid price of our common stock to be at least $1.00 per share for a minimum of ten consecutive business days. On August 10, 2026, the Company completed a 1-for-50 reverse stock split of its common stock as part of its effort to regain compliance with Nasdaq Listing Rule 5550(a)(2). We previously received a similar notice in January 2026 and organically regained compliance on April 30, 2026. There can be no assurance that we will regain compliance on this occasion or that we will remain in compliance thereafter.

Further, effective July 22, 2026, the U.S. Securities and Exchange Commission initially approved changes to Nasdaq Listing Rules 5550(a)(6) and 5810(c)(1), creating an immediate Staff Delisting Determination with no compliance period if a company’s Market Value of Listed Securities (“MVLS”) stays below $5,000,000 for 30 consecutive business days. Under those specific rules, an appeal or request for a review hearing would not have automatically stayed the suspension of trading. Following petitions for review, the U.S. Securities and Exchange Commission issued a letter on July 29, 2026, staying the July 22 approval order “until the Commission orders otherwise,” which temporarily puts the implementation of the rule on hold. There can be no assurance that the stay will remain in effect and that the approved changes to Nasdaq Listing Rules 5550(a)(6) and 5810(c)(1) will not ultimately be implemented. If the stay does not remain in effect and the Company’s MVLS stays below $5,000,000 for 30 consecutive business days, we will be subject to an immediate Nasdaq Staff Delisting Determination with no compliance period.

If our common stock and warrants were delisted from Nasdaq, we would expect trading, if any, to occur on an over-the-counter market, which would likely reduce the liquidity and market price of our common stock, impair our ability to raise capital, including under the Equity Purchase Facility Agreement, reduce the number of investors willing or able to hold or acquire our securities, and could have adverse consequences under our existing financing arrangements. Delisting could also impair our ability to pursue a strategic transaction, such as a reverse merger or similar business combination.

Our recent 1-for-50 Reverse Stock Split may not ensure compliance with Nasdaq’s continued listing standards, and our failure to maintain a $1.00 minimum bid price could lead to immediate delisting.

While the primary objective of our recent 1-for-50 reverse stock split was to increase the per-share market price of our common stock to meet the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), we cannot guarantee that the market price after the split will remain above the $1.00 threshold. Under recent Nasdaq rule amendments, Nasdaq has accelerated delisting timelines and restricted the frequency of reverse splits used to cure bid price deficiencies. If our share price drops below $1.00 again, we face a more restricted path to recovery, eliminating our ability to easily implement successive splits.

Further, our 1-for-50 reverse stock split does not increase our stockholders’ equity and does not increase the aggregate market value of our listed securities, and therefore would not, by itself, address the deficiencies under the above-described Nasdaq Listing Rules 5550(b)(1) or 5550(a)(6) (applicable only if the existing stay does not remain in effect). Consequently, if we do not timely cure such deficiency(ies), we will be subject to rapid trading suspension and immediate delisting.

Our recent 1-for-50 Reverse Stock Split has significantly expanded our pool of authorized but unissued shares, exposing our existing shareholders to substantial and immediate dilution.

Because our recent 1-for-50 reverse stock split reduced our outstanding shares without proportionally reducing the total number of authorized shares of common stock under our certificate of incorporation, the split has created a significant disparity between our outstanding and authorized share pools. This structural change provides our Board of Directors with an increased volume of unissued, available shares. Subject to applicable Nasdaq Listing Rules, our Board can issue these shares at its discretion for future equity financings, debt conversions, strategic acquisitions, or stock incentive plans without requiring further shareholder approval. Any future issuances of our common stock will result in immediate dilution to the ownership percentages, voting power, and earnings per share of our current stockholders. Frequent or large equity raises could place persistent downward pressure on our post-split share price, potentially eliminating the price gains achieved by the 1-for-50 reverse stock split.

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.

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.

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.

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:

Revenues

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

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.

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:

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.

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.

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.