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Good morning, and welcome to the Onfolio Holdings First Quarter 2026 Earnings Conference Call. Joining us today are Dominic Wells, Chief Executive Officer, and Adam Trainor, Chief Operating Officer and Interim Chief Financial Officer. Before we begin, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied. Forward-looking statements are based on management's current expectations as of today's date, and the company undertakes no obligation to update or revise any such statements. For a detailed description of risks and uncertainties, please refer to the Risk Factors section of the company's most recent Form 10-Q filed with the SEC.

Additionally, during this call, management may reference certain non-GAAP financial measures and supplemental operating metrics as indicators of performance. These measures should not be considered in isolation or as substitutes for GAAP results. A reconciliation of non-GAAP measures to the most comparable GAAP measures is available on the company's SEC filings, which can be found on the company's website at investors.onfolio.com/filings. With that, I'll turn the call over to Dominic Wells.

Thank you, and good morning, everyone. We appreciate you joining us today. Before we dive into the quarter and our operational highlights, I wanted to provide a quick overview of who we are at Onfolio Holdings. We are an owner/operator of cash-generating digital businesses, primarily in B2B marketing agencies and B2C online education. Since our IPO in 2022, we have grown revenues from approximately $2 million-$10.7 million in the full year 2025, roughly a 5x increase, entirely through acquiring and operating real businesses that generate real cash flow. As I discussed on our last conference call, we spent 2023 and 2024 building our initial portfolio. At the beginning of 2025, we deliberately paused our acquisition strategy to focus on getting our existing portfolio to a point where it could fund parent company costs.

As we closed out 2025, we made significant strides in achieving consistent profitability, but we recognized we were not quite there and needed to turn our acquisition machine back on. While we have turned more of our attention to acquisitions, including our recently announced financing, which I'll address momentarily, that does not mean we have stopped building upon our operational momentum and optimizing our current portfolio of companies. In fact, we continue to make progress in Q1, enhancing various business models across our portfolio. This resulted in shedding some unprofitable revenue lines, producing a near-term decline in overall revenue but greatly increasing operating efficiency and profitability, giving us a more profitable foundation to grow revenue from. Let's dive further into progress made during the quarter in our two segments, B2B and B2C.

We continued to see success with our new AgencyCo structure that I introduced on our last call. As a reminder, we have now begun treating our agencies as a unified platform in an effort to create centralized backend fulfillment, shared sales and marketing infrastructure, and clearer accountability across the portfolio. We believe it makes our agency businesses more durable and positions them for the changes AI is bringing to agency work. During Q1, we made significant progress with this strategy that we believe will result in notable profitability growth in the coming quarters. While our revenue for this segment declined approximately 10% year-over-year, this was an intentional repositioning, specifically with our RevenueZen portfolio company, which we began restructuring in late 2025 as the business was running at approximately 8% operating margins.

The service was solid, and the clients were happy, but the cost structure was heavier than it needed to be. We did two things. First, we consolidated RevenueZen's operational overhead under Eastern Standard, our largest agency and the anchor of the B2B agency platform. Second, we didn't replace departed team members with new hires. Toward the end of 2025, two senior leaders moved on from the company, and instead of replacing them, we rebuilt the core operational processes using AI. The team rethought how content gets produced, how client reporting works, and how campaigns get managed. The result was a structural reduction in manual overhead and significantly faster turnaround on new business proposals. As a result, operating expenses dropped by over 40%, and the business is now running at approximately 15% operating margins, nearly double where it started, while service delivery quality held.

The operational playbook we developed here is now being deployed across additional portfolio companies. The pattern is straightforward. Consolidate operational overhead across portfolio companies rather than running duplicate infrastructure, rebuild processes with AI rather than hiring to fill gaps, and focus the team on revenue-generating activities rather than manual overhead. We believe this is what an AI-native operating model looks like in practice. In our B2C segment, as we discussed during our last call, we deliberately pulled back ad spend at Proofread Anywhere, where returns have started to compress. Q1 reflects that decision. By cutting advertising spend by more than 80% year-over-year at Proofread Anywhere, we held the majority of the prior year's operating profit on roughly one-third of the prior year's revenue. Net operating margin at the business expanded by approximately 800 basis points.

Vital Reaction, our other B2C property, turned modestly profitable on the quarter after losses in the prior year period. As we rebuild the revenue base, we're applying the same playbook I described for our B2B segment. Media buying, ad creative production, and email marketing are now consolidated across both B2C properties, and we're putting AI to work in each of those workflows. The goal is to bring paid advertising back at meaningfully better unit economics than before. We believe Q1 is the trough for B2C revenue, and we've already started rebuilding from that base. I wanted to touch on a key development post Q1. In April, we secured a new $100 million equity facility to further accelerate our acquisition strategy. As I just spoke to, we spent 2025 closing the gap to profitability, and now we're deploying capital to grow.

This facility is another tool in our growing capital toolkit. It gives us more optionality to move aggressively on acquisitions, plugging each one into the AI infrastructure we've built, while continuing to compound through both our operating businesses and our digital asset treasury. The way we think about it internally is straightforward. We are buying online businesses three to four times free cash flow in a market that is too small for institutional private equity to compete in. We layer our AI operating playbook on top of those businesses to expand margins, as we did with RevenueZen. From this, every dollar of capital we deploy through this facility is intended to translate into multiple dollars of intrinsic value per share. The arithmetic works, provided we continue to maintain capital discipline. It is also worth noting that this facility is discretionary. We're not obliged to draw it.

We control the timing, the amount, and the use of proceeds. We will only issue equity when we have a specific accretive use of the capital, primarily acquisitions that immediately add cash flow, with a smaller portion allocated to growing our digital asset reserve. If conditions are not right, we don't draw. That is a meaningful protection for shareholder value. Lastly, before I turn it over to Adam to walk through the financials, I wanted to highlight that we officially regained compliance with Nasdaq's minimum bid price requirement on May 1, 2025. Maintaining our Nasdaq listing is foundational to everything we're building. With compliance restored and our recently announced $100 million equity facility in place, we remain committed to executing our AI-powered acquisition and growth strategy and continuing to compound value across our portfolio.

With that, I'll now turn the call over to Adam to walk through our financial results for Q1 2026, and then I'll return with more context on our plans for the remainder of the year. Adam, over to you.

Thanks, Dom. Glad to be speaking with you all today. Unless otherwise noted, all comparisons are first quarter 2026 versus first quarter 2025. Starting with our P&L, total revenue for the first quarter of 2026 was $1.9 million, a decrease of 34% from $2.8 million in the first quarter of 2025. Revenue from services, primarily our B2B segment, was $1.6 million, a decrease of about 10% from $1.8 million in the prior-year period. As Dom described, this primarily reflects the intentional repositioning of RevenueZen, where we consolidated operational overhead under Eastern Standard and rebuilt core processes using AI, partially offset by continued growth at Eastern Standard and a new contribution from our Pace Generative subsidiary, which did not exist in the comparable period.

Revenue from product sales, primarily our B2C segment, was $307,000 compared to $1 million in the prior-year period. The decline reflects the deliberate ad spend pullback at Proofread Anywhere that we initiated in the second half of 2025 to preserve unit economics as well as lower contributions from Vital Reaction in the period. Gross profit for the first quarter was $0.9 million compared to $1.7 million in the prior-year period. Gross margin was approximately 49% compared to 61% in the first quarter of 2025. The margin contraction primarily reflects the shift in revenue mix as higher-margin digital product sales declined as a percentage of total revenue.

As our agency platform continues to deliver on the AI-driven operating leverage Dom described, and as our B2C business is normalized, we still expect gross margin to trend to the mid 60% range over the course of 2026. Total operating expenses were $1.8 million, a decrease of 30% from two and a half million in the prior-year period. Within that, selling, general, and administrative expenses decreased $901,000 or 41%, to $1.32 million. The decrease was driven primarily by lower advertising and marketing costs, with the remainder spread across compensation, contractor, and other G&A categories. This is The AgencyCo and AI native operating model showing up in the financials.

Professional fees did increase to $431,000, primarily driven by higher legal and audit fees related largely to our recent capital markets activity. Loss from operations was $833,000, essentially flat compared to the prior year period, despite the revenue decline, reflecting the meaningful operating expense reductions. Net loss for the first quarter of 2026 was $1.9 million, compared to a net loss of $0.9 million in the prior-year period. This figure includes approximately $365,000 in non-cash expenses, a $674,000 non-cash loss on the change in fair value of digital assets, and a $71,000 non-cash loss in the change in fair value of derivative liabilities. None of those latter two items had a comparable amount in the prior year period.

They relate to the convertible note facility we opened in November 2025 and mark-to-market movements in our digital asset holdings during the quarter. We also recorded approximately $218,000 of additional interest expense year-over-year as a result of higher note balances. Excluding those non-cash items, the underlying operating performance is more consistent with the prior year than the headline number suggests. As a reminder, we believe portfolio operating profit is a non-GAAP metric that most directly reflects the health and trajectory of our businesses. On a trailing 12-month basis, portfolio operating profit was a loss of approximately $1.6 million compared to a loss of approximately $1.2 million in the prior trailing 12-month period. The reported comparison reflects approximately $440,000 of non-cash impairments we took during 2025 on legacy joint venture investments.

Excluding those one-time impairments, portfolio operating profit was modestly improved year-over-year despite the deliberate revenue actions we took during the year, including the RevenueZen restructuring on the B2B side and the ad spend pullback at Proofread Anywhere. We expect both of those actions to support expanding portfolio profitability over the course of 2026. Turning to our balance sheet. As of March 31, 2026, we had cash of $842,000 compared to $2.2 million at year-end 2025. The decline reflects normal operating uses, payment of accrued preferred dividends, scheduled debt service, and the absence of any new financing inflows, as our $100 million equity facility was entered into post quarter-end.

Our digital asset holdings had a total fair value of approximately $1.6 million at quarter end compared to $2.3 million at year-end 2025. The decline was driven almost entirely by mark-to-market price movements and is reflected in the $674,000 non-cash loss I mentioned earlier. Our current holdings consist of 5.32 Bitcoin, approximately 320 Ethereum, of which approximately 288 Ethereum are staked, and approximately 6,888 Solana, all of which are staked. These holdings continue to generate staking rewards. We received approximately $15,000 in staking rewards during the quarter, plus approximately $11,000 in digital assets received in settlement of customer accounts receivable. We continue to view these holdings as a long-term balance sheet asset rather than a trading position.

In debt, total outstanding indebtedness was $7.7 million compared to $7.8 million at year-end. The slight decrease primarily reflects a reduction in deferred revenue and scheduled paydowns of notes payable. Notes payable to related parties, primarily our Eastern Standard and RevenueZen seller notes and certain related party advances, totaled approximately $1.3 million across current and long-term, down from approximately $1.4 million at year-end. On our Series A preferred stock, 169,460 shares remain outstanding, carrying a 12% cumulative annual dividend payable quarterly. The board declared, and the company paid, the regular quarterly preferred dividend during the quarter, consistent with our record of paying every Series A preferred dividend on time since 2020.

With that, I'd like to hand the call back to Dom to discuss our go-forward strategic priorities at more length.

Thanks, Adam. Our priorities for 2026 remain the same. Generate more cash flow from the existing portfolio, resume acquisitions that immediately add to that cash flow, and close the gap between what the portfolio distributes and what it costs to run the parent company. When those two numbers cross, we are self-funding. That is the goal we work toward every day. We're also working aggressively to optimize our business by leveraging AI in a meaningful and real way, more than just talk, but delivering tangible improvements across our results, like the RevenueZen example I provided earlier. Our AI strategy is centered on delivering high-margin managed AI services to new and existing clients by leveraging frontier AI models to provide enterprise-grade content, marketing, data analytics, and automation solutions.

This is an asset-light approach, scaling AI revenue on top of existing frontier model infrastructure without the associated capital expenditure risks. We're already making progress rolling out AI services to our existing client base, plus using AI to improve our margins across the B2B segment of our portfolio. This has already resulted in a significant lift on the sales side also. Sticking with the RevenueZen example, Q1 2026 was the strongest quarter in the past year for this business, with five new clients closed at $38K in new monthly recurring revenue, a record number for this business. In addition, the B2C segment is benefiting from improved AI-powered data analytics, which is also something we plan to roll out as a new service to existing and new B2B clients.

As we make more acquisitions and grow our portfolio, this AI-powered services layer will become increasingly important in scaling our platform. With acquisitions at the forefront of our strategy in 2026, I want to spend a few minutes on how we are thinking about deals today because our framework has evolved meaningfully from the one we were operating under a year ago. The first thing to understand is that our balance sheet position has changed. With our convertible note facility and our newly announced $100 million equity facility in place, we have access to a level of capital that we simply did not have the past several years. That has changed the type of business we can pursue. We are seeing more established leadership teams, less customer concentration, and more recurring revenue than we were seeing 12 months ago.

Our pipeline currently targets acquisitions totaling $5 million-$10 million in annual adjusted EBITDA at an average multiple of 2-4x trading 12-month adjusted EBITDA before year-end. As a result, we believe the proposed acquisitions could approximately double our revenue run rate and bring our portfolio to profitability on a consolidated basis. The second thing, and this is where the AI thesis really comes in, is that every business we acquire makes the next acquisition easier and even more accretive. We have spent significant time and effort building an AI infrastructure across the portfolio. Instruction files, agent workflows, content production systems, client reporting, automation, and media buying optimization. Once that infrastructure exists, the marginal cost of plugging in a new acquisition drops meaningfully. A holding company is the ideal structure to deploy this. One team, multiple AI agents applied across every business in the portfolio.

The more businesses we own, the more valuable that infrastructure becomes. That is a flywheel that most companies cannot replicate. It also creates a specific kind of acquisition opportunity. There are a large number of profitable online businesses out there that have not adopted AI in any meaningful way within verticals that we already operate in, marketing agencies and e-commerce brands, where we've already proven what our AI operating model can do to margins. Many of them trade at lower valuations precisely because they look like they're at the end of their growth runway. We're also looking to expand into financial media and investor services, where we see significant opportunities to build a larger, more diversified platform. We can acquire businesses at attractive multiples and apply our AI operating playbook to drive immediate margin improvement and revenue growth. That is the recipe.

Buy at a relative discount, apply the playbook, expand margins, and recycle the cash flow into the next deal. Every deal makes the next one more accretive because the platform underneath gets better with each addition. To summarize the key takeaways from today's call, in the first quarter, we made deliberate decisions that reduced near-term revenue but materially improved the operating profile of both segments. We secured a $100 million equity facility post-quarter to fund accretive acquisitions, expand our AI services layer, and incrementally grow our digital asset reserve. We regained Nasdaq minimum bid price compliance on May first, and we have reengaged the acquisition pipeline with a sharper framework, larger target sizes, and a clearer view of how each new business compounds the value of the platform beneath. The plan is the same one we have been executing against.

Control parent company costs, grow portfolio cash flow, and acquire additional profitable businesses. What has changed is the position we are operating from. The balance sheet is stronger, the operating model is more efficient, the AI infrastructure is real and producing measurable results, and the capital is in place. Our job from here is execution. With that, I'll hand it back over to the operator to open the call for Q&A.

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Yegor Zadoriny with Private Investor. Please proceed with your question.

Good morning. Thank you for taking my questions. I got a few, if I may. You discussed acquisition looking between $5-$10 in aggregate in adjusted EBITDA, can you give more color on how many companies or what size of companies you're looking at? Just trying to get a better understanding of what you're looking at in terms of sizes of the company and the actual amount of companies, just to get an idea of, you know, integration. Any color would be helpful.

Sure. Typically it hasn't changed substantially compared to historically. I would say the minimum that we're targeting is about $1 million in EBITDA from a single company, but we're also looking at ones that are doing $2 million or $3 million. As always, we'll take smaller ones if it makes sense. In terms of quantity, we've got a pretty active pipeline. I think if we acquire as many companies as we'd like to, maybe half a dozen, it's really about finding the businesses that we feel confident running and the valuation makes sense and the business is in good shape. I think what's changed since our ELOC announcement and the other financing in November is that we do have much larger businesses coming into our pipeline, and sellers understand we're able to make larger acquisitions.

Maybe this answer changes in six months or so, but right now, I'd say that kind of $1 million-$3 million EBITDA size.

Thank you. Am I correct in reading that the gross margin declined from 61%-49%?

Yeah.

Is that something?

So-

You think? Mm-hmm.

Sorry. Go ahead with your question.

Yeah. Can you clarify whether, you know, lower gross margin is mostly a temporary mix, or is that something we can look forward to, that you're going to be more in, like, a 50 range moving on?

I'll let Adam answer that because he actually touched upon that in his remarks. Yeah, Adam, do you want to take this one?

Sure. The drop in gross margin doesn't actually reflect a change at the business level. It reflects a shift in the proportion of revenue coming from our services segment versus our like B2C digital product segment. Basically, the margin on a digital product is quite high. It's close to a 90% margin. Whereas our services segment is high for a services industry, it's like ranges from 50%-60%, depending on the business. Our current revenue reflects a larger percent of our revenue coming from our services segments than in Q1 last year, which had a larger percent of our revenue coming from the high-margin digital services segment. The margin change is really a reflection of a shift of proportion in revenue coming from services versus digital products.

As had been mentioned, we're also looking at scaling up advertising from our new more profitable base on the digital product side. We expect margin to creep up over the course of the year, both as we start to increase the proportion of sales in digital products and as our service agencies continue to see the benefits of implementing AI and, you know, margin expansion.

Got it. Thank you. May I ask a couple more?

Yeah, go ahead.

This one, I don't know how much you can tell me, but it was a little bit of a concern, so any color is helpful. You know, liquidated damages up in default of convertible notes in 2026 were around about $600-ish. You know, I'm not going to get into the note, but on the it's related to Eastern Standard note. There was also another that's getting kind of moved forward about $400. I was just trying to understand, you know, $600 there, $400 here, and that's another basically $1 million of kind of revenuesor whatever cash that's going away. How likely is this kind of thing to proceed moving forward, or do you think it's one-offs that hopefully won't repeat? I am just trying to get understanding of this, like one-off type of things that keep popping up.

Yeah, understood. The liquidated damages were one-off. The other question about the Eastern Standard note, which was really our intention when we first entered into the note in November, was to convert the remainder of the Eastern Standard seller note, which is about $800K, to common stock, rather than pay it off in September or October as originally intended and negotiated with them. After closing the transaction, that negotiation kind of changed, and it ended up saying, Actually, let's just go back to paying them off with cash in September, although the door is open to converting it instead.

Basically that part of the 8-K and the waiver was really just saying, Okay, this bit didn't get solved on the timeline we thought, so let's circle back to it in September. In terms of ongoing things, I think there are two things that have really caused a lot of these. The first one was really related to the actual when we entered into the note and a lot of those moving parts, and that's why we don't see that happening again. The other was a lot of the acquisitions we made in 2024, we used a heavy reliance on seller financing. The way we structured it was interest-only for two years or for 18 months or three years with a balloon payment at the end.

Whereas that's kind of what created the Eastern Standard note, and we had a RevenueZen note due at the end of this year and another one paid off at the end of last year. As we're targeting acquisitions now, we're going to avoid kind of creating this—I don't want to say time bomb, but you know, creating this thing where two years from now we have a balloon payment coming. That would either mean we pay more upfront cash or we make it so that the seller note amortizes and pays out over time rather than just interest only and then a big balloon. Kind of back to your question, do we think it will continue? It's not our intention, and we don't think it will be.

Sometimes the structure of a deal might have this element, and sometimes not. We're very mindful of not just continually creating these big cash payments obliged in the future.

Thank you. I just have a quick one. Is the current cash about the same? If you can share that, because I know we're running, it says kind of running low, $800-ish. Is it still the same, excluding the new equity?

We can't really share the finances beyond March 31st. Yeah, can't really comment on that. Obviously cash is something we're watching very carefully, and that's why the acquisitions are important too.

Thank you. Last one. You've been doing a little bit of restructuring and repositioning. Are you thinking that in Q1, this is gonna go into Q2 and Q3? How much more efficiency do you think you can add to lower expenses? Would love to get more color on that.

Yeah. I think I'll kind of start the answer, and then I'll pass it to Adam because he's more in the weeds than I am. Basically, I think the bulk of it was done at the end of Q4 and the beginning of Q1, really with Eastern Standard and RevenueZen, because they're our largest assets in that space. The smaller assets like DDSRank and Contentellect have an opportunity for us to improve the margins there and kind of just take the playbook from what we've done with the two bigger businesses and then map it across them. I think RevenueZen and Eastern Standard have room for improvement as well. I don't mean that in a negative way. I just think there's always room for further optimization.

Yeah, Adam, do you want to add anything there?

I mean, I think there's still room to eke out a single-point margin expansion across the services businesses over the course of the year. I do think that the bulk of the work in terms of integration and creating efficiency has been realized and that now, really, what the businesses need is sales volume. We've gotten to a point where they are comfortably able to fulfill and service their existing customer base, and we've added a ton of new capacity without adding new costs. What we'll really see as the year goes on is that we're going to continue to increase the number of customers we're serving at each business without needing to, you know, increase capacity, fulfillment, or overhead.

We'll see pretty significant, I think, margin expansion over the course of the year, but it's going to be a factor more of new sales coming in, you know, to a base that's been built to be very efficient, as opposed to finding increased efficiencies, you know, from existing revenue.

I understand. Okay. Greatly appreciate all the color, guys. Thank you.

Yeah, thanks. We appreciate the questions and are always happy to talk.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Wells for final comments.

Thank you, and thanks, everybody, for joining us today. We plan to host our next quarterly conference call to discuss Q2 results in mid-August. Have a great rest of your day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Good morning, and welcome to the Onfolio Holdings full year 2025 earnings conference call. Joining us today are Dominic Wells, Chief Executive Officer, and Adam Trainor, Chief Operating Officer and Interim Chief Financial Officer. Before we begin, I'd like to remind everyone that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied. Forward-looking statements are based on management's current expectations as of today's date, and the company undertakes no obligation to update or revise any such statements. For a detailed description of risks and uncertainties, please refer to the Risk Factors section of the company's most recent Form 10-K filed with the SEC.

Additionally, during this call, management may reference certain non-GAAP financial measures and supplemental operating metrics as indicators of performance. These measures should not be considered in isolation or as substitutes for GAAP results. A reconciliation of non-GAAP measures to the most comparable GAAP measures is available in the company's SEC filings, which can be found on the company's website at investors.onfolio.com/filings. With that, I'll turn the call over to Dom.

Thank you, and good morning, everyone. We appreciate you joining us for our first formal earnings call. For anyone newer to the Onfolio story, we are an owner/operator of cash-generating digital businesses, primarily in B2B marketing agencies and B2C online education. Since our IPO in 2022, we have grown revenues from approximately $2 million to $10.7 million in full year 2025, roughly a 5x increase, entirely through acquiring and operating real businesses that generate real cash flow. I want to spend a few minutes on what 2025 actually looked like before Adam walks through the numbers, because the GAAP figures alone do not tell the full story. Coming into 2025, we made a deliberate decision to pause acquisitions and focus on getting our existing portfolio to a point where it could fund parent company costs.

We had built a portfolio across 2023 and 2024, and the question was whether it was large and profitable enough to sustain itself and us. The honest answer is that we got close, but not quite there. Q3 was our strongest quarter. Portfolio level operating profit reached approximately $500,000 for the quarter, well ahead of where we started 2023. Although several of our businesses then faced headwinds in Q4, we still ended the year with full year portfolio operating profit of approximately $1.8 million, a significant increase versus roughly $600,000 in 2023. That improvement is real and meaningful, but it was not enough to fully close the gap between what the portfolio distributes and what it costs to run the parent company. I'll discuss what we're actively doing to close the gap later in the call.

First, I'd like to discuss notable progress across our two primary business segments, B2B and B2C. Within our B2B segment, 2025 was our first full year owning Eastern Standard, our largest business. Eastern Standard grew revenues approximately 10% year-over-year, built up its cash reserves, and began distributing meaningfully to the parent company in the second half of the year. That is exactly what we acquired it to do. Toward the end of 2025, we began treating our agencies as a unified platform, creating centralized backend fulfillment, shared sales and marketing infrastructure, and clearer accountability across the portfolio. We are calling this our Agency Co-structure internally. We believe it makes our agency businesses more durable and positions them for the changes AI is bringing to agency work. Clients are increasingly expecting more value at lower costs, and agencies that adapt will thrive.

In our B2C segment, Proofread Anywhere had a mixed year. We started the year strong. However, by the second half of 2025, we identified that our advertising spend was generating diminishing returns, so we deliberately pulled back to preserve profitability at the business level. That decision compressed revenue significantly, but we believe it was the right call. Q1 2026 has shown early improvement as we have carefully redeployed ad spend with normalized unit economics, and it remains a solid cash-generative business. The platform has been evolving from a single course-based model toward a broader freelancing education platform, which we believe positions it for stronger long-term monetization. Additionally, Vital Reaction continued to generate consistent cash flow throughout 2025. We have also been finding opportunities to consolidate media buying and ad creative across both B2C businesses.

AI tools are now good enough to improve the quality and efficiency of our media buying in ways that were not possible a year ago. We expect this to be a meaningful lever in 2026. In November 2025, we secured a $300 million convertible note facility with a U.S.-based institutional investor. To date, we have drawn approximately $6 million under this facility. We entered into it with five primary objectives. First, to provide access to long-term capital and strengthen our balance sheet. Second, to extend our operational runway and position us to acquire larger cash flowing businesses. Third, to retire some of our existing higher cost debt. Fourth, to improve capabilities within our current portfolio, specifically in lead generation and sales execution.

Fifth, to deploy a portion of proceeds into digital assets to diversify our balance sheet and generate staking rewards. Adam will cover the balance sheet detail. From a strategic standpoint, this facility has meaningfully changed how we can approach acquisitions, both in terms of deal size and speed of execution. I'll now turn over the call to Adam to walk through our financial results for the full year 2025, and then I'll return with more context on our go-forward strategy. Over to you, Adam.

Thanks, Dom. Good morning, everyone. Unless otherwise noted, all comparisons are full year 2025 versus full year 2024. Total revenue for full year 2025 was $10.7 million, an increase of 36% from $7.9 million in 2024. Revenue from services, our B2B segment, increased 62% to $7.4 million from $4.7 million in 2024. That growth was driven primarily by the full year contribution of Eastern Standard, which we acquired in Q4 2024 and contributed approximately $3.3 million in 2025 revenue, as well as a contribution of approximately $91,000 from ddsrank.com.

Revenue from product sales, our B2C segment, increased 5% to $3.3 million from $3.2 million in 2024, reflecting the growth we're getting from the platform dynamics Dom described, partially offset by the absence of WP Folio revenue following its sale in Q4 2024. Gross profit was $6.4 million, representing gross margin of approximately 60%, up from 58% in 2024. This improvement reflects the increasing weight of our service-based B2B revenues. As our agencies become more operationally efficient and service revenues represent a larger share of our mix, we expect gross margin to trend into the mid-60% range over the course of 2026. Total operating expenses were $9.3 million, compared to $7.1 million in 2024. The increase reflects the full year inclusion of Eastern Standard and SG&A costs.

We incurred professional fees of approximately $1.2 million, which included approximately $175,000 in one-time costs, primarily expenses related to the required re-audit of our 2023 financials and the Eastern Standard historical audits, neither of which we expect to recur at the same level in 2026. We recorded impairment charges of approximately $440,000 related to allthingsdogs.com and ddsrank.com. Both businesses remain operational. Net loss for the full year 2025 was $2.6 million. That figure includes $2.4 million in non-cash expenses, a $1.1 million non-cash gain on the change in fair value of derivative liabilities, and a $229,000 non-cash loss on the change in fair value in our digital asset holdings.

Excluding those non-cash expenses, our operating loss improved from $1.42 million in 2024 to just $880,000 in 2025, a 38% improvement year-over-year. Our EBITDA, as defined for 2025, was +$151,000, compared to-$588,000 in 2024. A full reconciliation of this non-GAAP measure is included in our 10-K filed with the SEC. To frame the portfolio-level picture that Dom referenced, when you isolate our portfolio businesses from parent company overhead, portfolio operating profit grew from approximately $600,000 annually in 2023 to approximately $1.8 million annually by the end of 2025.

That underlying improvement is not fully visible in the consolidated GAAP figures, but it is the metric that most directly reflects the health and trajectory of our businesses. As of December 31st 2025, we had cash of $2.17 million, compared to $477,000 at the end of 2024. That improvement reflects proceeds from our convertible note facility, partially offset by approximately $500,000 in legacy debt retired during the year and ongoing operating costs. Our digital asset holdings had a total fair value of approximately $2.3 million as of year-end, consisting of 5.32 BTC, 318.33 ETH, of which approximately 288 are staked, and 6,786 SOL, all of which are staked.

These holdings generate staking rewards, and we view them as a long-term balance sheet asset rather than a trading position. On debt, total outstanding indebtedness was approximately $7.8 million across several instruments, detailed in Note 11 of our 10-K. The largest component is the $6 million drawn under our senior secured convertible note facility, maturing November 2027. Our remaining obligations are primarily acquisition-related seller notes. $850,000 related to Eastern Standard, maturing October 2026, $303,000 related to the RevenueZen earn-out, and $200,000 related to DDS Rank, maturing June 2026. The retirement of approximately $500,000 in legacy debt in 2025, primarily higher cost seller notes from prior acquisitions, results in approximately $150,000 in annual savings on interest payments going forward.

While total liabilities increased with the convertible note facility, the retirement of these legacy obligations meaningfully improves our recurring cash burn profile. On our Series A Preferred Stock, 170,460 shares are outstanding, carrying a 12% cumulative annual dividend payable quarterly. Accrued but unpaid preferred dividends were approximately $122,000 as of year-end. Those accrued and unpaid dividends were paid the first week in January. The Board retains discretion over dividend declarations. With that, I hand it back to Dom.

Thank you, Adam. Our priorities for 2026 are clear. Generate more cash flow from the existing portfolio, resume acquisitions that immediately add to that cash flow, and close the gap between what the portfolio distributes and what it costs to run the parent company. When those two numbers cross, we are self-funding. That is the goal. Portfolio operating profit grew from roughly $600,000 annually in 2023 to $1.8 million annually in 2025. Parent company overhead has come down approximately 35% from its mid-2023 peak. We are closing the gap from both directions simultaneously, and we are pulling three levers to get there. First, disciplined cost management at the parent level. Non-recurring expenses from 2025, including approximately $175,000 in re-audit costs, will not repeat.

The retirement of legacy debt saves approximately $150,000 annually in interest. Our recurring parent company cost base entering 2026 is materially lower. Second, improving cash generation across the portfolio. The centralized Agency Co sales and marketing initiative is designed to drive meaningful revenue growth across the agency platform. We believe a 10% increase in agency revenue gets us close to the profitability threshold. A 20% increase gets us there. A 30%, we're comfortably past it, assuming continued stability in our B2C segment and ongoing overhead discipline. Third, selective acquisitions that add immediate cash flow. One or two properly sized acquisitions could close the gap to self-funding more meaningfully than organic levers alone. Our B2B segment currently consists of six agencies: Eastern Standard, RevenueZen, SEO Butler, Pace Generative, Contentellect, and DDS Rank.

We are consolidating these into the Agency Co-structure with centralized sales and marketing. Previously, each agency managed its own business development. A centralized approach will produce better results, better accountability, better resource allocation, and better conversion across the platform. A key part of that is how AI is changing what agencies can deliver. We are already using AI tools to drive efficiency and fulfillment across the portfolio. Agencies that lean into this shift will be able to deliver more value at lower cost, which is exactly what clients are asking for. In our B2C segment, we are focused on improving the profitability of what we already own rather than adding complexity. For Proofread Anywhere, Q1 2026 is tracking ahead of Q4 2025 as ad spend has been carefully redeployed.

For Vital Reaction, we are finding real opportunities to consolidate media buying, ad creative, and email marketing with Proofread Anywhere, reducing costs while maintaining reach. After pausing acquisitions through 2025, we are actively back in the market. The financing facility has changed our position meaningfully. Deal flow has increased in both size and quality since our November announcement. We are now evaluating businesses with characteristics that were previously out of reach, stronger management teams, lower revenue concentration risk, and more predictable recurring revenue. Our pipeline today represents approximately $5 million in potential acquired EBITDA, which at our current portfolio margins would represent a meaningful step forward toward self-funding at the parent level. We may not pursue all of them, but the caliber of what we are seeing is meaningfully different from where we were a year ago.

Our ideal acquisition at this stage, consistent cash flow that distributes to the parent immediately, no integration complexity that pulls focus from existing operations, and financing that does not meaningfully increase our interest burden. To summarize, our plan is straightforward. Control costs, grow portfolio cash flow, and acquire additional profitable businesses. 2025 was the year we built the operational foundation. 2026 is the year we intend to demonstrate that the platform can fund itself. Our liabilities are lower than a year ago on a recurring basis. Our balance sheet is stronger, and our agency portfolio is better structured than it has ever been. I'm confident in our team and in the direction we are headed. With that, I will hand it back to the operator for questions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from the line of Yegor Zhetarozny, private investor. Please proceed with your question.

Good morning, Dom, Adam. Congratulations, guys, on doing the earnings call. It's nice to hear both of you. I'm happy with the, you know, progress, but there's a few things that stood out that I think some of us would like to know. We're currently in default pursuant to senior secured note and registration rights. My question, what exactly is the current state on negotiation with note holders? What's the remedies as of today? What is the worst-case scenario regarding the potential dilution? Can you discuss a little more about this?

Yeah. I mean, we're still in negotiations, so I think we have to be limited with what we say. Can't really say anything that is not public. When negotiations are finished and any waiver gets signed, we'll file an 8-K, so people can look out for that. I think the potential impact on dilution would be a slightly larger discount to the VWAP calculation on dilution. Instead of, say, 97% it would be 85%. Yeah, as I said, we'll give an update on that in due course via an 8-K.

All right. If I may, I have a few more. Can we expect in the near future another acquisition similar to Eastern Standard? It seems like that's the one that kind of really bumped up things and makes acceleration. Is this something you're looking for? A similar one like Eastern Standard or something a little smaller, something a little bigger? I know you're kind of looking at the things, just trying to get the feel for, you know, potential acquisitions.

Yeah. I guess, are you referring to the size of the business when you say similarity?

Yeah.

Yeah. I think that is the ideal size. We'll consider something smaller if it makes sense, if it doesn't have integration risk. With the smaller businesses, there's kind of an opportunity cost where the team has to focus on integrating it. Maybe we have to hire someone to run the business, and at a certain size, it's kinda not worth it. There are smaller businesses out there where the founder would be coming with the business or it fits in well with something we already have. Certainly I agree with you. Eastern Standard was the one that made a big difference in our financial performance. Looking for something of similar size. It might not necessarily be a marketing agency, but yeah, that kind of size would be what we're targeting right now.

If I may, this kind of they're similar, but would like to get answer on both. Am I correct to assume that, consolidating all the five B2B agencies, including Eastern Standard, which I believe was partially the reason for increase in SG&A and other expenses in 2025, that there's potential synergies for cost savings and, potential lower expenses, which would, if we strip them out versus 2024, it actually would be like, lower, so we're making, decent progress on being on net loss.

Yeah, that's the idea. Just making sure I understand the question. Yeah, the idea with consolidating the agencies is not just for cost saving, it's also for focus and being able to improve the sales efforts and the growth and everything. I think we're really seeing two things right now, is there is a lot of overlap within those companies, and some of the smaller agencies also have really suffered from a lack of strong leadership. The Eastern Standard team, not only did they contribute a large business, but they also brought three high-level leaders. By getting involved with the wider portfolio, they're really helping out there as well.

Then on the cost-saving front, not only by integrating the teams together can we save costs, but we talked about this in a press release, I think last week or the week before, but there's a lot of opportunity using AI to save costs right now. People have been talking about that for probably two years, but I think over the last three months, everything's actually finally arrived, and it gives the opportunity to further save costs.

I was more referring to if we strip out all the non-cash items that were the reason for, you know, the net loss in 2025 was larger than in 2024. If we strip out all the non-cash items, the net loss was actually a bit better versus the last year.

Oh, yeah. Yeah. I think, yeah, that's right. The net loss improved year-over-year when you take out all of the non-cash stuff. I don't know if you saw the earnings release that we put out shortly after the 8-K, but we spell it out a bit better in that as well.

Thank you. If I may, the last one. This one is. I see you guys have initiated a lot of different ventures within the last year or so. We got the Pace, Parlance, DealPipe. I was wondering, how much time, effort, money does this kind of initiative take or require, or do they just come naturally as you grow, progress?

It actually depends on what it is we launched. Parlance, which we launched about a week ago, very little time, couple of hours, to put everything together and launch it. I think Pace was more of a collaborative effort, kind of like a sprint where the whole team pulled together to get it launched in a couple of weeks. DealPipe was more like a joint venture, so that one was not that much time. In terms of cost, we really only launch a business if we think it's gonna be better than buying one. That doesn't just refer to the financials, it refers to the opportunity costs and the focus. Yeah, we're always mindful of launching something that's just gonna be a big distraction.

At the moment, I think there's a lot of opportunity to launch things cheaply and quickly, but that's not always been the case historically.

Awesome. Thank you so much for the questions and congrats, guys.

Yeah, thank you. Thanks for coming on and asking.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Wells for final comments.

Thank you. Thank you all for joining us this morning. We plan to host our next quarterly call to discuss Q1 2026 results in mid-May. We appreciate your continued support and look forward to updating you on our progress.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.