Onfolio Holdings Inc. reported a steep decline in revenue and a widened net loss for the second quarter of 2026, reflecting ongoing challenges in its operating segments.
Total revenue for Q2 2026 dropped 52% year-over-year to $1.5 million, down from $3.15 million in the same period last year. The decline followed a 20% sequential decrease from $1.87 million in Q1 2026. B2B services revenue, which accounted for 81% of total revenue, fell 41% to $1.22 million, while B2C product revenue plummeted 74% to $279,000, representing just 19% of total revenue compared with 35% in Q2 2025.
Gross profit totaled $732,000, yielding a gross margin of approximately 49%, essentially flat from Q1 2026. Operating loss expanded to $966,000 from $507,000 in Q2 2025, while net loss surged to $4.6 million, up from $534,000 a year earlier and $2.6 million in Q1 2026. The net loss included a $2.95 million non-cash loss on derivative liability, a $281,000 non-cash loss on digital assets, and $336,000 in higher interest expense.
Total operating expenses decreased 31% year-over-year to $1.7 million, driven by a 45% reduction in SG&A expenses, primarily due to lower advertising spend and reduced compensation and G&A costs. Professional fees rose 60% to $209,000, attributed to legal, audit, and Nasdaq compliance expenses.
Cash and cash equivalents stood at $251,000 as of June 30, 2026, down from $842,000 at the end of Q1 2026 and $2.17 million at year-end 2025. Shareholders' equity turned negative by $3.11 million at quarter-end, though management noted this was resolved after post-quarter note conversions.
The B2B segment reported an operating loss of $103,000, compared with operating income of $70,000 in Q2 2025, as new sales at Eastern Standard slowed amid AI-related disruptions. The B2C segment generated operating income of $43,000, down from $150,000 a year earlier, as Proofread Anywhere revenue declined following reduced advertising spend to preserve unit economics.
Shares initially rose 10.21% to $2.59 on Aug. 13 following the earnings release but fell sharply in premarket trading on Aug. 20 to $1.58, a 33.33% drop from the prior close. The stock has declined 95% over the past year and 92% over the last six months, after reaching a 52-week high of $123.915.
Management completed a 1-for-50 reverse stock split on Aug. 10 to comply with Nasdaq’s $1 minimum bid price requirement, reducing outstanding shares from roughly 42 million to 850,000. As of Aug. 18, shares outstanding totaled approximately 2.45 million following note conversions. Senior secured convertible notes were fully settled via conversion into equity after quarter-end.
Onfolio is targeting a $4 million trailing 12-month adjusted EBITDA acquisition to close by Oct. 1, 2026, structured as 100% seller-financed, alongside additional deals exceeding $1 million in EBITDA and two early-stage opportunities.
