Onfolio Holdings, Inc. Q4 FY2025 earnings call

• Paused acquisitions in 2025 to focus on existing portfolio. - In B2B, started treating agencies as a unified platform with centralized backend fulfillment, shared sales and marketing infrastructure, called agency co-structure. - In B2C, Proofread Anywhere cut ad spend in second half 2025, Vital Reaction had consistent cash flow, and opportunities to consolidate media buying and ad creative with AI tools. - Secured $300 million convertible note facility with objectives like providing long-term capital, extending operational runway, retiring debt, improving portfolio capabilities, and deploying proceeds into digital assets. - Priorities for 2026: generate more cash flow from existing portfolio, resume acquisitions adding cash flow, close gap between portfolio distribution and parent company costs by cost management, improving portfolio cash generation, and selective acquisitions.

B2B segment: 2025 was the first full year owning Eastern Standard, its largest business. Eastern Standard grew revenues approximately 10% year over year, built up cash reserves and began distributing meaningfully to the parent company in the second half of the year. B2C segment: Proofread Anywhere had a mixed year, with advertising spend cut back in the second half of 2025 due to diminishing returns, but Q1 2026 showed early improvement; Vital Reaction continued to generate consistent cash flow throughout 2025, and there were opportunities to consolidate media buying and ad creative across both B2C businesses.

• Priorities for 2026 include disciplined cost management at parent level, improving cash generation across portfolio via centralized agency co-sales and marketing, and selective acquisitions that add immediate cash flow. - Believes 10% increase in agency revenue gets close to profitability threshold, 20% gets there, 30% past it assuming stability in B2C and overhead discipline. - Actively back in market for acquisitions after pausing in 2025, with financing facility changing position, evaluating businesses with certain characteristics.

• Currently in negotiations regarding senior security note and registration rights, potential impact on dilution with possible larger discount to VWAP calculation on dilution.

Q: About current state on negotiation with note holders, remedies, worst case scenario regarding potential dilution.

A: Still in negotiations, will file 8K when finished, potential impact on dilution is slightly larger discount to VWAP calculation, maybe 85% instead of 97%.

Q: Can we expect near future acquisition similar to Eastern Standard?

A: Looking for something of similar size, might not necessarily be marketing agency.

Q: Consolidating B2B agencies for cost savings and lower expenses?

A: Idea is not just cost saving, but also focus, sales efforts, growth, overlap in companies, smaller agencies lacking leadership, Eastern Standard team bringing leaders, and AI for cost savings.

Q: Time, effort, money for initiatives like Parlance, Pace, Dealpipe?

A: Depends on initiative, Parlance launched in hours, Pace collaborative effort in weeks, Dealpipe joint venture, only launch if better than buying in terms of financials, opportunity costs, focus.