Onfolio Holdings Inc. Announces First Quarter 2023 Financial Results and Provides Corporate Update

Onfolio Holdings Inc. Announces First Quarter 2023 Financial Results and Provides Corporate Update

WILMINGTON, Del., May 15, 2023 (GLOBE NEWSWIRE) -- Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW) (“Onfolio” or the “Company”), a holding company that acquires and manages a diversified portfolio of online businesses across a broad range of verticals, announces financial results for the first quarter of 2023. 

Recent Corporate Highlights

  • Completed the acquisition of Contentellect, a provider of software that allows small and midsize businesses to scale their content with blog writing and link building, in February 2023
  • Appointed:
    • Ravi Jayagopal as CEO of WPFolio, a WordPress plugin development company
    • Tanya Vaughn as CEO of Proofread Anywhere, an online provider of resources for those looking to become professional proofreaders

First Quarter 2023 Financial Highlights

  • First quarter 2023 revenue grew 250% year-over-year to $1.35 million vs. $0.39 million in the first quarter of 2022
  • First quarter 2023 gross profit grew 361% to $0.74 million (representing gross margin of 55.0%) vs. $0.16 million in the prior year period (representing gross margin of 41.8%)
  • First quarter 2023 total operating expenses increased 128% to $2.09 million vs. $0.92 million in the prior year period
  • First quarter 2023 net loss to common shareholders expanded to $1.34 million vs. $0.79 million in the prior year period
  • Cash at 3/31/23 was $4.66 million vs. $6.70 million at 12/31/22

“In the first quarter of 2023, we continued to integrate our three acquisitions from October 2022 – BWPS, Proofread Anywhere, and SEOButler Ltd – and continued with our Onfolio 2.0 strategy with the additional acquisition and early integration of Contentellect,” commented Onfolio CEO, Dominic Wells.  “Collectively, these acquisitions bring several favorable attributes that should help build a stronger foundation for the Company.  As previously announced, we are deliberately moving away from smaller content websites and towards more service businesses, agencies, online education, and digital products that are less subject to changes in the Google search ranking algorithm.  These businesses also bring higher revenues and a higher recurring revenue stream than many of our previous Onfolio 1.0 acquisitions and managed websites. 

“Combined with our decision last fall to decentralize our organizational structure, we believe we are in a much stronger position to grow sustainably over the coming years, especially as we are always evaluating additional acquisitions that could accelerate our path to profitability.  The recent appointments of Ravi Jayagopal as CEO of WPFolio and Tanya Vaughn as CEO of Proofread Anywhere should help us optimize these two subsidiaries that were acquired last October and are at the heart of our decentralization strategy. 

“Total revenue in the first quarter of 2023 of $1.35 million grew approximately 20% sequentially, and we recognized sequentially higher revenue each month since December, culminating in March representing our highest monthly revenue total ever, thanks to primarily the four acquisitions we have made since our IPO.  We recognized approximately $300,000 in expenses, such as acquisitions costs related to our fourth quarter 2022 acquisitions, higher than normal legal and professional fees, including some tied to our IPO, and one-time growth expenses for newly acquired businesses, in the first quarter that are not expected to recur moving forward.  It is also worth noting that, beginning with the start of 2023, some expenses that were previously classified as SG&A expenses are now considered part of cost of goods sold.

“Cost advantages from our decentralization efforts at the corporate level, along with general costs control efforts, are beginning to show positive results.  Moreover, we expect lower expenses throughout the remainder of 2023 and, along with expected increasing revenue, improving operating leverage.  Ultimately, we anticipate further acquisitions will bring us to profitability,” concluded Mr. Wells.

About Onfolio Holdings

Onfolio acquires and manages a diversified portfolio of online businesses across a broad range of verticals, each with a niche content focus and brand identity. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio’s experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.

Forward-Looking Statements

The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continues,” “estimates,” “projects,” “intends,” and similar expressions. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as revenue growth and earnings, and strategy for growth and financial results.  Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us under the caption “Risk Factors” included in our SEC filings and other risks to which our Company is subject, and various other factors beyond the Company’s control. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

For investor inquiries:
CORE IR
[email protected]
516-222-2560

Note: Financial Statements to follow:

Onfolio Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
 March 31
 December 31
 2023
 2022
Assets     
      
Current Assets:     
Cash4,663,522  6,701,122 
Accounts receivable, net114,962  137,598 
Inventory90,301  105,129 
Prepaids and other current assets241,455  212,180 
Total Current Assets5,110,240  7,156,029 
      
Intangible assets4,556,071  3,864,618 
Goodwill4,219,501  4,209,126 
Due from related party127,854  111,720 
Investment in unconsolidated joint ventures, cost method154,007  154,007 
Investment in unconsolidated joint ventures, equity method278,837  280,326 
      
Total Assets$14,446,510  $15,775,826 
      
Liabilities and Stockholders Equity     
      
Current Liabilities:     
Accounts payable and other current liabilities$342,678  $550,454 
Dividends payable30,435  54,404 
Acquisition notes payable2,416,323  2,456,323 
Notes payable48,627  68,959 
Due to related parties-  - 
Contingent consideration60,000  60,000 
Deferred revenue185,238  113,251 
Total Current Liabilities3,083,301  3,303,391 
      
Due to joint ventures - long term-  - 
Total Liabilities3,083,301  3,303,391 
      
Commitments and Contingencies     
      
Stockholders' Equity:     
Preferred stock, $0.001 per value, 5,000,000 shares authorized     
Series A Preferred stock, $0.001 par value, 1,000,000 shares authorized,  69,660 issued and outstanding at March 31, 2023 and December 31, 2022;70  70 
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,110,195 issued and outstanding at March 31, 2023 and December 31, 2022;5,110  5,110 
Additional paid-in capital20,184,129  19,950,774 
Accumulated other comprehensive income89,490  96,971 
Accumulated deficit(8,915,590) (7,580,490)
Total Stockholders' Equity11,363,209  12,472,435 
      
Total Liabilities and Stockholders' Equity$14,446,510  $15,775,826 


Onfolio Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
      
 For the Three Months Ended March 31,
 2023
 2022
      
Revenue, services$392,401  $117,987 
Revenue, product sales959,333  267,936 
Total Revenue1,351,734  385,923 
      
Cost of revenue, services273,313  128,339 
Cost of revenue, product sales335,208  96,431 
Total cost of revenue608,521  224,770 
      
Gross profit743,213  161,153 
      
Operating expenses     
Selling, general and administrative1,696,380  797,490 
Professional fees247,385  43,432 
Acquisition costs150,614  77,161 
Total operating expenses2,094,379  918,083 
      
Loss from operations(1,351,166) (756,930)
      
Other income (expense)     
Equity method income6,888  10,179 
Dividend income1,269  385 
Interest income (expense), net56,132  (2,400)
Other income2,802  - 
Impairment of investments-  - 
Loss on sale of asset-  - 
Total other income67,091  8,164 
      
Loss before income taxes(1,284,075) (748,766)
      
Income tax (provision) benefit-  - 
      
Net loss(1,284,075) (748,766)
      
Preferred Dividends(51,025) (43,120)
Net loss to common shareholders$(1,335,100) $(791,886)
      
Net loss per common shareholder     
Basic and diluted$(0.26) $(0.34)
      
Weighted average shares outstanding     
Basic and diluted5,110,196  2,354,049 

 

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
      
 2023
 2022
Cash Flows from Operating Activities     
Net loss$(1,284,075) $(748,766)
Adjustments to reconcile net loss to net cash provided by operating activities:     
Deferred tax expense (benefit)-  - 
Stock-based compensation expense233,355  219,660 
Equity method income(6,888) (10,179)
Dividends received from equity method investment8,377  7,426 
Impairment of Cost method investment-  - 
Loss on sale of asset-  - 
Amortization of intangible assets170,996  - 
Net change in:     
Accounts receivable22,636  (14,782)
Inventory14,828  1,328 
Prepaids and other current assets(29,275) (18,767)
Accounts payable and other current liabilities(207,776) 39,262 
Due to joint ventures(16,134) (33,142)
Deferred revenue71,987  15,980 
Due to related parties-  (480)
      
Net cash used in operating activities(1,021,969) (542,460)
      
Cash Flows from Investing Activities     
Proceeds from sale of intangible assets-  - 
Purchase of intangible assets-  - 
Cash paid to acquire businesses(850,000) - 
Advances to related parties-  - 
Investments in joint ventures-  (22,500)
Net cash used in investing activities(850,000) (22,500)
      
Cash Flows from Financing Activities     
Proceeds from sale of common stock-  - 
Proceeds from sale of Series A preferred stock-  130,000 
Payments of preferred dividends(74,994) (2,968)
Payment of contribution to joint venture note payable-  (20,000)
Payments on acquisition note payable(40,000) - 
Proceeds from notes payable-  - 
Payments on note payables(20,332) (21,855)
      
Net cash provided by financing activities(135,326) 85,177 
      
Effect of foreign currency translation(30,305) - 
      
Net Change in Cash(2,037,600.00) (479,783)
Cash, Beginning of  Period6,701,122.00  1,710,318 
      
Cash, End of Period4,663,522.00  $1,230,535 
      
Cash Paid For:     
Income Taxes$-  $- 
Interest$18,836  $2,400