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

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

WILMINGTON, Del., Nov. 14, 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 third quarter ended September 30, 2023.

Financial Highlights

  • Third quarter 2023 revenue grew 273% year-over-year to $1.31 million compared to $0.35 million in the third quarter of 2022
  • Third quarter 2023 gross profit grew 526% to $0.85 million (representing gross margin of 64.5%) vs. $0.14 million in the prior year period (representing gross margin of 38.4%)
  • Third quarter 2023 total operating expenses increased 397% to $5.59 million (including approximately $3.8 million in impairment charges related to intangible assets) vs. $1.12 million in the prior year period
  • Third quarter 2023 net loss to common shareholders expanded to $4.79 million vs. $1.31 million net loss in the prior year period
  • Cash at September 30, 2023 was $3.38 million vs. $6.70 million at December 31, 2022

“The third quarter was marked by sequentially flat revenue and operating expenses that were nearly $300,000 lower than in the second quarter, excluding the impairment charge of intangible assets recognized in the third quarter. Our business model assumes that our success lies in buying stable online businesses and growing them organically over time while demonstrating operating leverage and keeping operating expenses in check,” commented Onfolio CEO Dominic Wells. “Despite a few one-time items impacting prior quarter results and the impairment charge this quarter, we believe our ability to manage operating expenses is apparent. To this end, we recently announced additional cost-savings initiatives that should show results beginning in the fourth quarter. We are committed to becoming profitable, and managing expenses is an important component of that process.

“Of course, another key component of our corporate strategy is growing organically as well as through acquisitions of sustainable online businesses. We have a number of corporate initiatives under way that should help us deliver organic growth, including the roll out of some AI tools that can help a number of our portfolio companies.

“On the acquisition front, we recently announced the raise of over $1 million through the sale of preferred shares and promissory notes. We continue to seek additional funds under the preferred share program and are also exploring other avenues to raise non-dilutive capital. I want to emphasize the funds we are seeking are considered growth capital and will be used to make product or business acquisitions, not to meet payroll or the like. We see a number of opportunities in the market and are optimistic about having news to share on this front in the near future,” 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 in Item 1.A "Risk Factors" in our most recent Form 10-K 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:
[email protected]

Onfolio Holdings, Inc.
Consolidated Balance Sheets
 September 30 December 31
  2023   2022 
Current Assets:   
Cash and cash equivalents$3,373,178  $6,701,122 
Accounts receivable, net 97,522   137,598 
Inventory 114,492   105,129 
Prepaids and other current assets 121,557   212,180 
Total Current Assets 3,706,749   7,156,029 
Intangible assets 3,280,243   3,864,618 
Goodwill 1,165,636   4,209,126 
Due from related party 156,952   111,720 
Investment in unconsolidated joint ventures, cost method 154,007   154,007 
Investment in unconsolidated joint ventures, equity method 274,774   280,326 
Total Assets$8,738,361  $15,775,826 
Liabilities and Stockholder’s Equity   
Current Liabilities:   
Accounts payable and other current liabilities$431,189  $550,454 
Dividends payable 49,341   54,404 
Acquisition notes payable 2,416,323   2,456,323 
Notes payable -   68,959 
Contingent consideration 60,000   60,000 
Deferred revenue 228,960   113,251 
Total Current Liabilities 3,185,813   3,303,391 
Total Liabilities 3,185,813   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 September 30, 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 September 30, 2023 and December 31, 2022; 5,110   5,110 
Additional paid-in capital 20,520,807   19,950,774 
Accumulated other comprehensive income 73,910   96,971 
Accumulated deficit (15,047,349)  (7,580,490)
Total Stockholders' Equity 5,552,548   12,472,435 
Total Liabilities and Stockholders' Equity$8,738,361  $15,775,826 

Onfolio Holdings, Inc.
Consolidated Statements of Operations
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
   2023   2022   2023   2022 
Revenue, services $433,490  $59,032  $1,121,641  $245,162 
Revenue, product sales  879,821   293,268   2,853,447   850,883 
Total Revenue  1,313,311   352,300   3,975,088   1,096,046 
Cost of revenue, services  218,063   100,961   651,849   284,716 
Cost of revenue, product sales  247,533   115,883   916,740   365,010 
Total cost of revenue  465,596   216,844   1,568,589   649,726 
Gross profit  847,715   135,457   2,406,499   446,320 
Operating expenses        
Selling, general and administrative  1,532,152   974,998   4,724,357   2,744,751 
Professional fees  216,082   148,649   843,910   417,032 
Impairment of intangible assets  3,762,579   -   3,952,516   - 
Acquisition costs  77,525   -   285,532   240,468 
Total operating expenses  5,588,338   1,123,647   9,806,315   3,402,251 
Loss from operations  (4,740,623)  (988,190)  (7,399,816)  (2,955,931)
Other income (expense)        
Equity method income  2,826   9,568   14,921   26,056 
Dividend income  94   574   1,610   2,292 
Interest income (expense), net  10,231   (2,739)  68,989   (3,995)
Other income  (5,687)  11,091   2,937   12,445 
Impairment of investments  -   -   -   (29,557)
Loss on sale of asset  -   -   -   (34,306)
Total other income   7,464   18,494   88,457   (27,065)
Loss before income taxes  (4,733,159)  (969,696)  (7,311,359)  (2,982,996)
Income tax (provision) benefit  -   -   -   - 
Net loss  (4,733,159)  (969,696)  (7,311,359)  (2,982,996)
Preferred Dividends  (54,231)  -   (155,500)  (88,848)
Net loss to common shareholders $(4,787.390) $(1,310,262) $(7,466,859) $(3,071,844)
Net loss per common shareholder        
  Basic and diluted $(0.94) $(0.30) $(1.46) $(1.15)
Weighted average shares outstanding        
  Basic and diluted  5,110,195   3,284,339   5,110,195   2,675,634 

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2023 and 2022
  2023   2022 
Cash Flows from Operating Activities   
Net loss$(7,311,359) $(2,982,996)
Adjustments to reconcile net loss to net cash provided by operating activities:   
   Stock-based compensation expense 570,033   701,551 
   Equity method income (14,921)  (26,056)
   Dividends received from equity method investment 20,473   23,915 
   Loss on sale of asset -   34,306 
Amortization of intangible assets 549,914   - 
Impairment of intangible assets 3,952,516   - 
Net change in:   
  Accounts receivable 40,076   (4,491)
  Inventory (9,363)  4,058 
    Prepaids and other current assets 90,623   (120,214)
    Accounts payable and other current liabilities (119,265)  39,163 
    Due to joint ventures (45,232)  (26,561)
    Deferred revenue 115,709   (21,802)
    Due to related parties -   (480)
Net cash used in operating activities (2,160,796)  (2,373,607)
Cash Flows from Investing Activities   
Proceeds from sale of intangible assets -   45,694 
Cash paid to acquire business (850,000)  - 
Investments in joint ventures -   (22,500)
Net cash used in investing activities (850,000)  23,194 
Cash Flows from Financing Activities   
Proceeds from sale of Series A preferred stock -   321,500 
Proceeds from sale of common stock   12,255,470 
Payments of preferred dividends (160,563)  (91,264)
Payment of contribution to joint venture note payable -   (215,000)
Payments on acquisition note payable (40,000)  - 
Proceeds from notes payable -   44,000 
Payments on note payables (68,959)  (59,228)
Net cash provided by financing activities (269,522)  12,255,478 
Effect of foreign currency translation (47,626)  - 
Net Change in Cash (3,327,944)  9,905,065 
Cash, Beginning of Period 6,701,122   1,710,318 
Cash, End of Period$3,373,178  $11,615,383 
Cash Paid For:   
  Income Taxes$-  $- 
  Interest$61,141  $5,493