Onfolio Holdings Inc. Announces Second Quarter 2023 Financial Results and Provides Corporate Update
WILMINGTON, Del., Aug. 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 second quarter ended June 30, 2023.
Second Quarter 2023 Financial Highlights
- Second quarter 2023 revenue grew 266% year-over-year to $1.31 million compared to $0.36 million in the second quarter of 2022
- Second quarter 2023 gross profit grew 445% to $0.82 million (representing gross margin of 62.3%) vs. $0.15 million in the prior year period (representing gross margin of 41.8%)
- Second quarter 2023 total operating expenses increased 56% to $2.12 million vs. $1.36 million in the prior year period
- Second quarter 2023 net loss to common shareholders expanded to $1.29 million vs. net $1.26 million net loss in the prior year period
- Cash at June 30, 2023 was $4.05 million vs. $6.70 million at December 31, 2022
“We made significant progress in reducing our sequential cash burn in the second quarter by 35%, as cash burn improved from approximately $940,000 in the first quarter, excluding one-time costs related to the Contentellect acquisition, to approximately $600,000 in the second quarter,” commented Onfolio CEO Dominic Wells. “There were cross-trends in some line items on the income statement that may mask this trend, along with a $189,000 impairment charge for a write-down in some of our smaller assets, but this is the main takeaway from our second quarter financial performance. This is consistent with comments from the first quarter regarding some one-time items and carryover expenses from 2022 being absent in subsequent quarters.
“Revenue stabilized sequentially and was rather flat, but we believe some of the AI tools we are developing will be incremental to our revenue base. Additionally, we believe previously announced new leadership at WPFolio and Proofread Anywhere will help us optimize revenue performance from these cornerstone acquisitions last fall.
“We continue to explore options for growth capital to make additional acquisitions. Meanwhile, we will continue to focus on reducing our cash burn and optimizing our organic revenue opportunities. We also continue to develop AI tools that we believe could have a significant impact on business development opportunities as well as help us further optimize our revenue opportunities and effectively manage expenses,” 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: |
| CORE IR |
| investors@onfolio.com |
| 516-222-2560 |
| Onfolio Holdings, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| June 30 2023 | December 31 2022 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | 4,052,355 | 6,701,122 | ||||||
| Accounts receivable, net | 106,357 | 137,598 | ||||||
| Inventory | 117,983 | 105,129 | ||||||
| Prepaids and other current assets | 164,389 | 212,180 | ||||||
| Total Current Assets | 4,441,084 | 7,156,029 | ||||||
| Intangible assets | 4,185,362 | 3,864,618 | ||||||
| Goodwill | 4,243,718 | 4,209,126 | ||||||
| Due from related party | 129,526 | 111,720 | ||||||
| Investment in unconsolidated joint ventures, cost method | 154,007 | 154,007 | ||||||
| Investment in unconsolidated joint ventures, equity method | 277,155 | 280,326 | ||||||
| Total Assets | $ | 13,430,852 | $ | 15,775,826 | ||||
| Liabilities and Stockholder’s Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and other current liabilities | $ | 352,223 | $ | 550,454 | ||||
| Dividends payable | 46,620 | 54,404 | ||||||
| Acquisition notes payable | 2,416,323 | 2,456,323 | ||||||
| Notes payable | 19,215 | 68,959 | ||||||
| Contingent consideration | 60,000 | 60,000 | ||||||
| Deferred revenue | 247,322 | 113,251 | ||||||
| Total Current Liabilities | 3,141,703 | 3,303,391 | ||||||
| Total Liabilities | 3,141,703 | 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 June 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 June 30, 2023 and December 31, 2022; | 5,110 | 5,110 | ||||||
| Additional paid-in capital | 20,434,371 | 19,950,774 | ||||||
| Accumulated other comprehensive income | 109,557 | 96,971 | ||||||
| Accumulated deficit | (10,259,959 | ) | (7,580,490 | ) | ||||
| Total Stockholders’ Equity | 10,289,149 | 12,472,435 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 13,430,852 | $ | 15,775,826 | ||||
| Onfolio Holdings, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue, services | $ | 295,750 | $ | 68,143 | $ | 688,151 | $ | 186,130 | ||||||||
| Revenue, product sales | 1,014,293 | 289,679 | 1,973,626 | 557,615 | ||||||||||||
| Total Revenue | 1,310,043 | 357,822 | 2,661,777 | 743,745 | ||||||||||||
| Cost of revenue, services | 129,622 | 55,416 | 433,786 | 183,755 | ||||||||||||
| Cost of revenue, product sales | 364,850 | 152,697 | 669,207 | 249,127 | ||||||||||||
| Total cost of revenue | 494,472 | 208,113 | 1,102,993 | 432,882 | ||||||||||||
| Gross profit | 815,571 | 149,710 | 1,558,784 | 310,863 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 1,572,825 | 1,035,463 | 3,192,205 | 1,769,753 | ||||||||||||
| Professional fees | 303,443 | 161,751 | 627,828 | 268,383 | ||||||||||||
| Impairment of intangible assets | 189,937 | – | 189,937 | – | ||||||||||||
| Acquisition costs | 57,393 | 163,307 | 208,007 | 240,468 | ||||||||||||
| Total operating expenses | 2,123,598 | 1,360,521 | 4,217,977 | 2,278,604 | ||||||||||||
| Loss from operations | (1,308,027 | ) | (1,210,811 | ) | (2,659,193 | ) | (1,967,741 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Equity method income | 5,207 | 6,309 | 12,095 | 16,488 | ||||||||||||
| Dividend income | 247 | 1,333 | 1,516 | 1,718 | ||||||||||||
| Interest income (expense), net | 2,626 | 1,144 | 58,758 | (1,256 | ) | |||||||||||
| Other income | 5,822 | 1,354 | 8,624 | 1,354 | ||||||||||||
| Impairment of investments | – | (29,557 | ) | – | (29,557 | ) | ||||||||||
| Loss on sale of asset | – | (34,306 | ) | – | (34,306 | ) | ||||||||||
| Total other income | 13,902 | (53,723 | ) | 80,993 | (45,559 | ) | ||||||||||
| Loss before income taxes | (1,294,125 | ) | (1,264,534 | ) | (2,578,200 | ) | (2,013,300 | ) | ||||||||
| Income tax (provision) benefit | – | – | – | – | ||||||||||||
| Net loss | (1,294,125 | ) | (1,264,534 | ) | (2,578,200 | ) | (2,013,300 | ) | ||||||||
| Preferred Dividends | (50,244 | ) | (45,728 | ) | (101,269 | ) | (88,848 | ) | ||||||||
| Net loss to common shareholders | $ | (1,344,369 | ) | $ | (1,310,262 | ) | $ | (2,679,469 | ) | $ | (2,102,148 | ) | ||||
| Net loss per common shareholder | ||||||||||||||||
| Basic and diluted | $ | (0.26 | ) | $ | (0.56 | ) | $ | (0.52 | ) | $ | (0.89 | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic and diluted | 5,110,195 | 2,355,045 | 5,110,195 | 2,354,560 | ||||||||||||
| Onfolio Holdings, Inc. | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| For the Six Months Ended June 30, 2023 and 2022 | ||||||||
| (Unaudited) | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (2,578,200 | ) | $ | (2,013,300 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Stock-based compensation expense | 483,597 | 459,845 | ||||||
| Equity method income | (12,095 | ) | (16,488 | ) | ||||
| Dividends received from equity method investment | 15,266 | 17,607 | ||||||
| Loss on sale of asset | – | 34,306 | ||||||
| Amortization of intangible assets | 361,108 | – | ||||||
| Impairment of intangible assets | 189,937 | – | ||||||
| Net change in: | ||||||||
| Accounts receivable | 31,241 | (23,026 | ) | |||||
| Inventory | (12,854 | ) | (9,797 | ) | ||||
| Prepaids and other current assets | 47,791 | (51,635 | ) | |||||
| Accounts payable and other current liabilities | (198,231 | ) | 72,638 | |||||
| Due to joint ventures | (17,806 | ) | (31,796 | ) | ||||
| Deferred revenue | 134,071 | 3,980 | ||||||
| Due to related parties | – | (480 | ) | |||||
| Net cash used in operating activities | (1,556,175 | ) | (1,558,146 | ) | ||||
| 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 | – | 316,500 | ||||||
| Payments of preferred dividends | (109,053 | ) | (44,995 | ) | ||||
| Payment of contribution to joint venture note payable | – | (35,000 | ) | |||||
| Payments on acquisition note payable | (40,000 | ) | – | |||||
| Proceeds from notes payable | – | 44,000 | ||||||
| Payments on note payables | (49,744 | ) | (31,151 | ) | ||||
| Net cash provided by financing activities | (198,797 | ) | 249,354 | |||||
| Effect of foreign currency translation | (43,795 | ) | – | |||||
| Net Change in Cash | (2,648,767 | ) | (1,285,598 | ) | ||||
| Cash, Beginning of Period | 6,701,122 | 1,710,318 | ||||||
| Cash, End of Period | 4,052,355 | $ | 424,720 | |||||
| Cash Paid For: | ||||||||
| Income Taxes | $ | – | $ | – | ||||
| Interest | $ | 18,836 | $ | 1,256 | ||||
