Onfolio Holdings Inc. Announces Fourth Quarter and Year-End 2023 Financial Results and Provides Corporate Update
WILMINGTON, Del., April 02, 2024 (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 fourth quarter and full year ended December 31, 2023. The Company’s Annual Report Form 10-K was filed with the Securities and Exchange Commission on April 1, 2024 and is available on the SEC’s website at www.sec.gov.
Recent Corporate Highlights
- Completed the acquisition of RevenueZen, a provider of B2B marketing services with a strong reputation and search engine presence, in January 2024
- Completed a Reg D Preferred Shares Raise, in late 2023.
- Launched a $2.5MM joint venture with private investors to acquire more B2B marketing agencies aimed at helping ONFO reach profitability, in March 2024.
Fourth Quarter and Year End 2023 Financial Highlights
- Fourth quarter revenue grew 13% to $1.27M vs. $1.12M in the prior year period and vs. $1.31M in 3Q23
- Fourth quarter gross profit grew 11% to $0.84M vs. $0.75M in the prior year period and vs. $0.85M in 3Q23
- Fourth quarter total operating expenses decreased 12% to $1.67M vs. $1.91M in the prior year period and vs. $5.59M in 3Q23
- Fourth quarter net loss to common shareholders decreased to $0.9M vs. $1.36M in the prior year period and vs. $4.79M in 3Q23
- Revenue grew 136% YOY to $5.24M in 2023 vs. $2.22M in 2022
- Gross profit grew 171% to $3.24M vs $1.20M in 2022
- Total cash operating expenses grew 116% to $11.48M vs. $5.31M in 2022
- Net loss to common shareholders grew 89% to $8.37M vs. a net loss of $4.43M in 2022
- Cash at 12/31/23 was $0.98M vs. $6.70M at 12/31/22
“The 4th Quarter 2023 saw us raise additional capital via Series A preferred shares and promissory notes, which we used to close on an acquisition on 1/1/24, and continue our efforts to reduce expenses and become lean. While we made significant progress, and those efforts have continued to lead to improved results in Q1 of 2024 as well, we acknowledge that there is still more work to be done,” commented Onfolio CEO Dominic Wells.
“2023 was a formative year for us as we navigated our first full year as a public company. The operational results improved considerably as the year went on, and this was reflected gradually in our financial results, although not at the pace we would’ve like to see.
“We spent 2023 addressing our lack of profitability by improving our operational efficiencies, and by exploring capital raising strategies beneficial to shareholders, favouring debt over additional equity to avoid dilution.
“We were met with several headwinds in this area – our modest revenues and limited history meant that we were receiving capital offers for insufficient amounts or prohibitive interest rates, and in many cases both. We opted against capital and terms that would not allow us to buy the accretive cashflow necessary to substantially reduce our ongoing financial burn.
“With substantial revenue growth throughout 2023 versus 2022, and now with a growing history, we are seeing more capital availability, and we’re now assessing optimal ways to extend our financial runway and achieve profitability.
“One such source of capital that is already in process is the joint venture we are pursuing with private accredited investors only to co-invest in upcoming acquisitions (“Onfolio Agency SPV offering”). Information on the Onfolio Agency SPV offering can be found at https://onfospv.com.
“Although the broader economic climate made more funding scarce for us, it has paradoxically brought profitability within closer reach by equally affecting our acquisition targets.
“Earlier, we anticipated needing an additional $5-$10M to acquire enough free cash flow to reach profitability. Now, based on our current pipeline, reduced expenses, and the deal structures we are currently working on, we estimate needing approximately $1M to $1.5M.
“The market’s capital shortage means that our target companies require less cash up front as part of the total consideration, have fewer offers from other buyers, and have lower overall asking prices.
“We also don’t need a large sum available to close on each acquisition. Some of them can be acquired for as little as $300,000 cash up front, ranging up to $900,000 for larger transactions. In these acquisitions, the cash up front component is around 30% of the acquisition price, meaning we can acquire cashflow for much less up-front capital than previously.
“Shareholders will note the recent RevenueZen acquisition exemplifies such a favorable deal structure, and so far, we consider the performance of said acquisition in the three months we’ve owned it to be strong.
“We believe the money we raise in the Onfolio Agency SPV offering or through other means, will enable us to acquire the requisite online businesses to attain profitability, and so we feel we are closer than ever to becoming FCF positive and continuing our march forward.
“We are also making progress with our existing portfolio and corporate overheads, continually looking for ways to reduce expenses, grow revenues, and improve profitability, agnostic of new acquisitions. As always, our goal is to reach profitability and scale from there,” concluded Mr Wells.
About Onfolio Holdings
Onfolio Holdings acquires controlling interests in and actively manage small online businesses that we believe (i) operate in sectors with long-term growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence and (iv) can be managed by our existing team or have strong management teams largely in place. Through the acquisition and growth of a diversified group of online businesses with these characteristics, we believe we offer investors in our shares an opportunity to diversify their own portfolio risk. Our company excels at finding acquisition opportunities where the seller has not fully optimized their business, and our experience and skillset allows us 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 1A “Risk Factors” in our most recent Form 10-K; other risks to which our company is subject; 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: |
| investors@onfolio.com |
| Onfolio Holdings, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| December 31 | December 31 | ||||||
| 2023 | 2022 | ||||||
| Assets | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 982,261 | $ | 6,701,122 | |||
| Accounts receivable, net | 90,070 | 137,598 | |||||
| Inventory | 92,637 | 105,129 | |||||
| Prepaids and other current assets | 111,097 | 212,180 | |||||
| Total Current Assets | 1,276,065 | 7,156,029 | |||||
| Intangible assets | 3,110,204 | 3,864,618 | |||||
| Goodwill | 1,167,194 | 4,209,126 | |||||
| Due from related party | 150,974 | 111,720 | |||||
| Investment in unconsolidated joint ventures, cost method | 154,007 | 154,007 | |||||
| Investment in unconsolidated joint ventures, equity method | 273,042 | 280,326 | |||||
| Total Assets | $ | 6,131,483 | $ | 15,775,826 | |||
| Liabilities and Stockholder’s Equity | |||||||
| Current Liabilities: | |||||||
| Accounts payable and other current liabilities | $ | 493,816 | $ | 550,454 | |||
| Dividends payable | 68,011 | 54,404 | |||||
| Acquisition notes payable | 17,323 | 2,456,323 | |||||
| Notes payable | – | 68,959 | |||||
| Contingent consideration | 60,000 | 60,000 | |||||
| Deferred revenue | 149,965 | 113,251 | |||||
| Total Current Liabilities | 789,115 | 3,303,391 | |||||
| Total Liabilities | 789,115 | 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, 92,260 and 69,660 issued and outstanding at December 31, 2023 and 2022; | 93 | 70 | |||||
| Common stock, $0.001 par value, 50,000,000 shares authorized, 5,107,395 issued and outstanding at December 31, 2023 and 2022; | 5,108 | 5,110 | |||||
| Additional paid-in capital | 21,107,311 | 19,950,774 | |||||
| Accumulated other comprehensive income | 182,465 | 96,971 | |||||
| Accumulated deficit | (15,952,609 | ) | (7,580,490 | ) | |||
| Total Stockholders’ Equity | 5,342,368 | 12,472,435 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 6,131,483 | $ | 15,775,826 | |||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||
| Onfolio Holdings, Inc. | |||||||
| Consolidated Statements of Operations | |||||||
| For the Year Ended December 31, | |||||||
| 2023 | 2022 | ||||||
| Revenue, services | $ | 1,496,038 | $ | 544,822 | |||
| Revenue, product sales | 3,743,948 | 1,674,993 | |||||
| Total Revenue | 5,239,986 | 2,219,815 | |||||
| Cost of revenue, services | 837,888 | 356,957 | |||||
| Cost of revenue, product sales | 1,159,267 | 664,405 | |||||
| Total cost of revenue | 1,997,155 | 1,021,362 | |||||
| Gross profit | 3,242,831 | 1,198,453 | |||||
| Operating expenses | |||||||
| Selling, general and administrative | 6,040,688 | 4,271,865 | |||||
| Professional fees | 1,160,410 | 509,941 | |||||
| Impairment of goodwill and intangible assets | 3,952,433 | – | |||||
| Acquisition costs | 326,899 | 527,792 | |||||
| Total operating expenses | 11,480,430 | 5,309,598 | |||||
| Loss from operations | (8,237,599 | ) | (4,111,145 | ) | |||
| Other income (expense) | |||||||
| Equity method income | 13,190 | 34,432 | |||||
| Dividend income | 1,610 | 3,193 | |||||
| Interest income (expense), net | 75,041 | (2,152 | ) | ||||
| Other income | 2,937 | 13,223 | |||||
| Impairment of investments | – | (137,602 | ) | ||||
| Loss on sale of asset | – | (34,306 | ) | ||||
| Total other income | 92,778 | (123,212 | ) | ||||
| Loss before income taxes | (8,144,821 | ) | (4,234,357 | ) | |||
| Income tax (provision) benefit | – | – | |||||
| Net loss | (8,144,821 | ) | (4,234,357 | ) | |||
| Preferred Dividends | (227,298 | ) | (195,145 | ) | |||
| Net loss to common shareholders | $ | (8,372,119 | ) | $ | (4,429,502 | ) | |
| Net loss per common shareholder | |||||||
| Basic and diluted | $ | (1.64 | ) | $ | (1.35 | ) | |
| Weighted average shares outstanding | |||||||
| Basic and diluted | 5,107,395 | 3,285,934 | |||||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||
| Onfolio Holdings, Inc. | |||||||||||||||||||||||
| Consolidated Statements of Stockholders’ Equity | |||||||||||||||||||||||
| For the Years Ended December 31, 2023 and 2022 | |||||||||||||||||||||||
| Preferred Stock, $0.001 Par value |
Common Stock, $0.001 Par Value |
||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Stockholders’ Equity |
||||||||||||||||
| Balance, December 31, 2021 | 56,800 | $ | 57 | 2,353,645 | $ | 2,354 | $ | 6,522,381 | $ | (3,150,988 | ) | $ | – | $ | 3,373,804 | ||||||||
| Preferred shares for cash | 12,860 | 13 | – | – | 321,487 | – | – | 321,500 | |||||||||||||||
| Common stock sold for cash | – | – | 2,753,750 | 2,754 | 12,101,913 | – | – | 12,104,667 | |||||||||||||||
| Stock-based compensation | – | – | – | – | 944,995 | – | – | 944,995 | |||||||||||||||
| Warrants issued for acquisition | – | – | – | – | 60,000 | – | – | 60,000 | |||||||||||||||
| Preferred dividends | – | – | – | – | – | (195,145 | ) | – | (195,145 | ) | |||||||||||||
| Foreign currency translation | – | – | – | – | – | – | 96,971 | 96,971 | |||||||||||||||
| Net loss | – | – | – | – | – | (4,234,357 | ) | – | (4,234,357 | ) | |||||||||||||
| Balance, December 31, 2022 | 69,660 | 70 | 5,107,395 | 5,108 | 19,950,776 | (7,580,490 | ) | 96,971 | 12,472,435 | ||||||||||||||
| Preferred shares for cash | 22,600 | 23 | – | – | 564,977 | – | – | 565,000 | |||||||||||||||
| Stock-based compensation | – | – | – | – | 591,558 | – | – | 591,558 | |||||||||||||||
| Preferred dividends | – | – | – | – | – | (227,298 | ) | – | (227,298 | ) | |||||||||||||
| Foreign currency translation | – | – | – | – | – | – | 85,494 | 85,494 | |||||||||||||||
| Net loss | – | – | – | – | – | (8,144,821 | ) | – | (8,144,821 | ) | |||||||||||||
| Balance, December 31, 2023 | 92,260 | $ | 93 | 5,107,395 | $ | 5,108 | $ | 21,107,311 | $ | (15,952,609 | ) | $ | 182,465 | $ | 5,342,368 | ||||||||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||||||||||||||||||
| Onfolio Holdings, Inc. | |||||||
| Consolidated Statements of Cash Flows | |||||||
| For the Years Ended December 31, 2023 and 2022 | |||||||
| 2023 | 2022 | ||||||
| Cash Flows from Operating Activities | |||||||
| Net loss | $ | (8,144,821 | ) | $ | (4,234,357 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Stock-based compensation expense | 591,558 | 944,995 | |||||
| Equity method income | (13,190 | ) | (34,432 | ) | |||
| Dividends received from equity method investment | 20,474 | 33,488 | |||||
| Impairment of Cost method investment | – | 51,894 | |||||
| Loss on sale of asset | – | 34,306 | |||||
| Amortization of intangible assets | 739,780 | 124,832 | |||||
| Impairment of intangible assets | 3,952,433 | – | |||||
| Net change in: | |||||||
| Accounts receivable | 47,528 | (122,974 | ) | ||||
| Inventory | 12,492 | 8,125 | |||||
| Prepaids and other current assets | 101,083 | (52,389 | ) | ||||
| Accounts payable and other current liabilities | (56,638 | ) | 325,706 | ||||
| Due to joint ventures | (39,251 | ) | (9,730 | ) | |||
| Deferred revenue | 36,714 | 60,123 | |||||
| Due to related parties | – | (480 | ) | ||||
| Net cash used in operating activities | (2,751,838 | ) | (2,870,893 | ) | |||
| Cash Flows from Investing Activities | |||||||
| Proceeds from sale of intangible assets | – | 45,694 | |||||
| Cash paid to acquire businesses | (850,000 | ) | (4,261,413 | ) | |||
| Investments in joint ventures | – | (67,500) | |||||
| Net cash used in investing activities | (850,000 | ) | (4,283,219 | ) | |||
| Cash Flows from Financing Activities | |||||||
| Proceeds from sale of common stock | – | 12,104,667 | |||||
| Proceeds from sale of Series A preferred stock | 565,000 | 321,500 | |||||
| Payments of preferred dividends | (213,691 | ) | (142,239 | ) | |||
| Payment of contribution to joint venture note payable | – | (215,000 | ) | ||||
| Payments on acquisition note payable | (2,439,000 | ) | – | ||||
| Proceeds from notes payable | – | 44,000 | |||||
| Payments on note payables | (68,959 | ) | (3,555 | ) | |||
| Net cash provided by financing activities | (2,156,650 | ) | 12,109,373 | ||||
| Effect of foreign currency translation | 39,627 | 35,543 | |||||
| Net Change in Cash | (5,718,861 | ) | 4,990,804 | ||||
| Cash, Beginning of Period | 6,701,122 | 1,710,318 | |||||
| Cash, End of Period | 982,261 | $ | 6,701,122 | ||||
| Cash Paid For: | |||||||
| Income Taxes | $ | – | $ | – | |||
| Interest | $ | 68,938 | $ | 7,082 | |||
| Non-cash transactions: | |||||||
| Notes payable issued for asset acquisitions | $ | – | $ | 2,439,000 | |||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||
