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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

 

 

 


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