Onfolio Holdings, Inc 10-Q for FY2023 Q3

Onfolio Holdings, Inc (ONFO)

10-Q 2023-11-14 For: 2023-09-30

Added on April 08, 2026

About this 10-Q

Onfolio Holdings, Inc filed this 10-Q on November 14, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.31M; up 272.8% from $352.3K a year earlier
Net loss: $4.73M; compared with a net loss of $1.26M a year earlier

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Delaware		37-1978697
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1007 North Orange Street, 4th Floor, Wilmington, Delaware		19801
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	ONFO	Nasdaq Capital Market
Warrants To Purchase Common Stock	ONFOW	Nasdaq Capital Market

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4

	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	4

	Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months ended September 30, 2023 and 2022	5

	Consolidated Statements of Stockholders’ Equity (Deficit) for the Nine Months ended September 30, 2023 and 2022	6

	Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2023 and 2022	7

	Notes to the Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	31

Item 3.	Defaults Upon Senior Securities	31

Item 4.	Mine Safety Disclosures	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

Signatures		33

	●	the anticipated timing of the development of future products or services;
	●	projections of costs, revenue, earnings, capital structure and other financial items;
	●	statements of our plans and objectives;
	●	statements regarding the capabilities of our business operations;
	●	statements of expected future economic performance;
	●	statements regarding competition in our market; and
	●	assumptions underlying statements regarding us or our business.

	●	our ability to manage our current and projected financial position and estimated cash burn rate, including our estimates regarding expenses, future revenues and capital requirements, and ultimately our ability to continue as a going concern;
	●	our ability to raise additional capital or additional funding to further develop and expand our business to meet our long-term business objectives. We have limited revenues and we cannot predict when or if we will achieve significant revenues and sustained profitability;
	●	our ability to achieve significant revenues and sustained profitability;
	●	changes in customer demand;
	●	our ability to develop our brands cost-effectively, to attract new customers and retain customers on a cost-effective basis;
	●	our ability to compete in the markets in which our website participate;
	●	our ability to make strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses;
	●	our ability to continue to successfully manage our websites on a combined basis;
	●	security breaches, cybersecurity attacks and other significant disruptions in our information technology systems;
	●	developments and changes in laws and regulations, including increased regulation of our industry through legislative action and revised rules and standards;
	●	the occurrence of hostilities, political instability or catastrophic events and wars;
	●	Our ability to maintain the listing or trading of our common stock and warrants on the NASDAQ Capital Market and the potential impact on our business if we fail to do so;
	●	natural events such as severe weather, fires, floods and earthquakes, or man-made or other disruptions of our operating systems, structures or equipment;
	●	other risks to which our Company is subject; and
	●	other factors beyond the Company’s control.

Onfolio Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
	September 30			December 31
	2023			2022
Assets

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

The accompanying notes are an integral part of these unaudited consolidated financial statements

Onfolio Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)

	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 Stockholders' Equity
For the Nine Months Ended Sept 30, 2023 and 2022
(Unaudited)

														Accumulated
									Additional					Other
	Preferred Stock, $0.001 Par value				Common Stock, $0.001 Par Value				Paid-In		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity

Balance, December 31, 2022		69,660	$	70		5,110,195	$	5,110	$	19,950,774	$	(7,580,490	)	$	96,971		$	12,472,435

Stock-based compensation		-		-		-		-		233,355		-			-			233,355
Preferred dividends		-		-		-		-		-		(51,025	)		-			(51,025	)
Foreign currency translation															(7,481	)		(7,481	)
Net loss		-		-		-		-		-		(1,284,075	)		-			(1,284,075	)

Balance, March 31, 2023		69,660		70		5,110,195		5,110		20,184,129		(8,915,590	)		89,490			11,363,209

Stock-based compensation		-		-		-		-		250,242		-			-			250,242
Preferred dividends		-		-		-		-		-		(50,244	)		-			(50,244	)
Foreign currency translation															20,067			20,067
Net loss		-		-		-		-		-		(1,294,125	)		-			(1,294,125	)

Balance, June 30, 2023		69,660		70		5,110,195		5,110		20,434,371		(10,259,959	)		109,557			10,289,149

Stock-based compensation		-		-		-		-		86,436		-			-			86,436
Preferred dividends		-		-		-		-		-		(54,231	)		-			(54,231	)
Foreign currency translation															(35,647	)		(35,647	)
Net loss		-		-		-		-		-		(4,733,159	)		-			(4,733,159	)

Balance, September 30, 2023		69,660	$	70		5,110,195	$	5,110	$	20,520,807	$	(15,047,349	)	$	73,910		$	5,552,548

Balance, December 31, 2021		56,800	$	57		2,353,645	$	2,354	$	6,522,382	$	(3,150,988	)	$	-		$	3,373,805

Preferred Shares for cash		5,200		5		-		-		129,995		-			-			130,000
Stock-based compensation		-		-		1,400		1		219,659		-			-			219,660
Preferred dividends		-		-		-		-		-		(43,120	)		-			(43,120	)
Net loss		-		-		-		-		-		(748,766	)		-			(748,766	)

Balance, March 31, 2022		62,000		62		2,355,045		2,355		6,872,036		(3,942,874	)		-			2,931,579

Preferred Shares for cash		7,460		7		-		-		186,493		-			-			186,500
Stock-based compensation		-		-		1,400		1		240,184		-			-			240,185
Preferred dividends		-		-		-		-		-		(45,728	)		-			(45,728	)
Net loss		-		-		-		-		-		(1,264,534	)		-			(1,264,534	)

Balance, June 30, 2022		69,460		69		2,356,445		2,356		7,298,713		(5,253,136	)		-			2,048,002

Preferred Shares for cash		200		1		-		-		4,999		-			-			5,000
Common Stock issued – initial public offering		-		-		2,753,750		2,754		12,252,716		-			-			12,255,470
Stock-based compensation		-		-		-		-		247,706		-			-			247,706
Preferred dividends		-		-		-		-		-		(48,457	)		-			(48,457	)
Net loss		-		-		-		-		-		(969,696	)		-			(1,264,534	)

Balance, September 30, 2022		69,660	$	70		5,110,195	$	5,110	$	19,804,134	$	(6,271,289	)	$	-		$	2,048,002

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2023 and 2022
(Unaudited)

	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

The accompanying notes are an integral part of these consolidated financial statements

-	Identification of the contract with a customer
-	Identification of the performance obligations in the contract
-	Determination of the transaction price
-	Allocation of the transaction price to the performance obligations in the contract
-	Recognition of revenue when, or as, the Company satisfies a performance obligation

	For the Three Months ended September 30,				For the Nine Months ended September 30,
	2023		2022		2023		2022
Website management	$	30,921	$	54,637	$	101,578	$	170,976
Advertising and content revenue		592,782		4,396		1,020,063		74,186
Product sales		179,764		196,190		488,254		528,185
Digital Product Sales		509,844		97,077		2,365,193		322,699
Total revenue	$	1,313,311	$	352,300	$	3,975,088	$	1,096,046

Schedule of preliminary Fair value Acquisition
	Amount
Cash paid to seller		950,000
Total preliminary consideration transferred	$	950,000

Schedule Of Recognized Identified Assets Acquired And Liabilities
Cash Acquired	$	38,587
Other Current assets		14,858
Website domains		70,000
Customer relationships		322,000
Trademarks and Trade Names		90,000
Non-Compete agreement		30,000
Goodwill		407,888
Accounts payable and other accrued liabilities		(2,205	)
Deferred revenue		(21,128	)
Net assets acquired	$	950,000

Schedule Of Recognized Identified Assets Acquired And Liabilities
Website domains	$	220,000
Customer relationships		813,000
Trademarks and Trade Names		330,000
Non-Compete agreement		80,000
Goodwill		3,116,000
Net assets acquired	$	4,559,000

	Three Months ended September 30,						Nine Months ended September 30,
	2023			2022			2023			2022
Revenue	$	1,313,311		$	2,843,468		$	4,063,121		$	4,739,843
Operating loss		(909,373	)		(2,004,142	)		(3,149,802	)		(2,165,437	)
Net loss		(901,909	)		(2,049,922	)		(3,061,345	)		(2,205,900	)
Net loss attributable to common shareholders		(956,140	)		(2,049,922	)		(3,216,845	)		(2,205,900	)
Net loss per common share	$	(0.19	)	$	(0.07	)	$	(0.63	)	$	(0.82	)
Weighted Average common shares outstanding		5,110,195			3,284,339			5,110,195			2,675,634

	Estimated life	September 30, 2023			December 31, 2022
Website Domains	Indefinite	$	418,323		$	1,308,260
Website Domains	4 years		1,275,285			424,674
Customer relationships	4-6 years		1,641,313			1,638,502
Trademarks and Tradenames	10 years		476,796			476,010
Non-compete agreements	3 years		142,265			142,004
			3,953,982			3,989,450
Accumulated Amortization - Website domains			(245,756	)		(23,834	)
Accumulated Amortization - Customer Relationships			(334,130	)		(78,514	)
Accumulated Amortization - Trademarks / Tradenames			(47,265	)		(11,484	)
Accumulated Amortization - Non-Compete			(46,588	)		(11,000	)
Net Intangible		$	3,280,243		$	3,864,618

For the year ended December 31,	Amount
2023 (3 months remaining)	$	231,355
2024		756,419
2025		742,377
2026		628,664
2027		186,562
Thereafter		316,543
Total remaining intangibles amortization		2,861,920

	Outstanding Awards			Weighted Average Grant Date Fair Value			Weighted Average Exercise price
Outstanding at December 31, 2022		59,850		$	4.15		$	9.11
Granted		60,000			0.93			1.27
Exercised		-			-			-
Forfeited and cancelled		(22,661	)		(3.69	)		(13.68	)
Outstanding at September 30, 2023		97,189		$	2.25		$	3.21
Exercisable at September 30, 2023		81,932		$	2.35		$	3.23

	Outstanding Awards		Weighted Average Grant Date Fair Value		Weighted Average Exercise price
Outstanding at December 31, 2022		6,219,863	$	4.21	$	5.01
Granted		-		-		-
Exercised		-		-		-
Forfeited and cancelled		-		-		-
Outstanding at September 30, 2023		6,219,863	$	4.21	$	5.01
Exercisable at September 30, 2023		6,219,863	$	4.21	$	5.01

·	have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
·	comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
·	submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;”
·	disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

	·	our ability to acquire new customers or retain existing customers and grow revenue;

	·	our ability to offer competitive product pricing and control expenses;

	·	our ability to broaden product offerings;

	·	industry demand and competition;

	·	our ability to leverage technology and use and develop efficient processes;

	·	our ability to attract and retain talented employees;

	·	our ability to identify and acquire companies at reasonable prices and terms;

	·	our ability to reduce and control corporate overhead; and

	·	market conditions and our market position.

	For the Quarter Ended September 30,				$ Change from prior		% Change from prior
	2023		2022		year		year
Revenue, services	$	431,196	$	59,032	$	372,164		630	%
Revenue, product sales		882,115		293,268		588,847		201	%
Total Revenue	$	1,313,311	$	352,300		961,011		273	%

	For the Quarter Ended September 30,				$ Change from		% Change from
	2023		2022		prior year		prior year
Cost of revenue, services	$	218,063	$	100,961	$	117,102		129	%
Cost of revenue, product sales		247,533		115,883		131,650		151	%
Total Cost of Revenue		465,596		216,844		248,752		141	%

Exhibit No.		Description of Exhibit
10.1		Employee Agreement dated November 1, 2023 - Esbe van Heerden (incorporated by reference to our Form 8-K filed on November 6, 2023
22.1		List of issuer and guarantor subsidiaries (incorporated by reference to our Form 10-K filed on 4/12/23)
31.1*		Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company.
31.2*		Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company.
32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company.
32.2**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	ONFOLIO HOLDINGS INC.

Date: November 14, 2023	By:	/s/ Dominic Wells
		Dominic Wells Chief Executive Officer (Principal Executive Officer)

Date: November 14, 2023	By:	/s/ Esbe van Heerden
		Esbe van Heerden Chief Financial Officer (Principal Financial Officer)

1.	I have reviewed this Quarterly Report on Form 10-Q of Onfolio Holdings Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	1.	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.