Onfolio Holdings, Inc 10-Q for FY2023 Q1

Onfolio Holdings, Inc (ONFO)

10-Q 2023-05-15 For: 2023-03-31

Added on April 08, 2026

About this 10-Q

Onfolio Holdings, Inc filed this 10-Q on May 15, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.35M; up 250.3% from $385.92K a year earlier
Net loss: $1.28M; compared with a net loss of $748.77K 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)	5

	Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	5

	Consolidated Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2023 and 2022	6

	Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months ended March 31, 2023 and 2022	7

	Consolidated Statements of Cash Flows for the Three Months ended March 31, 2023 and 2022	8

	Notes to the Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		32

	●	the anticipated timing of the development of future products;
	●	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 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;
	●	the coronavirus (“COVID-19”) and its potential impact on our business; and
	●	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)
	March 31			December 31
	2023			2022
Assets

Current Assets:
Cash		4,663,522			6,701,122
Accounts receivable, net		114,962			137,598
Inventory		90,301			105,129
Prepaids and other current assets		241,455			212,180
Total Current Assets		5,110,240			7,156,029

Intangible assets		4,556,071			3,864,618
Goodwill		4,219,501			4,209,126
Due from related party		127,854			111,720
Investment in unconsolidated joint ventures, cost method		154,007			154,007
Investment in unconsolidated joint ventures, equity method		278,837			280,326

Total Assets	$	14,446,510		$	15,775,826

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable and other current liabilities	$	342,678		$	550,454
Dividends payable		30,435			54,404
Acquisition notes payable		2,416,323			2,456,323
Notes payable		48,627			68,959
Contingent consideration		60,000			60,000
Deferred revenue		185,238			113,251
Total Current Liabilities		3,083,301			3,303,391

Total Liabilities		3,083,301			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 March 31, 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 March 31, 2023 and December 31, 2022;		5,110			5,110
Additional paid-in capital		20,184,129			19,950,774
Accumulated other comprehensive income		89,490			96,971
Accumulated deficit		(8,915,590	)		(7,580,490	)
Total Stockholders' Equity		11,363,209			12,472,435
Total Liabilities and Stockholders' Equity	$	14,446,510		$	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 March 31,
	2023			2022

Revenue, services	$	392,401		$	117,987
Revenue, product sales		959,333			267,936
Total Revenue		1,351,734			385,923

Cost of revenue, services		273,313			128,339
Cost of revenue, product sales		335,208			96,431
Total cost of revenue		608,521			224,770

Gross profit		743,213			161,153

Operating expenses
Selling, general and administrative		1,696,380			797,490
Professional fees		247,385			43,432
Acquisition costs		150,614			77,161
Total operating expenses		2,094,379			918,083

Loss from operations		(1,351,166	)		(756,930	)

Other income (expense)
Equity method income		6,888			10,179
Dividend income		1,269			385
Interest income (expense), net		56,132			(2,400	)
Other income		2,802			-
Total other income		67,091			8,164

Loss before income taxes		(1,284,075	)		(748,766	)

Income tax (provision) benefit		-			-

Net loss		(1,284,075	)		(748,766	)

Preferred Dividends		(51,025	)		(43,120	)
Net loss to common shareholders	$	(1,335,100	)	$	(791,886	)

Net loss per common shareholder
Basic and diluted	$	(0.26	)	$	(0.34	)

Weighted average shares outstanding
Basic and diluted		5,110,196			2,354,049

Onfolio Holdings, Inc.
Consolidated Statements of Stockholders' Equity
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)

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

Balance, December 31, 2022		69,660	$	70		5,110,196	$	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		5,110,196	$	5,110	$	20,184,129	$	(8,915,590	)	$	89,490		$	11,363,209

Balance, December 31, 2021		56,800	$	57		2,353,645	$	2,354	$	6,522,382	$	(3,150,988	)	$	82,009		$	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	)	$	82,009		$	2,931,579

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

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)

	2023			2022
Cash Flows from Operating Activities
Net loss	$	(1,284,075	)	$	(748,766	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense		233,355			219,660
Equity method income		(6,888	)		(10,179	)
Dividends received from equity method investment		8,377			7,426
Amortization of intangible assets		170,996			-
Net change in:
Accounts receivable		22,636			(14,782	)
Inventory		14,828			1,328
Prepaids and other current assets		(29,275	)		(18,767	)
Accounts payable and other current liabilities		(207,776	)		39,262
Due to joint ventures		(16,134	)		(33,142	)
Deferred revenue		71,987			15,980
Due to related parties		-			(480	)

Net cash used in operating activities		(1,021,969	)		(542,460	)

Cash Flows from Investing Activities
Cash paid to acquire businesses		(850,000	)		-
Investments in joint ventures		-			(22,500	)
Net cash used in investing activities		(850,000	)		(22,500	)

Cash Flows from Financing Activities
Proceeds from sale of Series A preferred stock		-			130,000
Payments of preferred dividends		(74,994	)		(2,968	)
Payment of contribution to joint venture note payable		-			(20,000	)
Payments on acquisition note payable		(40,000	)		-
Payments on note payables		(20,332	)		(21,855	)

Net cash provided by financing activities		(135,326	)		85,177

Effect of foreign currency translation		(30,305	)		-

Net Change in Cash		(2,037,600	)		(479,783	)
Cash, Beginning of Period		6,701,122			1,710,318

Cash, End of Period		4,663,522		$	1,230,535

Cash Paid For:
Income Taxes	$	-		$	-
Interest	$	18,836		$	2,400

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

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 March 31,
	2023			2022
Revenue	$	1,439,767		$	1,896,375
Operating loss		(1,179,731	)		(161,295	)
Net loss		(1,112,640	)		(155,978	)
Net loss attributable to common shareholders		(1,163,665	)		(155,978	)
Net loss per common share	$	(0.23	)	$	(0.07	)
Weighted Average common shares outstanding		5,110,196			2,354,049

	Estimated life	March 31, 2023		December 31, 2022
Website Domains	Indefinite	$	1,308,260	$	1,308,260
Website Domains	4 years		1,276,455		424,674
Customer relationships	4-6 years		1,646,692		1,638,502
Trademarks and Tradenames	10 years		478,299		476,010
Non-compete agreements	3 years		142,767		142,004
			4,852,473		3,989,450
Accumulated Amortization - Website domains			(86,015)		(23,834)
Accumulated Amortization - Customer Relationships			(163,927)		(78,514)
Accumulated Amortization - Trademarks / Tradenames			(23,499)		(11,484)
Accumulated Amortization - Non-Compete			(22,961)		(11,000)
Net Intangible		$	4,556,071	$	3,864,618

For the year ended December 31,	Amount
2023 (9 months remaining)	$	609,565
2024		756,419
2025		742,728
2026		629,571
2027		186,562
Thereafter		332,966
Total remaining intangibles amortization		2,556,358

	Outstanding Awards			Weighted Average Grant Date Fair Value			Weighted Average Exercise price
Outstanding at December 31, 2022		59,850		$	4.15		$	9.11
Granted		-			-			-
Exercised		-			-			-
Forfeited and cancelled		(22,661	)		(3.69	)		(13.68	)
Outstanding at March 31, 2023		37,189		$	4.37		$	6.33
Exercisable at March 31, 2023		23,406		$	4.37		$	6.27

	1.)	They are less subject to the Google algorithm and other matters outside our control;

	2.)	They are larger businesses, with sufficient profitability to hire dedicated operators; and

	3.)	A larger percentage of their revenues are recurring.

·	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.

	For the Quarter Ended March 31,				$ Change from prior		% Change from prior
	2023		2022		year		year
Revenue, services	$	392,401	$	117,987	$	274,414		233	%
Revenue, product sales		959,333		267,936		691,397		258	%
Total Revenue	$	1,351,734	$	385,923		965,811		250	%

	For the Quarter Ended March 31,				$ Change from		% Change from
	2023		2022		prior year		prior year
Cost of revenue, services	$	273,313	$	128,339	$	144,974		113	%
Cost of revenue, product sales		335,208		96,431		238,777		248	%
Total Cost of Revenue		608,521		224,770		383,751		171	%

Exhibit No.		Description of Exhibit
2.1#		Asset Purchase Agreement - Contentellect
3.1#		Amended and Restated Certificate of Incorporation
3.2#		Certificate of Amendment of Certificate of Incorporation
3.3#		Amended and Restated Bylaws
4.1#		Form of Warrant Agent Agreement
4.2#		Form of Warrant Agreement (included in Exhibit 4.1)
4.3#		Form of Representative’s Warrant
4.4#		Form of Stock Certificate
4.5		Warrant - BCP MEDIA, Inc. (incorporated by reference to our Form 8-K filed on 10/19/22)
10.1		Warrant Agency Agreement, dated August 30, 2022, between the Company and VStock Transfer LLC. (incorporated by reference to our Form 8-K filed on 8/30/22)
22.1		List of issuer and guarantor subsidiaries (incorporated by reference to 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: May 15, 2023	By:	/s/ Dominic Wells
		Dominic Wells Chief Executive Officer (Principal Executive Officer)

Date: May 15, 2023	By:	/s/ Rob te Braake
		Rob to Braake Interim 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 March 31, 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.