Onfolio Holdings, Inc 8-K/A, filed Jan 10, 2023
Onfolio Holdings, Inc (ONFO)
About this 8-K/A
Onfolio Holdings, Inc filed this 8-K/A on January 10, 2023, reporting on events of October 25, 2022.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMS
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (Commission File Number) |
| (I.R.S. Employer Identification Number) |
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(Address of principal executive offices) |
| (Zip Code) |
Registrant's telephone number, including area code .(
___________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section l 2(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Warrants To Purchase Common Stock | ONFOW | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Explanatory Note
On October 27, 2022, Onfolio Holdings, Inc. (the "Company.'') filed with the Securities and Exchange Commission a Current Report on Form 8-K (the "Original Form 8-K") disclosing, among other things, that on October 25, 2022 it had completed the previously announced acquisition of the proofreading business assets of BWPS.
This Current Report on Form 8-K/A amends and supplements the Original Form 8-K to provide the disclosures required by Item 9.01 of Form 8-K, which were not previously filed with the Original Form 8-K, including the required financial statements of BWPS and the required pro forma financial statements. Except as otherwise provided herein, the other disclosures made in the Original Form 8-K remain unchanged. Please note that the pro forma financial statements also include pro forma financial information relating to the Company’s acquisitions of BCP Media, Inc. and SEO Butler Limited as described in the Company’s Form 8-K filed with the Securities and Exchange Commission on October 19, 2022, as amended on December 29, 2022.
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Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The (i) Unaudited Financial Statements of BWPS for the Six Months ended June 30, 2022 and 2021; and (ii) Audited Financial Statements of BWPS for the years ended December 31, 2021 and 2020 are attached hereto as Exhibit 99.1 and incorporated herein by reference.
(b) Pro forma financial information.
The unaudited pro forma financial statements and explanatory notes relating to the Company's acquisitions of SEO Butler Limited, BCP Media, Inc., and BWPS are attached hereto as Exhibit 99.2 and incorporated herein by reference.
(d) Exhibits.
Exhibit No. |
| Description |
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104 |
| Cover Page Interactive Data File (formatted as Inline XBRL) |
3 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ONFOLIO HOLDINGS INC. | |||
| Date: January 10, 2023 | By: | /s/ Dominic Wells | |
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| Dominic Wells, | |
Chief Executive Officer | |||
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EXHIBIT 99.1
| BWPS |
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| Financial Statements for the Six Months June 30, 2022 and 2021: |
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| 2 | |
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| 3 | |
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| 4 | |
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| 5 | |
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| 6-8 | |
| Financial Statements for the Years ended December 31, 2021 and 2020: |
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| 9 | |
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| 10 | |
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| 12 | |
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| 13 | |
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| 14-16 |
| 1 |
| Table of Contents |
BALANCE SHEETS
(Unaudited)
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| June 30 2022 |
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| December 31, 2021 |
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| ASSETS |
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| Current assets: |
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| Cash |
| $ | 233,107 |
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| $ | 134,623 |
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| Total current assets |
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| 233,107 |
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| 134,623 |
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| Total assets |
| $ | 233,107 |
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| $ | 134,623 |
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| LIABILITIES AND STOCKHOLDERS' EQUITY |
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| Current liabilities: |
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| Accounts payable |
| $ | - |
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| $ | - |
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| Total current liabilities |
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| - |
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| - |
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| Total liabilities |
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| - |
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| - |
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| Stockholders' equity: |
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| Owner's Equity |
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| (614,850 | ) |
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| (520,517 | ) |
| Retained Earnings |
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| 847,957 |
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| 655,140 |
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| Total stockholders' equity |
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| 233,107 |
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| 134,623 |
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| Total liabilities and stockholders' equity |
| $ | 233,107 |
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| $ | 134,623 |
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| See the accompanying notes to these unaudited financial statements | ||||||||
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| Table of Contents |
| STATEMENTS OF OPERATIONS | ||||||||
| FOR THE SIX MONTHS ENDING JUNE 30, 2022 and 2021 | ||||||||
| (Unaudited) | ||||||||
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| 2022 |
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| 2021 |
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| REVENUE |
| $ | 235,608 |
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| $ | 212,447 |
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| Cost of sales |
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| - |
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| - |
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| Gross Profit |
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| 235,608 |
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| 212,447 |
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| OPERATING EXPENSES: |
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| General and administrative |
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| 42,866 |
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| 25,639 |
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| Total operating expenses |
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| 42,866 |
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| 25,639 |
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| Net loss from operations |
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| 192,742 |
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| 186,808 |
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| OTHER INCOME (EXPENSES): |
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| Other income |
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| 75 |
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| 9 |
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| Exchange loss |
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| - |
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| - |
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| Total other income (expense) |
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| 75 |
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| 9 |
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| NET INCOME (LOSS) |
| $ | 192,817 |
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| $ | 186,817 |
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| See the accompanying notes to these unaudited financial statements | ||||||||
| 3 |
| Table of Contents |
| STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||
| FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021 | ||||||||||||
| (Unaudited) | ||||||||||||
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| Owner's |
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| Accumulated |
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| Equity |
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| Deficit |
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| Total |
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| Balance, December 31, 2020 |
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| (201,813 | ) |
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| 275,255 |
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| 73,442 |
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| Owner contributions |
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| - |
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| - |
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| - |
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| Owner distributions |
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| (131,724 | ) |
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| (131,724 | ) |
| Net income |
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| - |
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| 186,817 |
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| 186,817 |
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| Balance, June 30, 2021 |
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| (333,537 | ) |
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| 462,072 |
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| 128,535 |
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| Balance, December 31, 2021 |
| $ | (520,517 | ) |
| $ | 655,140 |
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| $ | 134,623 |
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| Owner contributions |
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| 67,207 |
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| - |
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| 67,207 |
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| Owner distributions |
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| (161,540 | ) |
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| - |
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| (161,540 | ) |
| Net income |
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| - |
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| 192,817 |
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| 192,817 |
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| Balance, June 30, 2022 |
| $ | (614,850 | ) |
| $ | 847,957 |
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| $ | 233,107 |
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| See the accompanying notes to these unaudited financial statements | ||||||||||||
| 4 |
| Table of Contents |
| STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE SIX MONTHS ENDING JUNE 30, 2022 AND 2021 |
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| (Unaudited) | ||||||||
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| 2022 |
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| 2021 |
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| CASH FLOWS FROM OPERATING ACTIVITIES: |
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| Net Income (Loss) |
| $ | 192,817 |
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| $ | 186,817 |
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| Changes in operating assets and liabilities: |
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| Accounts payable |
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| - |
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| - |
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| Net cash used in operating activities |
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| 192,817 |
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| 186,817 |
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| CASH FLOWS FROM FINANCING ACTIVITIES: |
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| Owner contributions |
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| 67,207 |
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| - |
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| Owner distributions |
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| (161,540 | ) |
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| (131,724 | ) |
| Net cash provided by financing activities |
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| (94,333 | ) |
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| (131,724 | ) |
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| Net change in cash |
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| 98,484 |
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| 55,093 |
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| Cash at beginning of period |
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| 134,623 |
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| 73,442 |
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| Cash at end of period |
| $ | 233,107 |
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| $ | 128,535 |
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| Supplemental disclosure of cash flow information: |
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| Cash paid for interest |
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| - |
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| - |
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| Cash paid for taxes |
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| - |
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| - |
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| See the accompanying notes to these unaudited financial statements | ||||||||
| 5 |
| Table of Contents |
NOTES TO UNAUDITED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022 and 2021
NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN
BWPS (which may be referred to as the “Company”, “we,” “us,” or “our”) is a sole proprietorship based out of Vietnam. The Company provides Wordpress plugins for purchase that provide security for digital assets on customer websites.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("US GAAP"). The accompanying unaudited financial statements do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the unaudited financial statements for the years presented have been included.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.
Significant estimates inherent in the preparation of the accompanying financial statements include valuation of provision for refunds and chargebacks, revenue recognition and contingencies.
Risks and Uncertainties
The Company's business and operations are sensitive to general business and economic conditions in the United States and other countries that the Company operates in. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations.
Concentration of Credit Risk
The Company maintains its cash with major financial institutions located in Singapore, which it believes to be credit worthy. The Singapore Deposit Insurance Corporation insures balances up to $75,000. At times, the Company may maintain balances in excess of the insured limits. As of June 30, 2022 the company had $41,842 in excess of the insured limit.
Cash and Cash Equivalents
The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. As of June 30, 2022 the Company had $233,107 of cash on hand.
Fair Value Measurements
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):
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| · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
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| · | Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
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| · | Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. |
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| Table of Contents |
The Company has no assets or liabilities valued using level 1, level 2, or level 3 inputs as of June 30, 2022 and December 31, 2021.
Income Taxes
The Company accounts for income taxes as a pass through entity, where the owner pays income taxes on it’s share of taxable income. The net profits and losses of the Company are allocated to the members in proportion to each members’ capital interest in the Company. Distributions are made by the Company to the members at such times and in such amounts as the members shall determine in their sole discretion.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 when it has satisfied the performance obligations under an arrangement with the customer reflecting the terms and conditions under which products or services will be provided, the fee is fixed or determinable, and collection of any related receivable is probable. ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.
The Company’s performance obligation for its revenue stream are to provide the digital website plugin to the customer, and revenues associated with completed sales are recognized at a point in time when they are provided to the customer. There is no financing component to the Company’s sales.
Advertising
The Company expenses advertising costs as they are incurred.
Recent Accounting Pronouncements
The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU No. 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
This ASU was amended by ASU 2020-05 and is effective for annual periods beginning after December 15, 2021. On July 30, 2018, the FASB issued ASU 2018-11, Leases (Topic 842) – Targeted Improvements, which provides an optional transition method of applying the new leases standard at the adoption date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, only incremental direct leasing costs may be capitalized under the new guidance. Any indirect incremental leasing costs must be expensed as incurred. The Company does not expect the adoption of ASU 2016-02 and related amendments to have a material impact on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses. The main objective of this guidance is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity. To achieve this, the amendments in this guidance replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Specifically, the amendments in this guidance require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This guidance is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures.
| 7 |
| Table of Contents |
NOTE 3 – COMMITMENTS AND CONTINGENCIES
The Company, from time to time, may be involved with lawsuits arising in the ordinary course of business. In the opinion of the Company's management, any liability resulting from such litigation would not be material in relation to the Company's consolidated financial position, results of operations and cash flows. There is no pending or threatened litigation.
NOTE 4 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through January 10, 2023, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in the financial statements except as disclosed below.
On October 3, 2022, Hoang Huu Thinh, an individual (“Thinh”), owner of the Company entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Onfolio Holdings, Inc. (“Onfolio”). Pursuant to the Asset Purchase Agreement, Onfolio purchased from Thinh, substantially all of the Company’s assets utilized in the operation of the business of providing a suite of optimization, customization, privacy and security products and services for WordPress websites (“WordPress Websites Business”), with the core business offerings consisting of (i) the WordPress plugin known as PREVENT DIRECT ACCESS available via the website preventdirectaccess.com, and (ii) the WordPress plugin known as PASSWORD PROTECT WORDPRESS available via the website passwordprotectwp.com.
Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Thinh agreed to sell to Onfolio, LLC the WordPress Websites Business, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the WordPress Websites Business is as follows: (i) $1,250,000 paid in cash at the closing and $40,000.00 paid via a promissory note to be made by Onfolio, LLC payable to Thinh after the performance of certain obligations by Thinh and others as provided for in the Asset Purchase Agreement; and (ii) up to $60,000 in cash pursuant to the earn-out provisions of the Asset Purchase Agreement. The transaction closed on October 25, 2022 and will be accounted for as a business combination under ASC 805.
| 8 |
| Table of Contents |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of BWPS
Opinion on the Financial Statements
We have audited the accompanying balance sheets of BWPS as of December 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/S/ BF Borgers CPA PC
BF Borgers CPA PC (PCAOB ID 5041)
We have served as the Company's auditor since 2022
Lakewood, CO
January 10, 2023
| 9 |
| Table of Contents |
| BALANCE SHEETS | ||||||||
| AS OF DECEMBER 31, 2021 AND 2020 | ||||||||
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| 2021 |
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| 2020 |
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| ASSETS |
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| Current assets: |
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| Cash |
| $ | 134,623 |
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| $ | 73,442 |
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| Total current assets |
|
| 134,623 |
|
|
| 73,442 |
|
|
|
|
|
|
|
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| Total assets |
| $ | 134,623 |
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| $ | 73,442 |
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| LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
|
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| Current liabilities: |
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|
|
|
|
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| Accounts payable |
| $ | - |
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| $ | - |
|
| Total current liabilities |
|
| - |
|
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| - |
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|
|
|
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|
|
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|
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| Total liabilities |
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| - |
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| - |
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|
|
|
|
|
|
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| Stockholders' equity: |
|
|
|
|
|
|
|
|
| Owner's Equity |
|
| (520,517 | ) |
|
| (201,813 | ) |
| Retained Earnings |
|
| 655,140 |
|
|
| 275,255 |
|
| Total stockholders' equity |
|
| 134,623 |
|
|
| 73,442 |
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders' equity |
| $ | 134,623 |
|
| $ | 73,442 |
|
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|
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|
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| See the accompanying notes to these financial statements | ||||||||
| 10 |
| Table of Contents |
| STATEMENTS OF OPERATIONS | ||||||||
| FOR THE YEARS ENDING DECEMBER 31, 2021 and 2020 | ||||||||
|
|
|
|
|
|
|
| ||
|
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
|
| ||
| REVENUE |
| $ | 436,244 |
|
| $ | 286,363 |
|
| Cost of sales |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
| 436,244 |
|
|
| 286,363 |
|
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
|
| 56,968 |
|
|
| 44,195 |
|
| Total operating expenses |
|
| 56,968 |
|
|
| 44,195 |
|
|
|
|
|
|
|
|
|
|
|
| Net loss from operations |
|
| 379,276 |
|
|
| 242,168 |
|
|
|
|
|
|
|
|
|
|
|
| OTHER INCOME (EXPENSES): |
|
|
|
|
|
|
|
|
| Other income |
|
| 609 |
|
|
| 22 |
|
| Exchange loss |
|
| - |
|
|
| - |
|
| Total other income (expense) |
|
| 609 |
|
|
| 22 |
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME (LOSS) |
| $ | 379,885 |
|
| $ | 242,190 |
|
|
|
|
|
|
|
|
|
|
|
| See the accompanying notes to these financial statements | ||||||||
| 11 |
| Table of Contents |
| STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 | ||||||||||||
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
| |||
|
|
| Owner's |
|
| Accumulated |
|
|
|
| |||
|
|
| Equity |
|
| Deficit |
|
| Total |
| |||
| Balance, December 31, 2019 |
|
|
|
| $ | 33,065 |
|
| $ | 33,065 |
| |
| Owner contributions |
|
| 41,935 |
|
|
|
|
|
|
| 41,935 |
|
| Owner distributions |
|
| (243,748 | ) |
|
|
|
|
|
| (243,748 | ) |
| Net income |
|
| - |
|
|
| 242,190 |
|
|
| 242,190 |
|
| Balance, December 31, 2020 |
|
| (201,813 | ) |
|
| 275,255 |
|
|
| 73,442 |
|
| Owner contributions |
|
|
|
|
|
| - |
|
|
| - |
|
| Owner distributions |
|
| (318,704 | ) |
|
| - |
|
|
| (318,704 | ) |
| Net income |
|
| - |
|
|
| 379,885 |
|
|
| 379,885 |
|
| Balance, December 31, 2021 |
| $ | (520,517 | ) |
| $ | 655,140 |
|
| $ | 134,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| See the accompanying notes to these financial statements | ||||||||||||
| 12 |
| Table of Contents |
| STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE YEARS ENDING DECEMBER 31, 2021 AND 2020 |
| |||||||
|
|
|
|
|
|
|
| ||
|
|
| 2021 |
|
| 2020 |
| ||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
| Net Income (Loss) |
| $ | 379,885 |
|
| $ | 242,190 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable |
|
| - |
|
|
| - |
|
| Net cash used in operating activities |
|
| 379,885 |
|
|
| 242,190 |
|
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| Owner contributions |
|
| - |
|
|
| 41,935 |
|
| Owner distributions |
|
| (318,704 | ) |
|
| (243,748 | ) |
| Net cash provided by financing activities |
|
| (318,704 | ) |
|
| (201,813 | ) |
|
|
|
|
|
|
|
|
|
|
| Net change in cash |
|
| 61,181 |
|
|
| 40,377 |
|
|
|
|
|
|
|
|
|
|
|
| Cash at beginning of period |
|
| 73,442 |
|
|
| 33,065 |
|
|
|
|
|
|
|
|
|
|
|
| Cash at end of period |
| $ | 134,623 |
|
| $ | 73,442 |
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
| Cash paid for interest |
|
| - |
|
|
| - |
|
| Cash paid for taxes |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| See the accompanying notes to these financial statements | ||||||||
| 13 |
| Table of Contents |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2021 and 2020
NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN
BWPS (which may be referred to as the “Company”, “we,” “us,” or “our”) is a sole proprietorship based out of Vietnam. The Company provides Wordpress plugins for purchase that provide security for digital assets on customer websites.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("US GAAP"). The accompanying unaudited financial statements do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the unaudited financial statements for the years presented have been included.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.
Significant estimates inherent in the preparation of the accompanying financial statements include valuation of provision for refunds and chargebacks, revenue recognition and contingencies.
Risks and Uncertainties
The Company's business and operations are sensitive to general business and economic conditions in the United States and other countries that the Company operates in. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations.
Concentration of Credit Risk
The Company maintains its cash with major financial institutions located in Singapore, which it believes to be credit worthy. The Singapore Deposit Insurance Corporation insures balances up to $75,000. At times, the Company may maintain balances in excess of the insured limits. As of December 31, 2021 the company had $48,679 in excess of the insured limit.
Cash and Cash Equivalents
The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. As of December 31, 2021 and 2020 the Company had $134,406 and $73,442 of cash on hand, respectively.
| 14 |
| Table of Contents |
Fair Value Measurements
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):
|
| · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|
|
|
|
|
| · | Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
|
|
|
|
|
| · | Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. |
The Company has no assets or liabilities valued using level 1, level 2, or level 3 inputs as of December 31, 2021 or 2020.
Income Taxes
The Company accounts for income taxes as a pass through entity, where the owner pays income taxes on it’s share of taxable income. The net profits and losses of the Company are allocated to the members in proportion to each members’ capital interest in the Company. Distributions are made by the Company to the members at such times and in such amounts as the members shall determine in their sole discretion.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 when it has satisfied the performance obligations under an arrangement with the customer reflecting the terms and conditions under which products or services will be provided, the fee is fixed or determinable, and collection of any related receivable is probable. ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.
The Company’s performance obligation for its revenue stream are to provide the digital website plugin to the customer, and revenues associated with completed sales are recognized at a point in time when they are provided to the customer. There is no financing component to the Company’s sales.
Advertising
The Company expenses advertising costs as they are incurred.
Recent Accounting Pronouncements
The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU No. 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
| 15 |
| Table of Contents |
This ASU was amended by ASU 2020-05 and is effective for annual periods beginning after December 15, 2021. On July 30, 2018, the FASB issued ASU 2018-11, Leases (Topic 842) – Targeted Improvements, which provides an optional transition method of applying the new leases standard at the adoption date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, only incremental direct leasing costs may be capitalized under the new guidance. Any indirect incremental leasing costs must be expensed as incurred. The Company does not expect the adoption of ASU 2016-02 and related amendments to have a material impact on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses. The main objective of this guidance is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity. To achieve this, the amendments in this guidance replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Specifically, the amendments in this guidance require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. This guidance is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures.
NOTE 3 – COMMITMENTS AND CONTINGENCIES
The Company, from time to time, may be involved with lawsuits arising in the ordinary course of business. In the opinion of the Company's management, any liability resulting from such litigation would not be material in relation to the Company's consolidated financial position, results of operations and cash flows. There is no pending or threatened litigation.
NOTE 4 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through January 10, 2023, the date the financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in the financial statements except as disclosed below.
On October 3, 2022, Hoang Huu Thinh, an individual (“Thinh”), owner of the Company entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Onfolio Holdings, Inc. (“Onfolio”). Pursuant to the Asset Purchase Agreement, Onfolio will purchase from Thinh, substantially all of the Company’s assets utilized in the operation of the business of providing a suite of optimization, customization, privacy and security products and services for WordPress websites (“WordPress Websites Business”), with the core business offerings consisting of (i) the WordPress plugin known as PREVENT DIRECT ACCESS available via the website preventdirectaccess.com, and (ii) the WordPress plugin known as PASSWORD PROTECT WORDPRESS available via the website passwordprotectwp.com.
Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Thinh agreed to sell to Onfolio, LLC the WordPress Websites Business, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the WordPress Websites Business is as follows: (i) $1,250,000 paid in cash at the closing and $40,000.00 paid via a promissory note to be made by Onfolio, LLC payable to Thinh after the performance of certain obligations by Thinh and others as provided for in the Asset Purchase Agreement; and (ii) up to $60,000 in cash pursuant to the earn-out provisions of the Asset Purchase Agreement. The transaction closed on October 25, 2022 and will be accounted for as a business combination under ASC 805.
| 16 |
EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial data are presented to illustrate the effect of the following acquisitions (“the Acquisitions”):
|
| 1. | the October 13, 2022, acquisition by Onfolio Holdings, Inc. (the “Company”), from i2W Ltd, a company incorporated and registered in England and Wales (“Seller”), and Jonathan Kiekbusch, Ezekiel Daldy, and Lyndsay Kiekbusch, shareholders of the Seller (collectively, the “Guarantors”), for the purchase of all of the issued share capital (“Sale Shares”) of SEO Butler Limited, under the “i2W Share Purchase Agreement”. Seller is the owner of the legal and beneficial title to the Sale Shares of SEO Butler, which operates as a productised service business operated via the seobutler.com website and the custom build order management system on orders.seobutler.com and under the SEOButler and PBNButler names, which will be known as “SEO Butler” (the “SEO Butler Acquisition”); |
|
|
|
|
|
| 2. | the October 14, 2022, acquisition (the “BCP Media Acquisition”) by the Company, from BCP Media, Inc., a Florida corporation (“BCP Media”), and Caitlin Pyle and Cody Lister, principals of BCP Media under the Asset Purchase Agreement (“BCP Agreement”). Pursuant to the BCP Agreement, the Company purchased from BCP Media, substantially all the Proofreading Business (defined below) assets of BCP Media and assigned the acquired assets to the Company, which, pursuant to the BCP Asset Purchase Agreement and certain ancillary agreements, will operate the business of online proofreading training (the “Proofreading Business”) via the following websites: ProofreadAnywhere.com, WorkAtHomeSchool.com, and WorkYourWay2020.com; and |
|
|
|
|
|
| 3. | the October 25, 2022 acquisition by the Company, from Hoang Huu Thinh, an individual (“Thinh”), substantially all of the Seller’s assets utilized in the operation of the business of providing a suite of optimization, customization, privacy and security products and services for WordPress websites, which will be known as “BWPS” (the “BWPS Acquisition”). |
Collectively, the acquired companies of SEO Butler, BCP Media and BWPS will be referred to as the “Acquired Businesses.”
The following unaudited pro forma combined balance sheet data as of June 30, 2022 is presented as if the Acquisitions had occurred on June 30, 2022. The following unaudited pro forma combined statement of operations data for the six months ended June 30, 2022 and the year ended December 31, 2021 is presented as if the Acquisitions occurred on January 1, 2021.
The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances; however, the actual results could differ. The pro forma adjustments are directly attributable to the Acquisition and are expected to have a continuing impact on the results of operations of the Company. Management believes that all adjustments necessary to present fairly the unaudited pro forma combined financial statements have been made. The unaudited pro forma combined financial statements are presented for informational purposes only and are not necessarily indicative of the results of operations that would have resulted had the Acquisition been consummated on the dates indicated, and should not be construed as being representative of the Company’s future results of operations or financial position.
The Acquired Businesses assets, liabilities and results of operations presented herein were derived from the audited financial statements of the Acquired Businesses for the years ended December 31, 2021 and 2020, the unaudited interim financial statements for the six months ended June 30, 2022 for BWPS and BCP Media, and for the years ended November 30, 2021 and 2020 and the unaudited interim financial statements for the six months ended May 31, 2022 for SEO Butler (collectively, the “Acquired Business Financial Statements”).
The unaudited pro forma combined financial statement data should be read in conjunction with (a) the historical consolidated financial statements and accompanying notes thereto of the Company for the year ended December 31, 2021, which were included in the Company’s Form S-1 Registration Statement for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on April 7, 2022, as amended (the “ Registration Statement”), (b) the historical unaudited consolidated quarterly financial statements and accompanying notes thereto of the Company for the six months ended June 30, 2022, which were included in the Company’s Form 10-Q for the six months ended June 30, 2022, as filed with the Securities and Exchange Commission on August 15, 2022 and (c) the Acquired Business Financial Statements, which are included as Exhibits 99.1, 99.2, and 99.3 to this Current Report on Form 8-K/A of which these Unaudited Pro Forma Combined Financial Statements are included as Exhibit 99.4.
The unaudited pro forma combined financial statements included herein constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. See the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Information” in the Registration Statement and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, as filed with the Commission on November 11, 2022.
| 1 |
ONFOLIO HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2022
|
|
| Consolidated Historical |
|
|
|
| SEO Butler Pro Forma |
|
|
|
|
| BWPS Pro Forma |
|
|
|
| BCP Media Pro Forma |
|
| Other Transaction Accounting |
|
| Combined Pro Forma |
| |||||||||||
|
|
| June 30, 2022 |
|
| SEO Butler |
|
| Adjustments( See Notes) |
|
| BWPS |
|
| Adjustments( See Notes) |
|
| BCP Media |
|
| Adjustments( See Notes) |
|
| Adjustments( See Notes) |
|
| June 30, 2022 |
| |||||||||
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| Cash and cash equivalents |
| $ | 424,720 |
|
| $ | 87,221 |
|
|
| (950,000 | )(a) |
| $ | 233,107 |
|
|
| (1,483,107 | ) |
| $ | 833,434 |
|
|
| (2,933,434 | )(a) |
| $ | 12,434,485 | (f) |
| $ | 8,646,426 |
|
| Accounts receivable, net |
|
| 37,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 37,650 |
|
| Deferred contract costs |
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 93,404 |
|
|
| (93,404 | )(c) |
|
|
|
|
|
| - |
|
| Inventory |
|
| 108,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 108,194 |
|
| Prepaid expenses and other current assets |
|
| 211,426 |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 2,545 |
|
|
| (2,545 | )(c) |
|
| (179,016 | ) |
|
| 32,410 |
|
| Total current assets |
|
| 781,990 |
|
|
| 87,221 |
|
|
| (950,000 | ) |
|
| 233,107 |
|
|
| (1,483,107 | ) |
|
| 929,383 |
|
|
| (3,029,383 | ) |
|
| 12,255,469 |
|
|
| 8,824,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed Assets, net |
|
| - |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 9,996 |
|
|
| (9,996 | )(c) |
|
|
|
|
|
| - |
|
| Intangible assets |
|
| 1,308,260 |
|
|
|
|
|
|
| 506,000 | (d) |
|
|
|
|
|
| 726,000 | (d) |
|
|
|
|
|
| 1,826,000 | (d) |
|
|
|
|
|
| 4,366,260 |
|
| Due from related party |
|
| 138,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 138,786 |
|
| Investment in unconsolidated joint ventures, cost method |
|
| 160,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 160,901 |
|
| Investment in unconsolidated joint ventures, equity method |
|
| 278,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 278,263 |
|
| Goodwill |
|
| - |
|
|
|
|
|
|
| 357,020 | (e) |
|
|
|
|
|
| 624,000 | (e) |
|
|
|
|
|
| 3,249,014 | (e) |
|
|
|
|
|
| 4,230,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| TOTAL ASSETS |
|
| 2,668,200 |
|
|
| 87,221 |
|
|
| (86,980 | ) |
|
| 233,107 |
|
|
| (133,107 | ) |
|
| 939,379 |
|
|
| 2,035,635 |
|
|
| 12,255,469 |
|
|
| 17,998,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable and other current liabilities |
|
| 295,181 |
|
|
| 241 |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 1,234 |
|
|
| (1,234 | )(c) |
|
|
|
|
|
| 295,422 |
|
| Dividends payable |
|
| 45,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 45,351 |
|
| Due to joint ventures |
|
| 185,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 185,000 |
|
| Acquisition notes payable |
|
| 17,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,323 |
|
| Notes Payable |
|
| 41,363 |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| 40,000 | (b) |
|
|
|
|
|
| 2,399,000 | (b) |
|
|
|
|
|
| 2,480,363 |
|
| Contingent consideration |
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| 60,000 | (b) |
|
|
|
|
| -(b) |
|
|
|
|
|
|
| 60,000 |
| |
| Deferred Revenue |
|
| 35,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 516,014 |
|
|
|
|
|
|
|
|
|
|
| 551,994 |
|
| Total current liabilities |
|
| 620,198 |
|
|
| 241 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
|
| 517,248 |
|
|
| 2,397,766 |
|
|
| - |
|
|
| 3,635,453 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
| 620,198 |
|
|
| 241 |
|
|
| - |
|
|
| - |
|
|
| 100,000 |
|
|
| 517,248 |
|
|
| 2,397,766 |
|
|
| - |
|
|
| 3,635,453 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net parent investment |
|
| - |
|
|
| 373,620 |
|
|
| (373,620 | )(c) |
|
| (614,850 | ) |
|
| 614,850 | (c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| Preferred stock |
|
| 69 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 69 |
|
| Common stock |
|
| 2,356 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 93 |
|
|
| (93 | )(c) |
|
| 2,754 | (f) |
|
| 5,110 |
|
| Additional paid-in capital |
|
| 7,298,713 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| 215,487 |
|
|
| (155,487 | )(b),(c) |
|
| 12,252,715 | (f) |
|
| 19,611,428 |
|
| Retained earnings (accumulated deficit) |
|
| (5,253,136 | ) |
|
| (286,640 | ) |
|
| 286,640 | (c) |
|
| 847,957 |
|
|
| (847,957 | )(c) |
|
| 206,551 |
|
|
| (206,551 | )(c) |
|
| - |
|
|
| (5,253,136 | ) |
| Total stockholders' equity |
|
| 2,048,002 |
|
|
| 86,980 |
|
|
| (86,980 | ) |
|
| 233,107 |
|
|
| (233,107 | ) |
|
| 422,131 |
|
|
| (362,131 | ) |
|
| 12,255,469 |
|
|
| 14,363,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 2,668,200 |
|
| $ | 87,221 |
|
| $ | (86,980 | ) |
| $ | 233,107 |
|
| $ | (133,107 | ) |
| $ | 939,379 |
|
| $ | 2,035,635 |
|
| $ | 12,255,469 |
|
| $ | 17,998,924 |
|
| 2 |
ONFOLIO HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
|
|
| Consolidated Historical |
|
|
|
|
| SEO Butler |
|
|
|
|
| BWPS |
|
|
|
|
| BCP Media |
|
| Transaction |
|
| Combined Pro Forma |
| |||||||||
|
|
| June 30, 2022 |
|
| SEO Butler |
|
| Pro Forma Adjustments |
|
| BWPS |
|
| Pro Forma Adjustments |
|
| BCP Media |
|
| Pro Forma Adjustments |
|
| Accounting Adjustments |
|
| June 30, 2022 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| Revenues |
| $ | 357,822 |
|
| $ | 332,527 |
|
| $ | - |
|
| $ | 235,608 |
|
|
|
|
| $ | 1,650,558 |
|
| $ | - |
|
| $ | - |
|
| $ | 2,576,515 |
| |
| Cost of revenues |
|
| 208,112 |
|
|
| 210,573 |
|
|
| - |
|
|
|
|
|
|
|
|
|
| 703,290 |
|
|
| - |
|
|
| - |
|
|
| 1,121,975 |
| |
| Gross profit |
|
| 149,710 |
|
|
| 121,954 |
|
|
| - |
|
|
| 235,608 |
|
|
|
|
|
| 947,268 |
|
|
| - |
|
|
| - |
|
|
| 1,454,540 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Selling, general and administrative expenses |
|
| 1,031,663 |
|
|
| 51,773 |
|
|
| 44,583 | (f) |
|
| 42,866 |
|
|
| 66,417 | (f) |
|
| 312,832 |
|
|
| 140,917 | (f) |
|
| - |
|
|
| 1,691,051 |
|
| Professional Fees |
|
| 328,858 |
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
| 127,489 |
|
|
| - |
|
|
| - |
|
|
| 456,347 |
|
| Total operating expenses |
|
| 1,360,521 |
|
|
| 51,773 |
|
|
| 44,583 |
|
|
| 42,866 |
|
|
|
|
|
|
| 440,321 |
|
|
| 140,917 |
|
|
| - |
|
|
| 2,147,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from operations |
|
| (1,210,811 | ) |
|
| 70,181 |
|
|
| (44,583 | ) |
|
| 192,742 |
|
|
|
|
|
|
| 506,947 |
|
|
| (140,917 | ) |
|
| - |
|
|
| (626,441 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity Method Income |
|
| 6,309 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6,309 |
|
| Dividend Income |
|
| 1,333 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,333 |
|
| Interest income (expense), net |
|
| 1,144 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (600 | )(g) |
|
| - |
|
|
| (35,985 | )(g) |
|
| - |
|
|
| (35,441 | ) |
| Other income |
|
| 1,354 |
|
|
| 3 |
|
|
| - |
|
|
| 75 |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,432 |
|
| Other expense |
|
| (29,557 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (29,557 | ) |
| Loss on sale of asset |
|
| (34,306 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| (34,306 | ) |
| Total other income (expense) |
|
| (53,723 | ) |
|
| 3 |
|
|
| - |
|
|
| 75 |
|
|
|
|
|
|
| - |
|
|
| (35,985 | ) |
|
| - |
|
|
| (90,230 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes |
|
| (1,264,534 | ) |
|
| 70,184 |
|
|
| (44,583 | ) |
|
| 192,817 |
|
|
|
|
|
|
| 506,947 |
|
|
| (176,902 | ) |
|
| - |
|
|
| (716,071 | ) |
| Income tax benefit |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| Net income (loss) |
|
| (1,264,534 | ) |
|
| 70,184 |
|
|
| (44,583 | ) |
|
| 192,817 |
|
|
|
|
|
|
| 506,947 |
|
|
| (176,902 | ) |
|
| - |
|
|
| (716,071 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| Dividends on Preferred stock |
|
| (45,728 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (45,728 | ) |
| Net income (loss) available to Common Shareholders |
| $ | (1,310,262 | ) |
| $ | 70,184 |
|
| $ | (44,583 | ) |
| $ | 192,817 |
|
|
|
|
|
| $ | 506,947 |
|
| $ | (176,902 | ) |
| $ | - |
|
| $ | (45,728 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
| $ | (0.56 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (0.02 | ) |
| Diluted |
| $ | (0.56 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (0.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing earnings/(loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
| 2,355,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,355,045 |
|
| Diluted |
|
| 2,355,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,355,045 |
|
| 3 |
ONFOLIO HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021
|
|
| Consolidated Historical |
|
|
|
|
| SEO Butler |
|
|
|
|
| BWPS |
|
|
|
|
| BCP Media |
|
| Other Transaction |
|
| Combined Pro Forma |
| |||||||||
|
|
| December 31, 2021 |
|
| SEO Butler |
|
| Pro Forma Adjustments |
|
| BWPS |
|
| Pro Forma Adjustments |
|
| BCP Media |
|
| Pro Forma Adjustments |
|
| Accounting Adjustments |
|
| December 31, 2021 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| Revenues |
| $ | 1,808,543 |
|
| $ | 720,610 |
|
| $ | - |
|
| $ | 436,244 |
|
| $ | - |
|
| $ | 3,762,496 |
|
| $ | - |
|
| $ | - |
|
| $ | 6,727,893 |
|
| Cost of revenues |
|
| 1,073,509 |
|
|
| 366,382 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,673,197 |
|
|
| - |
|
|
| - |
|
|
| 3,113,088 |
|
| Gross profit |
|
| 735,034 |
|
|
| 354,228 |
|
|
| - |
|
|
| 436,244 |
|
|
| - |
|
|
| 2,089,299 |
|
|
| - |
|
|
| - |
|
|
| 3,614,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative expenses |
|
| 2,479,152 |
|
|
| 140,189 |
|
|
| 89,167 | (g) |
|
| 56,968 |
|
|
| 132,833 | (g) |
|
| 1,245,254 |
|
|
| 281,833 | (g) |
|
| - |
|
|
| 4,425,396 |
|
| Professional Fees |
|
| 208,193 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 220,232 |
|
|
| - |
|
|
| - |
|
|
| 428,425 |
|
| Total operating expenses |
|
| 2,687,345 |
|
|
| 140,189 |
|
|
| 89,167 |
|
|
| 56,968 |
|
|
| 132,833 |
|
|
| 1,465,486 |
|
|
| 281,833 |
|
|
| - |
|
|
| 4,853,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from operations |
|
| (1,952,311 | ) |
|
| 214,039 |
|
|
| (89,167 | ) |
|
| 379,276 |
|
|
| (132,833 | ) |
|
| 623,813 |
|
|
| (281,833 | ) |
|
| - |
|
|
| (1,239,016 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity Method Income |
|
| 50,684 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 50,684 |
|
| Dividend Income |
|
| 9,970 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9,970 |
|
| Interest income (expense), net |
|
| (9,805 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,200 | )(h) |
|
| (14,702 | ) |
|
| (71,970 | )(h) |
|
| - |
|
|
| (97,677 | ) |
| Other income |
|
| - |
|
|
| 2 |
|
|
| - |
|
|
| 609 |
|
|
| - |
|
|
| 250,000 |
|
|
| - |
|
|
| - |
|
|
| 250,611 |
|
| Forgiveness of debt |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 20,832 |
|
|
| - |
|
|
| - |
|
|
| 20,832 |
|
| Total other income (expense) |
|
| 50,849 |
|
|
| 2 |
|
|
| - |
|
|
| 609 |
|
|
| (1,200 | ) |
|
| 256,130 |
|
|
| (71,970 | ) |
|
| - |
|
|
| 234,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes |
|
| (1,901,462 | ) |
|
| 214,041 |
|
|
| (89,167 | ) |
|
| 379,885 |
|
|
| (134,033 | ) |
|
| 879,943 |
|
|
| (353,803 | ) |
|
| - |
|
|
| (1,004,596 | ) |
| Income tax (provision) benefit |
|
| 1,314 |
|
|
| (29,424 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (28,110 | ) |
| Net income (loss) |
|
| (1,900,148 | ) |
|
| 184,617 |
|
|
| (89,167 | ) |
|
| 379,885 |
|
|
| (134,033 | ) |
|
| 879,943 |
|
|
| (353,803 | ) |
|
| - |
|
|
| (1,032,706 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
| Dividends on Preferred stock |
|
| (106,825 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (106,825 | ) |
| Net income (loss) available to Common Shareholders |
| $ | (2,006,973 | ) |
| $ | 184,617 |
|
| $ | (89,167 | ) |
| $ | 379,885 |
|
| $ | (134,033 | ) |
| $ | 879,943 |
|
| $ | (353,803 | ) |
| $ | - |
|
| $ | (106,825 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
| $ | (0.96 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (0.05 | ) |
| Diluted |
| $ | (0.96 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (0.05 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing earnings/(loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
| 2,080,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,080,733 |
|
| Diluted |
|
| 2,080,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,080,733 |
|
| 4 |
ONFOLIO HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
| 1. | DESCRIPTION OF TRANSACTIONS |
Acquisition of BWPS
On October 3, 2022, the Company entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Hoang Huu Thinh, an individual (“Thinh”). Pursuant to the Asset Purchase Agreement, the Company will purchase from Thinh, substantially all of the Seller’s assets utilized in the operation of the business of providing a suite of optimization, customization, privacy and security products and services for WordPress websites (“WordPress Websites Business”), with the core Business offerings consisting of (i) the WordPress plugin known as PREVENT DIRECT ACCESS available via the website preventdirectaccess.com, and (ii) the WordPress plugin known as PASSWORD PROTECT WORDPRESS available via the website passwordprotectwp.com.
Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Thinh agreed to sell to Onfolio, LLC the WordPress Websites Business, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the WordPress Websites Business is as follows: (i) $1,250,000 paid in cash at the closing and $40,000.00 paid via a promissory note to be made by Onfolio, LLC payable to Thinh after the performance of certain obligations by Thinh and others as provided for in the Asset Purchase Agreement; and (ii) up to $60,000 in cash pursuant to the earn-out provisions of the Asset Purchase Agreement. The transaction closed on October 25, 2022 and will be accounted for as a business combination under ASC 805.
SEO Butler Acquisition
On October 6, 2022, the Company entered into a Share Purchase Agreement (“Share Purchase Agreement”) with i2W Ltd, a company incorporated and registered in England and Wales (“Seller”), and Jonathan Kiekbusch, Ezekiel Daldy, and Lyndsay Kiekbusch, shareholders of the Seller (collectively, the “Guarantors”), for the purchase of all of the issued share capital (“Sale Shares”) of SEO Butler Limited, a company incorporated and registered in England and Wales (“SEO Butler”). Seller is the owner of the legal and beneficial title to the Sale Shares of SEO Butler, which operates as a productised service business operated via the seobutler.com website and the custom build order management system on orders.seobutler.com and under the SEOButler and PBNButler names. The Guarantors have agreed to guarantee to the Company the due and punctual performance, observance and discharge by the Seller of all the Guaranteed Obligations (as defined in the Share Purchase Agreement) if and when they become performable or due under the Share Purchase Agreement.
Pursuant to the Share Purchase Agreement, and on the terms and subject to the conditions contained therein, at the closing, the Company purchased the Sale Shares from the Seller, all as more fully described in the Share Purchase Agreement. The aggregate purchase price paid by the Company was $950,000. The transaction closed on October 13, 2022 and will be accounted for as a business combination under ASC 805.
BCP Media Acquisition
On October 13, 2022, the Company entered into an Asset Sale and Purchase Agreement (“BCP Asset Purchase Agreement”) with BCP Media, Inc., a Florida corporation (“BCP Media”), and Caitlin Pyle and Cody Lister, principals of BCP Media.
Pursuant to the BCP Asset Purchase Agreement, the Company purchased from BCP Media, substantially all the Proofreading Business (defined below) assets of BCP Media and assigned the acquired assets to the Company, which, pursuant to the BCP Asset Purchase Agreement and certain ancillary agreements, will operate the business of online proofreading training (the “Proofreading Business”) via the following websites: ProofreadAnywhere.com, WorkAtHomeSchool.com, and WorkYourWay2020.com.
Pursuant to the BCP Asset Purchase Agreement, and subject to the terms and conditions contained therein, BCP Media sold to the Company the purchased assets, all as more fully described in the BCP Asset Purchase Agreement. The purchase price was paid as follows: $4,499,000, plus a warrant to purchase up to 20,000 shares of the Company’s common stock at the price of $4.75 per share (the “Warrant”), with $2,100,000 paid in cash at the closing and $2,399,000 paid via a promissory note (the “BCP Note”).
| 5 |
The BCP Note was made by the Company to BCP Media. The BCP Note has the principal sum of $2,399,000 (the “Loan Amount”) and it matures on the one year anniversary from the date of the BCP Note (the “Maturity Date”). Interest on the outstanding principal balance of, and all other sums owing under the Loan Amount, is three percent (3%) (the “Interest Rate”), compounded annually. Upon the occurrence of an Event of Default (as defined in the BCP Note), the Interest Rate automatically increases to the rate of eight percent (8%) per annum, compounded annually. The Loan Amount is payable as follows: (i) commencing on the date that is thirty (30) days from the date of the BCP Note, and continuing monthly on such same day thereafter, the Company shall make an interest only payment to BCP Media equal to $5,997.50 per month; and (ii) the entire Loan Amount, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.
The transaction closed on October 14, 2022 and will be accounted for as a business combination under ASC 805.
| 2. | BASIS OF PRESENTATION |
The accompanying unaudited pro forma combined financial statements are based on the Company’s and the Acquired Businesses’ historical financial as adjusted to give effect to the pro forma adjustments necessary to reflect the Acquisitions and the Company’s new equity issuance to finance the acquisition. The unaudited pro forma combined statement of operations for the six months ended June 30, 2022 and the year ended December 31, 2021, gives effect to the Acquired Businesses as if it had occurred on January 1, 2022 and 2021, respectively and the pro forma combined balance sheet as of June 30, 2022 gives effect to the Acquisition as if it had occurred on June 30, 2022.
| 3. | PRELIMINARY PURCHASE PRICE ALLOCATIONS |
The preliminary purchase price for the Acquired Businesses have been allocated to the assets acquired and liabilities assumed for purposes of this pro forma financial information based on their estimated relative fair values. The purchase price allocations herein are preliminary. The final purchase price allocations for the Acquired Businesses will be determined after completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed but in no event later than one year following completion of the Acquisitions. Accordingly, the final acquisition accounting adjustments could differ materially from the accounting adjustments included in the pro forma financial statements presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of purchase price allocable to goodwill and could impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.
| 6 |
BWPS Preliminary Purchase Price Allocation
The acquisition of BWPS is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:
| Preliminary Purchase Price: |
|
|
| |
|
|
|
|
| |
| Cash |
| $ | 1,250,000 |
|
| Promissory Note |
|
| 40,000 |
|
| Contingent Consideration, Earn-out provision |
|
| 60,000 |
|
| Total preliminary purchase consideration |
| $ | 1,350,000 |
|
|
|
|
|
|
|
| Preliminary Purchase Price Allocation |
|
|
|
|
| Website domains |
| $ | 130,000 |
|
| Customer relationships |
|
| 506,000 |
|
| Trademarks and trade names |
|
| 60,000 |
|
| Non-compete agreement |
|
| 30,000 |
|
| Goodwill |
|
| 624,000 |
|
| Net assets acquired |
| $ | 1,350,000 |
|
SEO Butler Preliminary Purchase Price Allocation
The acquisition of SEO Butler is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:
| Preliminary Purchase Price: |
|
|
| |
|
|
|
|
| |
| Cash |
| $ | 950,000 |
|
| Total preliminary purchase consideration |
| $ | 950,000 |
|
|
|
|
|
|
|
| Preliminary Purchase Price Allocation |
|
|
|
|
| Cash |
| $ | 87,221 |
|
| Website domains |
|
| 70,000 |
|
| Customer relationships |
|
| 316,000 |
|
| Trademarks and trade names |
|
| 90,000 |
|
| Non-compete agreement |
|
| 30,000 |
|
| Liabilities assumed |
|
| (241 | ) |
| Goodwill |
|
| 357,020 |
|
| Net assets acquired |
| $ | 950,000 |
|
| 7 |
BCP Media Preliminary Purchase Price Allocation
The acquisition of BCP Media is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:
| Preliminary Purchase Price: |
|
|
| |
|
|
|
|
| |
| Cash |
| $ | 2,100,000 |
|
| Promissory Note |
|
| 2,399,000 |
|
| Earn-out provision |
|
| 60,000 |
|
| Total preliminary purchase consideration |
| $ | 4,559,000 |
|
|
|
|
|
|
|
| Preliminary Purchase Price Allocation |
|
|
|
|
| Website domains |
| $ | 130,000 |
|
| Customer relationships |
|
| 916,000 |
|
| Trademarks and trade names |
|
| 700,000 |
|
| Non-compete agreement |
|
| 80,000 |
|
| Liabilities assumed – Deferred revenue |
|
| 516,014 |
|
| Goodwill |
|
| 3,249,014 |
|
| Net assets acquired |
| $ | 4,559,000 |
|
| 4. | PRO FORMA ADJUSTMENTS |
The unaudited pro forma combined statements of operations and balance sheets reflect the effect of the following pro forma adjustments:
| (a) | Net pro forma impact to cash as follows: |
| Cash paid to sellers of SEO Butler |
| $ | (950,000 | ) |
| Cash paid to sellers of BCP Media |
|
| (1,250,000 | ) |
| Cash paid to sellers of BWPS |
|
| (2,100,000 | ) |
| Remove historical cash of BCP Media |
|
| (233,107 | ) |
| Remove historical cash of BWPS |
|
| (833,434 | ) |
| Net pro forma impact to cash |
| $ | 5,366,541 |
|
| (b) | Other Consideration given for asset acquisitions consisting of: |
| Note payable bearing interest at 3% per annum with a maturity date of October 14, 2023 |
| $ | 2,399,000 |
|
| Note payable bearing interest at 3% per annum with a maturity date of January 13, 2023 |
|
| 40,000 |
|
| Earn-out provision to be earned pursuant to the BWPS purchase agreement |
|
| 60,000 |
|
| Warrant for the purchase of Onfolio common shares at an exercise price of $4.75 |
|
| 60,000 |
|
| Total other consideration given |
| $ | 2,559,000 |
|
| (c) | Elimination of historical assets and liabilities not acquired as part Acquired Businesses |
| (d) | Estimated Fair Value of intangible assets acquired in acquisitions comprised of the following: |
| Intangible assets acquired from purchase of SEO Butler |
| $ | 506,000 |
|
| Intangible assets acquired from purchase of BCP Media |
|
| 726,000 |
|
| Intangible assets acquired from purchase of BWPS |
|
| 1,826,000 |
|
| Total intangible assets acquired |
| $ | 3,058,000 |
|
| 8 |
| (e) | Estimated Fair Value of goodwill acquired in business acquisitions |
| Goodwill acquired from purchase of SEO Butler |
| $ | 357,020 |
|
| Goodwill acquired from purchase of BCP Media |
|
| 624,000 |
|
| Goodwill acquired from purchase of BWPS |
|
| 3,249,014 | |
| Total Goodwill acquired |
| $ | 4,230,034 |
| (f) | On August 30, 2022, the Company completed its initial public offering, issuing 2,753,750 shares of common stock and 5,507,500 warrants (6,117,250 warrants including the option warrants), for net cash proceeds of $12,434,485. A portion of these proceeds were used to fund the cash portion of the consideration paid to the sellers of the Acquired Businesses. The Company also wrote off $179,016 of prepaid offering costs as a cost of capital of the initial public offering. |
| (g) | Estimated intangible assets amortization of acquired intangible assets. |
| (h) | Estimated interest from new promissory notes issued as consideration to the sellers of the Acquired Businesses. |
| 9 |