ONFO Onfolio Holdings Inc

Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW) (“Onfolio” or the “Company”), a holding company that acquires and manages a diversified portfolio of online businesses across a broad range of verticals, announces financial results for the third quarter ended September 30, 2023.

Financial Highlights

• Third quarter 2023 revenue grew 273% year-over-year to $1.31 million compared to $0.35 million in the third quarter of 2022
• Third quarter 2023 gross profit grew 526% to $0.85 million (representing gross margin of 64.5%) vs. $0.14 million in the prior year period (representing gross margin of 38.4%)
• Third quarter 2023 total operating expenses increased 397% to $5.59 million (including approximately $3.8 million in impairment charges related to intangible assets) vs. $1.12 million in the prior year period
• Third quarter 2023 net loss to common shareholders expanded to $4.79 million vs. $1.31 million net loss in the prior year period
• Cash at September 30, 2023 was $3.38 million vs. $6.70 million at December 31, 2022

“The third quarter was marked by sequentially flat revenue and operating expenses that were nearly $300,000 lower than in the second quarter, excluding the impairment charge of intangible assets recognized in the third quarter. Our business model assumes that our success lies in buying stable online businesses and growing them organically over time while demonstrating operating leverage and keeping operating expenses in check,” commented Onfolio CEO Dominic Wells. “Despite a few one-time items impacting prior quarter results and the impairment charge this quarter, we believe our ability to manage operating expenses is apparent. To this end, we recently announced additional cost-savings initiatives that should show results beginning in the fourth quarter. We are committed to becoming profitable, and managing expenses is an important component of that process.

“Of course, another key component of our corporate strategy is growing organically as well as through acquisitions of sustainable online businesses. We have a number of corporate initiatives under way that should help us deliver organic growth, including the roll out of some AI tools that can help a number of our portfolio companies.

“On the acquisition front, we recently announced the raise of over $1 million through the sale of preferred shares and promissory notes. We continue to seek additional funds under the preferred share program and are also exploring other avenues to raise non-dilutive capital. I want to emphasize the funds we are seeking are considered growth capital and will be used to make product or business acquisitions, not to meet payroll or the like. We see a number of opportunities in the market and are optimistic about having news to share on this front in the near future,” concluded Mr. Wells.

About Onfolio Holdings

Onfolio acquires and manages a diversified portfolio of online businesses across a broad range of verticals, each with a niche content focus and brand identity. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio’s experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.

Forward-Looking Statements

The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continues,” “estimates,” “projects,” “intends,” and similar expressions. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as revenue growth and earnings, and strategy for growth and financial results. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and other risks to which our Company is subject, and various other factors beyond the Company’s control. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

For investor inquiries: CORE IR investors@onfolio.com 516-222-2560

Onfolio Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
		September 30				December 31
		2023				2022
Assets
Current Assets:
Cash and cash equivalents		$	3,373,178			$	6,701,122
Accounts receivable, net			97,522				137,598
Inventory			114,492				105,129
Prepaids and other current assets			121,557				212,180
Total Current Assets			3,706,749				7,156,029
Intangible assets			3,280,243				3,864,618
Goodwill			1,165,636				4,209,126
Due from related party			156,952				111,720
Investment in unconsolidated joint ventures, cost method			154,007				154,007
Investment in unconsolidated joint ventures, equity method			274,774				280,326
Total Assets		$	8,738,361			$	15,775,826
Liabilities and Stockholder’s Equity
Current Liabilities:
Accounts payable and other current liabilities		$	431,189			$	550,454
Dividends payable			49,341				54,404
Acquisition notes payable			2,416,323				2,456,323
Notes payable			-				68,959
Contingent consideration			60,000				60,000
Deferred revenue			228,960				113,251
Total Current Liabilities			3,185,813				3,303,391
Total Liabilities			3,185,813				3,303,391
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $0.001 per value, 5,000,000 shares authorized
Series A Preferred stock, $0.001 par value, 1,000,000 shares authorized, 69,660 issued and outstanding at September 30, 2023 and December 31, 2022;			70				70
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,110,195 issued and outstanding at September 30, 2023 and December 31, 2022;			5,110				5,110
Additional paid-in capital			20,520,807				19,950,774
Accumulated other comprehensive income			73,910				96,971
Accumulated deficit			(15,047,349	)			(7,580,490	)
Total Stockholders' Equity			5,552,548				12,472,435
Total Liabilities and Stockholders' Equity		$	8,738,361			$	15,775,826

Onfolio Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
			2023				2022				2023				2022
Revenue, services		$	433,490			$	59,032			$	1,121,641			$	245,162
Revenue, product sales			879,821				293,268				2,853,447				850,883
Total Revenue			1,313,311				352,300				3,975,088				1,096,046
Cost of revenue, services			218,063				100,961				651,849				284,716
Cost of revenue, product sales			247,533				115,883				916,740				365,010
Total cost of revenue			465,596				216,844				1,568,589				649,726
Gross profit			847,715				135,457				2,406,499				446,320
Operating expenses
Selling, general and administrative			1,532,152				974,998				4,724,357				2,744,751
Professional fees			216,082				148,649				843,910				417,032
Impairment of intangible assets			3,762,579				-				3,952,516				-
Acquisition costs			77,525				-				285,532				240,468
Total operating expenses			5,588,338				1,123,647				9,806,315				3,402,251
Loss from operations			(4,740,623	)			(988,190	)			(7,399,816	)			(2,955,931	)
						Note
Other income (expense)
Equity method income			2,826				9,568				14,921				26,056
Dividend income			94				574				1,610				2,292
Interest income (expense), net			10,231				(2,739	)			68,989				(3,995	)
Other income			(5,687	)			11,091				2,937				12,445
Impairment of investments			-				-				-				(29,557	)
Loss on sale of asset			-				-				-				(34,306	)
Total other income			7,464				18,494				88,457				(27,065	)
Loss before income taxes			(4,733,159	)			(969,696	)			(7,311,359	)			(2,982,996	)
Income tax (provision) benefit			-				-				-				-
Net loss			(4,733,159	)			(969,696	)			(7,311,359	)			(2,982,996	)
Preferred Dividends			(54,231	)			-				(155,500	)			(88,848	)
Net loss to common shareholders		$	(4,787.390	)		$	(1,310,262	)		$	(7,466,859	)		$	(3,071,844	)
Net loss per common shareholder
Basic and diluted		$	(0.94	)		$	(0.30	)		$	(1.46	)		$	(1.15	)
Weighted average shares outstanding
Basic and diluted			5,110,195				3,284,339				5,110,195				2,675,634

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2023 and 2022
(Unaudited)
		2023				2022
Cash Flows from Operating Activities
Net loss	$	(7,311,359	)		$	(2,982,996	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense		570,033				701,551
Equity method income		(14,921	)			(26,056	)
Dividends received from equity method investment		20,473				23,915
Loss on sale of asset		-				34,306
Amortization of intangible assets		549,914				-
Impairment of intangible assets		3,952,516				-
Net change in:
Accounts receivable		40,076				(4,491	)
Inventory		(9,363	)			4,058
Prepaids and other current assets		90,623				(120,214	)
Accounts payable and other current liabilities		(119,265	)			39,163
Due to joint ventures		(45,232	)			(26,561	)
Deferred revenue		115,709				(21,802	)
Due to related parties		-				(480	)
Net cash used in operating activities		(2,160,796	)			(2,373,607	)
Cash Flows from Investing Activities
Proceeds from sale of intangible assets		-				45,694
Cash paid to acquire business		(850,000	)			-
Investments in joint ventures		-				(22,500	)
Net cash used in investing activities		(850,000	)			23,194
Cash Flows from Financing Activities
Proceeds from sale of Series A preferred stock		-				321,500
Proceeds from sale of common stock						12,255,470
Payments of preferred dividends		(160,563	)			(91,264	)
Payment of contribution to joint venture note payable		-				(215,000	)
Payments on acquisition note payable		(40,000	)			-
Proceeds from notes payable		-				44,000
Payments on note payables		(68,959	)			(59,228	)
Net cash provided by financing activities		(269,522	)			12,255,478
Effect of foreign currency translation		(47,626	)			-
Net Change in Cash		(3,327,944	)			9,905,065
Cash, Beginning of Period		6,701,122				1,710,318
Cash, End of Period	$	3,373,178			$	11,615,383
Cash Paid For:
Income Taxes	$	-			$	-
Interest	$	61,141			$	5,493