Onfolio Holdings Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
ONFO$0.36+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-20.
0001654954-24-006689
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001654954-24-010636
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 81 current paragraphs.
43 unchanged; 14 reworded; 17 added; 6 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 11 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our strategic cost reduction initiatives, which we've been implementing over several quarters, have played a crucial role in these improvements. The acquisitions of RevenueZen in January 2024 and DDS Rank (detailed in Recent Developments below) have proven to be valuable additions to our portfolio, contributing positively to our finances.
Current report
During Q2, we made substantial headway in finalizing several acquisitions. Importantly, the cash components required for these acquisitions will be provided by the Agency SPV joint-venture, preserving Onfolio's cash reserves.
Current report
We still have a strong acquisition pipeline and are actively working towards completing these transactions.
Current report
We are currently in discussions to obtain debt financing to extend our runway, although nothing has been secured as of yet. Our aim is to secure financing that balances the need for increased cash with the importance of managing our burn rate effectively.
Current report
Our team remains dedicated to achieving our goals of reaching profitability, focusing on completing accretive SPV-funded acquisitions and optimizing our financial position.
Current report
In June 2024, we acquired SEO Marketing, Inc., (DBA “DDS Rank”), a leading provider of search engine optimization (SEO) services exclusively for dental practices, including dentists and orthodontists. DDS Rank focuses solely on the dental industry, ensuring top rankings for their clients by offering services to only one practice per geographic region. Our Company holds an 66% ownership stake in DDS Rank, while OA SPV maintains a 33% equity interest.
Current report
On October 25, 2023 Onfolio Holdings Inc. (the “Company”) received notice from The NASDAQ Stock Market that its common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Listing Rules of The Nasdaq Stock Market. On June 25, 2024, the NASDAQ Staff notified the Company that from June 10 to June 24, 2024, the closing bid price of the Company’s common stock has been at $1.00 per share or greater and that the Company has regained compliance with Listing Rule 5550(a)(2) and this matter is now closed.
Current report
Six Months Ended June 30, 2024 compared to the Six Months Ended June 30, 2023
Current report
Revenues
Current report
Cost of Revenue
Current report
Operating Expenses
Current report
Selling, General and Administrative
Current report
Professional Fees and Acquisition Costs
Current report
Other Income and expense
Current report
The Company has entered into two asset purchase agreements which includes contingent earn-out payments based on specific performance criteria.
Current report
BWPS Business Acquisition: The Company may be required to pay up to $60,000 to Hoang Huu Thinh, contingent upon the BWPS business meeting certain monthly gross revenue targets within three years from the closing date. No earn-out payments have been made as of June 30, 2024. (See Note 10 for further details.)
Current report
RevenueZen Acquisition: The Company may be obligated to pay up to $1,869,000 to the sellers of RevenueZen, contingent upon the business achieving a specified gross profit threshold within one year. As of June 30, 2024, no earn-out payments have been made. (See Note 10 for further details.)
Removed paragraphs (6)
Previous report
Based upon our historical financial statements, the first quarter is often the weakest performing quarter of the year, so we are eager to see the results for the remainder of the year.
Previous report
A significant factor in our improvement is the decrease in costs that we implemented, which we have been discussing for several quarters. Additionally, the acquisition of RevenueZen in January 2024 (detailed in Recent Developments below) has been a valuable addition to our portfolio. From both qualitative and quantitative perspectives, it has shown promising results.
Previous report
These operational improvements are significant and facilitate our path to overall profitability. As we pursue additional cash flowing acquisitions, our enhanced operational efficiency will continue to contribute positively while maintaining our focus on accretive acquisitions.
Previous report
On October 25, 2023, we received a notification letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) stating that because the closing bid price for the Company’s common stock had been below $1.00 per share for 30 consecutive business days, the Company was not in compliance with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). On April 23, 2024, Nasdaq’s Listing Qualifications Staff notified our Company that it has extended the time period for the Company to regain compliance with the Minimum Bid Requirement until October 21, 2024. To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 or higher for a minimum of ten consecutive business days.
Previous report
We intend to continue to actively monitor the closing bid price of our common stock and will evaluate all available options to regain compliance with the Minimum Bid Requirement. If the Company does not regain compliance within the additional compliance period, Nasdaq will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Minimum Bid Requirement during the 180-day additional compliance period or maintain compliance with the other Nasdaq listing requirements.
Previous report
We did not have, during the periods presented, any contractual commitments or contractual contingencies as defined in the rules and regulations of the SEC.
Reworded paragraphs (14)
Previous wording
The following discussion and analysis should be read in conjunction with our consolidated financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with**our audited historical consolidated financial statements which are included in ourCompany’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on April 1, 2024*.*
Current wording
The following discussion and analysis should be read in conjunction with our consolidated financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical consolidated financial statements which are included in our Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on April 1, 2024.
Previous wording
The first quarter of 2024 saw our revenue improve, gross margins improve, and net loss decrease significantly. Our cash used in operations for the quarter was $431,007, the lowest use of cash for operating activities since our IPO, compared to cash used in operations of $1,021,969 during the three months ended March 31, 2023.
Current wording
The first six months of 2024 saw our revenue improve, gross margins improve, and net loss decrease significantly. Our cash used in operations for the six months was $763,747, the lowest use of cash for operating activities since our initial public offering in August 2022, compared to cash used in operations of $1,556,175 during the six months ended June 30, 2023.
Previous wording
The year-on-year improvements are most noticeable in the net loss, which roughly halved in 2024 vs 2023 from $1,284,075 during the three months ended March 31, 2023 decreasing to a net loss of $630,497 for the three months ended March 31, 2024. This was also a quarter-on-quarter improvement down from $833,462 in the three months ended December 31, 2023.
Current wording
The year-on-year improvements are most noticeable in the net loss, which roughly halved in 2024 vs 2023 from $2,578,200 during the six months ended June 30, 2023 decreasing to a net loss of $1,412,234 for the six months ended June 30, 2024.
Previous wording
In January 2024, we acquired RevenueZen.com, an online service provider that works with B2B brands to grow their organic and referral traffic. ReveueZen offers B2B marketing services such as search-engine optimization, Linkedin marketing and content marketing. RevenueZen enjoys a strong reputation in its field, specializing in working with startups, healthcare, professional services, renewable energy, and financial services businesses, among others. Our Company holds an 88% ownership stake in RevenueZen, while RevenueZen founders maintain a 12% roll-over equity interest and continue to serve in leadership roles on the RevenueZen team.
Current wording
In January 2024, we acquired RevenueZen.com, an online service provider that works with B2B brands to grow their organic and referral traffic. RevenueZen offers B2B marketing services such as search-engine optimization, Linkedin marketing and content marketing. RevenueZen enjoys a strong reputation in its field, specializing in working with startups, healthcare, professional services, renewable energy, and financial services businesses, among others. Our Company holds an 88% ownership stake in RevenueZen, while RevenueZen founders maintain a 12% roll-over equity interest and continue to serve in leadership roles on the RevenueZen team.
Previous wording
The Company reported a net loss of $630,497 for the three months ended March 31, 2024 compared to a net loss of $1,284,075 for the three months ended March 31, 2023. The components of the decrease in net loss for the current period are as follows:
Current wording
The Company reported a net loss of $781,737 for the three months ended June 30, 2024 compared to a net loss of $1,294,125 for the three months ended June 30, 2023. The components of the decrease in net loss for the current period are as follows:
Previous wording
Revenue increased by $235,168, or 17% for the three months ended March 31, 2024 compared to 2023. The increase is primarily due to revenue from our RevenueZen acquisition completed during the first quarter of fiscal 2024 which increased revenue by approximately $368,105. This increase was partially offset by a decline in website management revenue, and a decline in digital product sales within the Company’s Mighty Deals subsidiary and a decline in revenue from its SEO Butler subsidiary.
Current wording
Revenue increased by $416,556, or 32% for the three months ended June 30, 2024 compared to 2023. The increase is primarily due to revenue from our RevenueZen acquisition completed during the first quarter of fiscal 2024 which increased revenue by approximately $621,000. This increase was partially offset by a decline in website management revenue, and a decline in digital product sales within the Company’s Mighty Deals subsidiary and a decline in revenue from its SEO Butler subsidiary.
Previous wording
Professional fees decreased by $67,195, or 27% during the three months March 31, 2024 compared to 2023 primarily due to decreased legal and accounting costs associated with the Company’s compliance requirements as a public company. The Company also incurred $94,341 in acquisition costs during the three months ended March 31, 2024 compared to $150,614 during the three months ended March 31, 2023, which included due diligence, audit, legal and other professional fees related to acquisitions and potential acquisitions. We expect acquisition costs to remain significant as we continue to grow based on acquisitions.
Current wording
Professional fees decreased by $82,188, or 27% during the three months ended June 30, 2024 compared to 2023 primarily due to decreased legal and accounting costs associated with the Company’s compliance requirements as a public company. The Company also incurred $8,946 in acquisition costs during the three months ended June 30, 2024 compared to $57,393 during the three months ended June 30, 2023, which included due diligence, audit, legal and other professional fees related to acquisitions and potential acquisitions. We expect acquisition costs to remain significant as we continue to grow based on acquisitions.
Previous wording
Total other expense was $22,447 during the three months March 31, 2024 compared to other income of $67,091 during the three months March 31, 2023. The decrease in other income was driven by lower equity method income and decrease in interest income from decreased cash balances.
Current wording
Total other expense was $22,618 during the three months ended June 30, 2024 compared to other income of $13,902 during the three months ended June 30, 2023. The decrease in other income was driven by lower equity method income and decrease in interest income from decreased cash balances.
Previous wording
Cost of revenue decreased by $25,955, or 4% due to the decrease in digital product sales within the Company’s Mighty Deals subsidiary offset by increases resulting from the Company’s recent acquisition. The Company’s gross profit margins increased in the current period compared to the prior period due to the Company’s efforts to streamline operations and create efficiencies, and due to the increased sales from digital product sales with higher margins in the new businesses. The components most significant to the Company’s cost of revenue are the costs of labor for service fulfillment, content creation, website hosting and maintenance costs and the costs of acquiring new inventory products for physical product sales.
Current wording
Cost of revenue increased by $230,741, or 21% due to the Company’s recent acquisition, offset by the decrease in digital product sales within the Company’s Mighty Deals subsidiary. The Company’s gross profit margins increased in the current period compared to the prior period due to the Company’s efforts to streamline operations and create efficiencies, and due to the increased sales from digital product sales with higher margins in the new businesses. The components most significant to the Company’s cost of revenue are the costs of labor for service fulfillment, content creation, website hosting and maintenance costs and the costs of acquiring new inventory products for physical product sales.
Previous wording
General and Administrative expenses decreased by $358,525, or 21% during the three months March 31, 2024 compared to 2023. The decrease was primarily due to a decrease in advertising and marketing costs of $136,000, a decrease in stock-based compensation expense of $215,000, and a $66,000 decrease in other general and administrative costs including travel and merchant fees, offset by an increase in amortization expense of $107,000 associated with the acquired intangible assets not present in the comparable period. Contractor and payroll costs were flat compared to the prior period despite the overall increase in the business, as a result of the Company’s efficiency efforts.
Current wording
General and Administrative expenses decreased by $350,001, or 11% during the six months June 30, 2024 compared to 2023. The decrease was primarily due to a decrease in advertising and marketing costs of $244,000, and a decrease in stock-based compensation expense of $438,000, offset by a $136,000 increase in other general and administrative costs including travel and merchant fees, an increase in amortization expense of $195,000 associated with the acquired intangible assets not present in the comparable period. Contractor and payroll costs were flat compared to the prior period despite the overall increase in the business, as a result of the Company’s efficiency efforts.
Previous wording
As of March 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $529,777 which was mainly on account of raising capital from sale of common stock and warrants in our IPO of $12,255,470. In addition, the Company has raised $600,000 pursuant to a private offering of Series A preferred stock, $350,000 in notes payable and repaid $2,164,498 on its acquisition note.
Current wording
As of June 30, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $310,025 which was mainly on account of raising capital from sale of common stock and warrants in our IPO of $12,255,470. In addition, the Company has raised $600,000 pursuant to a private offering of Series A preferred stock, $618,000 in notes payable and repaid $2,164,498 on its acquisition notes.
Previous wording
Net cash used in operating activities was $431,007 and $1,021,969 for the three months ended March 31, 2024 and 2023, respectively. The decrease was primarily from the increase in revenues and decreased general and administrative costs as the Company expanded its operations through its business acquisitions in the past year.
Current wording
Net cash used in operating activities was $763,747 and $1,556,175 for the six months ended June 30, 2024 and 2023, respectively. The decrease was primarily from the increase in revenues and decreased general and administrative costs as the Company expanded its operations through its business acquisitions in the past year.
Previous wording
Net cash used in investing activities was $250,000 and $850,000 for the three months ended March 31, 2024 and 2023, respectively. The cash used in investing activities was primarily for the purchase of businesses in both periods.
Current wording
Net cash used in investing activities was $304,000 and $850,000 for the six months ended June 30, 2024 and 2023, respectively. The cash used in investing activities was primarily for the purchase of businesses in both periods and additional cost method investments.
Previous wording
Cash flows provided by financing activities was $264,135 for the three months ended March 31, 2024 compared to cash used in financing activities of $135,326 during the three months ended March 31, 2023. During the 2024 period, we received $350,000 in proceeds from notes payable and we paid $70,122 in dividends to preferred stockholders and made payments totaling $25,743 on notes payable. During the 2023 period, we paid $74,994 in dividends to preferred stockholders and made payments totaling $60,332 on notes payable.
Current wording
Cash flows provided by financing activities was $415,749 for the six months ended June 30, 2024 compared to cash used in financing activities of $198,797 during the six months ended June 30, 2023. During the 2024 period, we received $617,900 in proceeds from notes payable and we paid $151,035 in dividends to preferred stockholders and made payments totaling $57,516 on notes payable. During the 2023 period, we paid $74,994 in dividends to preferred stockholders and made payments totaling $60,332 on notes payable.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Cost of revenue increased by $256,696, or 52% due to the Company’s recent acquisition offset by the decrease in digital product sales within the Company’s Mighty Deals subsidiary. The Company’s gross profit margins decreased in the current period compared to the prior period due to the increased cost of sales for services. The components most significant to the Company’s cost of revenue are the costs of labor for service fulfillment, content creation, website hosting and maintenance costs and the costs of acquiring new inventory products for physical product sales.
Current report — wording carried from elsewhere
General and Administrative expenses decreased by $68,476, or 4% during the three months ended June 30, 2024 compared to 2023. The decrease was primarily due to a decrease in advertising and marketing costs of $16,000, and a decrease in stock-based compensation expense of $223,000, offset by an increase in other general and administrative costs of $121,000, including travel and merchant fees, and an increase in amortization expenses of $88,000 associated with the acquired intangible assets not present in the comparable period. Contractor and payroll costs were flat compared to the prior period despite the overall increase in the business, as a result of the Company’s efficiency efforts.
Current report — wording carried from elsewhere
The Company reported a net loss of $1,412,234 for the six months ended June 30, 2024 compared to a net loss of $2,578,200 for the six months ended June 30, 2023. The components of the decrease in net loss for the current period are as follows:
Current report — wording carried from elsewhere
Revenue increased by $651,724, or 24% for the six months ended June 30, 2024 compared to 2023. The increase is primarily due to revenue from our RevenueZen acquisition completed during the first quarter of fiscal 2024 which increased revenue by approximately $989,000. This increase was partially offset by a decline in website management revenue, and a decline in digital product sales within the Company’s Mighty Deals subsidiary and a decline in revenue from its SEO Butler subsidiary.
Current report — wording carried from elsewhere
Our general and administrative expenses consist primarily of consulting related expenses paid to contractors, stock-based compensation, advertising and marketing costs, and other expenses. In the near future, we expect our general and administrative expenses to continue to increase to support business growth. Over the long term, we expect general and administrative expenses to decrease as a percentage of revenue.
Current report — wording carried from elsewhere
Professional fees decreased by $226,383, or 36% during the six months June 30, 2024 compared to 2023 primarily due to decreased legal and accounting costs associated with the Company’s compliance requirements as a public company. The Company also incurred $103,287 in acquisition costs during the six months ended June 30, 2024 compared to $208,007 during the six months ended June 30, 2023, which included due diligence, audit, legal and other professional fees related to acquisitions and potential acquisitions. We expect acquisition costs to remain significant as we continue to grow based on acquisitions.
Current report — wording carried from elsewhere
Total other expense was $45,065 during the six months June 30, 2024 compared to other income of $80,993 during the six months June 30, 2023. The decrease in other income was driven by lower equity method income and decrease in interest income from decreased cash balances.