Onfolio Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 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.
Sep 30, 2024 · Filed Nov 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 2024-06-30; filed 2024-08-14.
0001654954-24-010636
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001654954-24-014446
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 81 previous paragraphs and 83 current paragraphs.
53 unchanged; 19 reworded; 11 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 13 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 (11)
Current report
Notably, our net loss roughly halved year-over-year, improving from a net loss of $7,311,359 for the nine months ended September 30, 2023 (which included an impairment loss of $3,952,516), to a net loss of $1,909,993 in the same period of 2024.
Current report
In Q3, we saw further gains towards profitability, through increased organic revenue growth, expense reduction, and an acquisition (Eastern Standard, detailed in Recent Developments below) that will contribute to our revenue from Q4 onwards. Quarterly revenue rose 53% year-over-year year, and 16.5% quarter-over-quarter, while total loss from operations decreased to $485,478, down from $4,740,623 in Q3 2023 (which included the impairment loss described above) and $759,119 in Q2 2024.
Current report
Operational improvements made in Q2 within several portfolio companies yielded substantial cost savings, with impacts most noticeable in August and September 2024. September 2024 marked a milestone with revenues exceeding $700,000 for the first time, and while the net loss for the month was $352,714, non-cash expenses such as amortization made up $346,802 of this loss.
Current report
Moving into Q4, the acquisition of Eastern Standard will contribute to our consolidated results. We continue to explore organic growth opportunities, operational efficiencies, and further accretive acquisitions assisted by OA SPVs (described in Note 2) and our joint-venture investors.
Current report
Management remains committed to continuous improvement and achieving profitability by focusing on optimizing our financial position and completing accretive acquisitions.
Current report
In October 2024, we acquired Eastern Standard, a premier digital agency specializing in brand strategy, website development, and digital marketing. Eastern Standard provides tailored solutions across various industries, helping clients enhance their online presence through strategic branding, search engine optimization (SEO), and user-focused design. Our Company holds a 70% ownership stake in Eastern Standard, while the OA SPVs maintain a 20% equity interest, and the Eastern Standard founders maintain a 10% roll-over equity interest and continue to serve in leadership roles on the Eastern Standard team.
Current report
On September 20, 2024, Eastern Standard LLC (“Eastern Standard Delaware”), a Delaware limited liability company and the Company’s majority owned subsidiary, entered into an Asset Purchase Agreement (“Eastern Standard Asset Purchase Agreement”) with Eastern Standard, LLC (“Eastern Standard Pennsylvania”), a Pennsylvania limited liability company, Mark Gisi, James Keller and Vincent Giordano. Pursuant to the Eastern Standard Asset Purchase Agreement, Eastern Standard Delaware will purchase from Eastern Standard Pennsylvania all of Eastern Standard Pennsylvania’s assets utilized in the operation of its business of providing digital marketing services, including integrated branding, and digital customer experiences (the “ES Business Assets”).
Current report
Pursuant to the Eastern Standard Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Eastern Standard Pennsylvania agreed to sell to Eastern Standard Delaware the ES Business Assets, all as more fully described in the Eastern Standard Asset Purchase Agreement. The aggregate purchase price for the ES Business Assets was $2,160,000. As of the closing, the Company owns 70% of Eastern Standard Delaware in exchange for $1,250,000 payable pursuant to two secured promissory notes which are guaranteed by the Company, and $410,000 of the Company’s Series A Preferred Shares. The entities comprising the Company’s special purpose vehicle funding program owns an aggregate of 20% of Eastern Standard Delaware in exchange for $500,000 payable in cash. Eastern Standard Pennsylvania owns a 10% roll-over equity interest in Eastern Standard Delaware. The acquisition closed on October 18, 2024.
Current report
The secured promissory notes consist of: (i) a $400,000 promissory note made by Eastern Standard Delaware in favor of Eastern Standard Pennsylvania with an interest at 8% per annum providing for interest only payments with a balloon payment of principal and interest at the end of one hundred twenty (120) days (“Short Term ES Promissory Note”); (ii) an $850,000 promissory note made by Eastern Standard Delaware in favor of Eastern Standard Pennsylvania with an interest rate at 8% per annum providing for interest only payments with a balloon payment of principal and interest at the end of two years (“ES Promissory Note”); and (iii) a Guaranty Agreement made by the Company to secure the payment of Eastern Standard Delaware pursuant to the Short Term ES Promissory Note, the ES Promissory Note and the other obligations of the Company and Eastern Standard Delaware under the Eastern Standard Asset Purchase Agreement.
Current report
Nine Months Ended September 30, 2024 compared to the Nine Months Ended September 30, 2023
Current report
Also, see Note 11 – Subsequent Events for additional contractual commitments.
Removed paragraphs (9)
Previous report
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 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.
Previous 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.
Previous 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.
Previous report
Our team remains dedicated to achieving our goals of reaching profitability, focusing on completing accretive SPV-funded acquisitions and optimizing our financial position.
Previous report
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 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.
Previous 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.
Previous report
Six Months Ended June 30, 2024 compared to the Six Months Ended June 30, 2023
Reworded paragraphs (19)
Previous wording
Onfolio Holdings Inc. was incorporated on July 20, 2020 under the laws of Delaware to acquire and develop high-growth and profitable websites. Unless the context otherwise requires, all references to "our Company,” "we,” "our” or "us” and other similar terms means Onfolio Holdings Inc., a Delaware corporation, and our wholly owned subsidiaries.
Current wording
Onfolio Holdings Inc. was incorporated on July 20, 2020 under the laws of Delaware to acquire and develop high-growth and profitable websites. Unless the context otherwise requires, all references to "our Company,” "we,” "our” or "us” and other similar terms means Onfolio Holdings Inc., a Delaware corporation, and our wholly- and majority-owned subsidiaries.
Previous 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.
Current wording
The first nine months of 2024 reflected significant improvements in our revenue, and net loss. Our cash used in operations for the nine months decreased to $696,715, marking the lowest use of cash for operating activities since our initial public offering in August 2022, compared to $2,160,796 during the same period in 2023.
Previous wording
We still have a strong acquisition pipeline and are actively working towards completing these transactions.
Current wording
We continue to maintain a strong acquisition pipeline and are actively working towards completing these transactions.
Previous 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:
Current wording
The Company reported a net loss of $497,759 for the three months ended September 30, 2024 compared to a net loss of $4,733,159 for the three months ended September 30, 2023. The components of the decrease in net loss for the current period are as follows:
Previous 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.
Current wording
Revenue increased by $698,461, or 53% for the three months ended September 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 and our DDS Rank acquisition completed at the end of the second quarter of fiscal 2024, which increased revenue by approximately $71,000. 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
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 wording
Cost of revenue increased by $340,501, or 73% 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 slightly in the current period compared to the prior period. 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 $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 wording
General and Administrative expenses decreased by $58,267, or 4% during the three months ended September 30, 2024 compared to 2023. The decrease was primarily due to a decrease in advertising and marketing costs of $88,000, and a decrease in stock-based compensation expense of $80,000 and decrease in contractor and compensation costs of $84,000, offset by an increase in other general and administrative costs of $44,000, including travel and merchant fees, and an increase in amortization expenses of $147,000 associated with the acquired intangible assets not present in the comparable period.
Previous 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.
Current wording
Professional fees decreased by $22,471, or 10% during the three months ended September 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 $18,979 in acquisition costs during the three months ended September 30, 2024 compared to $77,525 during the three months ended September 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 $22,618 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.
Current wording
Total other expense was $12,281 during the three months ended September 30, 2024 compared to other income of $7,464 during the three months ended September 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
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 wording
The Company reported a net loss of $1,909,993 for the nine months ended September 30, 2024 compared to a net loss of $7,311,359 for the nine months ended September 30, 2023. The components of the decrease in net loss for the current period are as follows:
Previous wording
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 wording
Revenue increased by $1,350,185, or 34% for the nine months ended September 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 and our DDS Rank acquisition completed at the end of the second quarter of fiscal 2024, which increased revenue by approximately $71,000. 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
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.
Current wording
Cost of revenue increased by $571,242, or 36% 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 remained about the same in the current period compared to the prior period despite the increase in agency service revenue due to the Company’s efforts to streamline operations and create efficiencies. 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 $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.
Current wording
General and Administrative expenses decreased by $408,268, or 9% during the nine months September 30, 2024 compared to 2023. The decrease was primarily due to a decrease in advertising and marketing costs of $332,000, and a decrease in stock-based compensation expense of $518,000, offset by a $30,000 increase in other general and administrative costs including travel and merchant fees, an increase in amortization expense of $341,000 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
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 wording
Professional fees decreased by $248,854, or 29% during the nine months September 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 $122,266 in acquisition costs during the nine months ended September 30, 2024 compared to $285,532 during the nine months ended September 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 $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.
Current wording
Total other expense was $57,346 during the nine months September 30, 2024 compared to other income of $88,457 during the nine months September 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
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.
Current wording
As of September 30, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $363,244 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 $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.
Current wording
Net cash used in operating activities was $696,715 and $2,160,796 for the nine months ended September 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 $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.
Current wording
Net cash used in investing activities was $304,000 and $850,000 for the nine months ended September 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 $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.
Current wording
Cash flows provided by financing activities was $480,218 for the nine months ended September 30, 2024 compared to cash used in financing activities of $269,522 during the nine months ended September 30, 2023. During the 2024 period, we received $732,300 in proceeds from notes payable and we paid $234,596 in dividends to preferred stockholders and made payments totaling $238,046 on notes payable. During the 2023 period, we paid $160,563 in dividends to preferred stockholders and made payments totaling $68,959 on notes payable.