Onfolio Holdings, Inc
For the period ended Mar 31, 2025. Filed May 15, 2025.
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.
Mar 31, 2025 · Filed May 15, 2025
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 2024-09-30; filed 2024-11-14.
0001654954-24-014446
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001654954-25-005773
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 83 previous paragraphs and 76 current paragraphs.
44 unchanged; 14 reworded; 18 added; 21 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 6 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 (18)
Current report
The first quarter of 2025 continued the positive trajectory we’ve been building over the past year, with strong performance across revenue, gross profit, operational efficiency and organic growth. Revenue for the quarter reached $2.8M, up from $1.5M in the same period last year, signifying an 87% increase. Notably, February marked the first time we crossed $1M in monthly revenue.
Current report
Cash used in operations decreased to $145k, compared to $431k in Q1 2024, reflecting improvements in both operational discipline and revenue contribution. Our cash balance also increased approximately 40% year-over-year, supported by a successful preferred share raise during Q1, which further strengthened our financial position.
Current report
While our net loss increased from $477k in Q1 2024, to $806k in Q1 2025, $272k of this was stock-based-compensation, most of which was a one-time expense, as well as $175k in higher amortization expense compared to the prior year. Taking these non-cash increases into account, our net loss improved year-on-year.
Current report
Further, in Q1 we continued our work on reducing costs across both the portfolio and the parent company. In addition to further operational streamlining, we identified several opportunities to merge functions, and facilitate cross-selling across the portfolio.
Current report
We are also seeing organic revenue growth at several of our key properties, and we believe this momentum moves us further towards monthly profitability as we move deeper into 2025.
Current report
Business Segment Results of Operations
Current report
We operate in two business segments: Business to Business (“B2B”) and Business to Consumers (“B2C”). We organize our business segments based on the nature of products and services offered, and the economic characteristics of each segment. Following is a brief description of the activities of our business segments:
Current report
Selected Financial Data by Business Segment
Current report
Net sales and operating profit of the Company’s business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. Sales, cost of sales and operating profit for each of our business segments were as follows:
Current report
Management evaluates performance on our contracts by focusing on net sales and operating profit and not by type or amount of operating expense. Consequently, our discussion of business segment performance focuses on net sales and operating profit, consistent with our approach for managing the business. This approach is consistent throughout the life cycle of our contracts, as management assesses the bidding of each contract by focusing on net sales and operating profit and monitors performance on our contracts in a similar manner through their completion.
Current report
B2B
Current report
Our B2B segment includes the results of operations of Eastern Standard, RevenueZen, DDS Rank, SEO Butler, Contentellect, and DealPipe. These entities share similar characteristics such as customers being businesses and being primarily service-related revenue.
Current report
B2B total operating income decreased by $177,770 or 140% during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was a result of the increased revenue and gross profit offset by the increase in intangible asset amortization for the newly acquired businesses in the year ended 2024.
Current report
B2C
Current report
Our B2C segment includes the results of operations of Proofread Anywhere, Onfolio Assets, Mighty Deals, and Vital Reaction. These entities share characteristics such as the end customers being individual consumers, and sales being more focused on product sales, including digital sales.
Current report
B2C revenue increased by $209,249 or 23% during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to an increase in digital product sales within the Company’s Proofread Anywhere subsidiary.
Current report
B2C incurred total operating income of $228,158 during the three months ended March 31, 2025 compared to an operating income of $153,759 during the three months ended March 31, 2024, primarily due to the increase in sales from the Proofread Anywhere subsidiary.
Current report
First Page Acquisition: The Company agreed to pay a revenue share amount equal to 18% of gross revenues for the acquired customers for 3 years following the acquisition date. As of March 31, 2025, the Company estimated the remaining obligations owed under the revenue share provisions to be $148,943 resulting in a change in the fair value of the continent consideration of $55,511.
Removed paragraphs (21)
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Recent Developments
Previous 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.
Previous 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”).
Previous 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.
Previous 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.
Previous report
Nine Months Ended September 30, 2024 compared to the Nine Months Ended September 30, 2023
Previous report
Revenues
Previous report
Cost of Revenue
Previous report
Operating Expenses
Previous report
Selling, General and Administrative
Previous report
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 report
Professional Fees and Acquisition Costs
Previous report
Other Income and expense
Previous report
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 report
The Company has entered into two asset purchase agreements which includes contingent earn-out payments based on specific performance criteria.
Previous report
Also, see Note 11 – Subsequent Events for additional contractual commitments.
Reworded paragraphs (14)
Previous wording
We continue to maintain a strong acquisition pipeline and are actively working towards completing these transactions.
Current wording
On the acquisition front, we continue to maintain a strong acquisition pipeline, and are actively working towards completing new transactions.
Previous wording
Management remains committed to continuous improvement and achieving profitability by focusing on optimizing our financial position and completing accretive acquisitions.
Current wording
Management remains committed to continuous improvement and achieving profitability by focusing on executing our strategy with discipline, improving our financial performance and completing accretive acquisitions.
Previous 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:
Current wording
The Company reported a net loss of $806,428 for the three months ended March 31, 2025 compared to a net loss of $477,826 for the three months ended March 31, 2024. The components of the increase in net loss for the current period are as follows:
Previous 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.
Current wording
Revenue increased by $1,225,041, or 77% for the three months ended March 31, 2025 compared to 2024. The increase is primarily due to revenue from our Eastern Standard acquisition completed during the fourth quarter of fiscal 2024, which increased revenue by approximately $917,500 and our DDS Rank acquisition completed at the end of the second quarter of fiscal 2024, which increased revenue by approximately $52,500. In addition, our digital product sales increased by approximately $230,000 under our Proofread anywhere subsidiary as a result of a change in business marketing strategy.
Previous 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.
Current wording
Cost of revenue increased by $522,257, or 90% due to the Company’s recent acquisitions which increased cost of service revenue, partially offset by a reduction in cost of product sales revenue. This reduction was driven by a strategic shift in the Company’s marketing approach for certain subsidiaries, emphasizing advertising (recorded under operating expenses), and reducing reliance on affiliate sales (recorded under cost of revenue). Lower product sales from the Mighty Deals and Vital Reaction subsidiaries also contributed to the offset. 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 $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.
Current wording
General and Administrative expenses increased by $1,036,163, or 87% during the three months ended March 31, 2025 compared to 2024. The increase was primarily due to an increase in advertising and marketing costs of $328,000, an increase in stock-based compensation expense of $255,000, increase in contractor and compensation costs of $142,000, increase in other general and administrative costs of $135,000, including travel and merchant fees, and an increase in amortization expenses of $176,000 associated with the acquired intangible assets not present in the comparable period.
Previous 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.
Current wording
Professional fees increased by $57,715, or 32% during the three months ended March 31, 2025 compared to 2024 primarily due to increased legal and accounting costs associated with the Company’s compliance requirements as a public company. The Company also incurred $33,410 in acquisition costs during the three months ended March 31, 2025 compared to $94,341 during 2024, 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 $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.
Current wording
Total other expense was $38,405 during the three months ended March 31, 2025, compared to other expense of $22,447 during 2024. The increase in other income was driven by an increase in interest expense from increased loan balances.
Previous 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.
Current wording
B2B revenue increased by $1,015,792 or 150% during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to revenue from our DDS Rank acquisition completed at the end of the second quarter of fiscal 2024, which increased revenue by approximately $52,500, and our Eastern Standard acquisition completed during the fourth quarter of fiscal 2024, which increased revenue by approximately $917,500.
Previous 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.
Current wording
Our primary source of operating cash inflows are payments from portfolio companies. In addition, the Company has raised $1,300,000 pursuant to a private offerings of Series A preferred stock through March 31, 2025, $618,000 in notes payable and repaid $2,164,498 on its acquisition notes.
Previous 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.
Current wording
Net cash used in operating activities was $145,049 and $431,007 for the three months ended March 31, 2025 and 2024, 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 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.
Current wording
Net cash used in investing activities was $0 and $250,000 for the three months ended March 31, 2025 and 2024, respectively. The cash used in investing activities was primarily for the purchase of businesses in the prior period and additional cost method investments.
Previous 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.
Current wording
Cash flows provided by financing activities was $297,831 for the three months ended March 31, 2025 compared to cash provided by financing activities of $264,135 during the three months ended March 31, 2024. During the 2025 period, we received $700,000 in proceeds from sales of Series A preferred stock and we paid $99,250 in dividends to preferred stockholders, made payments totaling $176,624 on notes payable, made payments totaling $108,475 related to contingent consideration and made distributions totaling $17,820 to our non-controlling interest holders. 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
Previous wording
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 September 30, 2024, no earn-out payments have been made. (See Note 10 for further details.)
Current wording
RevenueZen Acquisition: The Company has determined the final amount obligated to pay to the sellers of RevenueZen, contingent upon the business achieving a specified gross profit threshold within one year to be $680,662. On February 28, 2025, the Company and the RevenueZen sellers agreed to the final earn-out amount to be $682,000 and modified the payment terms to be paid with a cash payment of $72,000, $100,000 to be paid through profit sharing by using 30% of Net Operating Income, $100,000 in value for $79,240 stock options to purchase shares of common stock, $70,000 in Series A preferred stock, and $340,000 in a promissory note. The promissory note, has a term of 60 months and accrues interest at 19%. The stock options have an exercise price of $1.34, have a term of 10 years, and are vested immediately. As of March 31, 2025, the Company estimated the remaining obligations owed under the revenue share obligation to be $100,000,
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried 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.
Previous report — wording carried elsewhere
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.