Onfolio Holdings Inc. Announces Third Quarter 2023 Financial Results and Provides Corporate Update
Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW) Announces Financial Results for Q3 2023, Reveals 273% Revenue Growth and 526% Gross Profit Increase
Positive
Impressive 273% year-over-year revenue growth in Q3 2023
Significant 526% increase in gross profit with a 64.5% gross margin
Strategic initiatives to manage operating expenses and achieve profitability
Successful raise of over $1 million for acquisitions and growth capital
Negative
Substantial 397% increase in total operating expenses, including impairment charges
Net loss to common shareholders expanded to $4.79 million in Q3 2023
11/14/2023 - 04:15 PM
WILMINGTON, Del., Nov. 14, 2023 (GLOBE NEWSWIRE) -- 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, $0.00 1 per value, 5,000,000 shares authorized Series A Preferred stock, $0.00 1 par value, 1,000,000 shares authorized, 69,660 issued and outstanding at September 30, 2023 and December 31, 2022; 70 70 Common stock, $0.00 1 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
What were Onfolio's revenue and gross profit growth in Q3 2023?
In Q3 2023, Onfolio's revenue grew 273% year-over-year to $1.31 million, and gross profit grew 526% to $0.85 million with a 64.5% gross margin.
How did Onfolio manage its operating expenses in Q3 2023?
Onfolio focused on managing operating expenses, aiming to achieve profitability, and announced cost-saving initiatives to lower expenses in the fourth quarter.
What was the impact of the raise of over $1 million announced by Onfolio?
The raise of over $1 million through the sale of preferred shares and promissory notes will be used for product or business acquisitions, emphasizing growth capital for sustainable opportunities.