美国
证券交易委员会
华盛顿特区20549
表格
(标记一个)
根据1934年证券交易法第13或15(d)条款的季度报告。 |
截至2024年6月30日季度结束
或
根据1934年证券交易法第13或15(d)条款的过渡报告 |
针对过渡期间从 _________到 ___________
委员会档案编号：
（根据其章程所指定的正式名称） |
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(成立州或其他管辖区) 成立或组织证明文件) |
| (国税局雇主 识别号码) |
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(总部办公地址) |
| (邮递区号) |
(
(注册人电话号码，包括区号)
根据法案第12(b)条规定注册的证券：
每种类别的名称 |
| 交易标的（s） |
| 每个注册交易所的名称 |
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购买普通股的warrants |
| ONFOW |
| 纳斯达克资本市场 |
请勾选以下项目，以判定在过去12个月(或更短期间，该注册人被要求提交报告)内所有根据1934年证券交易法第13条或第15(d)条要求提供报告的报告是否已经提交，并且该注册人在过去90天中是否受到提交报告的要求。
请在选框内打勾，确认注册人是否在过去12个月内（或注册人需要提交此类文件更短的期限内）根据Regulation S-t第405条规定提交了必须提交的所有互动数据文件。
请在方框内勾选申报者是否为大型快速申报者、快速申报者、非快速申报者、较小型报告公司或新兴成长公司。在《交易所法》第120亿2条中，请查看「大型快速申报者」、「快速申报者」、「较小型报告公司」和「新兴成长公司」的定义。
大型加速归档人 | ☐ | 加速归档人 | ☐ |
☒ | 小型报告公司 | ||
|
| 新兴成长型企业 |
如果一家新兴成长公司，请打勾表示该公司已选择不使用符合《交易所法》第13(a)条的进阶过渡期，以遵守任何新的或修订的财务会计准则。
在核准的名册是否属于壳公司（如股市法规第1202条所定义之意义）方面，请用勾选符号表示。是
截至2024年11月14日，普通股的发行股数为
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第一部分. 财务资讯 |
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| 2 |
| 内容表 |
关于前瞻性声明的警示
这份10-Q表格报告包含前瞻性声明。前瞻性声明涉及风险和不确定性，如关于我们计划、目标、期望、假设或未来事件的声明。在某些情况下，您可以通过术语如“预计”、“估计”、“计划”、“项目”、“持续”、“进行中”、“期望”、“我们相信”、“我们打算”、“可能”、“应该”、“将”、“可能”等类似表达未来发生不确定性或可能发生的行动的前瞻性声明。这些声明涉及估计、假设、已知和未知的风险、不确定性以及可能导致实际结果与前瞻性声明中表达或暗示的任何未来结果、业绩或成就大相径庭的因素。您不应过分依赖这些前瞻性声明。
前瞻性声明的示例包括但不限于：
| ● | 未来产品或服务开发的预期时间； |
| ● | 成本、营业收入、收益、资本结构和其他财务条目的预测； |
| ● | 我们的计划和目标说明； |
| ● | 关于我们业务运营能力的声明； |
| ● | 预期未来经济表现的声明; |
| ● | 关于我们市场竞争的声明; 和 |
| ● | 关于我们或我们业务声明的基本假设。 |
前瞻性声明既不是历史事实，也不是对未来业务表现的保证。相反，它们仅基于我们目前对未来的信念、期望和假设，涉及我们业务的未来、未来计划和策略、预期事件和趋势、经济和其他未来状况。由于前瞻性声明涉及未来，它们受固有的不确定性、风险和难以预测的环境变化的影响，其中许多在我们的控制范围之外。我们的实际结果和财务状况可能与前瞻性声明中所示有实质性的差异。因此，您不应依赖于任何这些前瞻性声明。可能导致我们的实际结果和财务状况与前瞻性声明中所示有实质性差异的重要因素包括，但不限于下列因素：
| ● | 我们管理目前和预期财务状况以及估计的现金消耗率的能力，包括我们对支出、未来收入和资本需求的估计，最终我们作为持续经营者的能力； |
| ●
| 我们筹集额外资金或其他资金以进一步发展和扩大我们的业务，实现我们的长期业务目标的能力。我们的收入有限，我们无法预测何时或者是否将实现重大收入和持续盈利能力； |
| ● | 我们实现重大收入和持续盈利能力的能力； |
| ● | 商誉和长期资产的减值； |
| ● | 客户需求变化； |
| ● | 我们能够成本效益地发展品牌，吸引新客户并以成本效益的方式保留客户； |
| ● | 我们在网站参与的市场中竞争的能力； |
| ● | 我们制定战略行动的能力，包括收购和处置以及成功整合收购业务的能力； |
| ● | 我们在合并基础上成功管理网站的能力； |
| ● | 安全漏洞、网络安全攻击和信息技术系统的其他重大破坏事件； |
| ● | 法律法规的发展和变化，包括通过立法行动和修订规则和标准对我们行业的增加监管； |
| ● | 敌对行动、政治动荡或灾难性事件和战争的发生； |
| ● | 我们的股票和纳斯达克资本市场上的warrants挂牌和交易能力，以及如果我们未能做到这一点对我们业务的潜在影响； |
| ● | 诸如极端天气、火灾、洪水和地震等自然事件，或人为或其他对我们运营系统、设施或设备造成的干扰； |
| ● | 与环境、社会和治理（esg）事项有关的风险以及相关成本，包括相关法规活动的范围和步伐； |
| ● | 公司可能面临的其他风险； |
| ● | 其他因素在公司控制之外。 |
这些前瞻性声明的最终正确性依赖于许多已知和未知的风险和事件。我们在公司截至2023年12月31日的年度报告的第一部分第1.A项“风险因素”以及本报告的第二部分第1.A项“风险因素”中讨论了我们已知的重大风险。许多因素可能导致我们的实际结果与前瞻性声明存在重大差异。此外，我们无法评估每个因素对我们业务的影响，或者任何因素或组合因素可能导致实际结果与任何前瞻性声明中的结果存在重大差异的程度。
前瞻性声明仅在其制作之日起生效，除非法律要求，我们不会有义务更新任何前瞻性声明以反映在声明发布之日后发生的事件或情况，或反映意外事件的发生。
| 3 |
| 目录 |
项目1.基本报表。
Onfolio Holdings, Inc. | ||||||||
所得税 $408 $712 $1,860 $1,890 360 % 163 %资产负债表 | ||||||||
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资产 |
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流动资产： |
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现金 |
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应收账款，净额 |
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存货 |
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预付款项及其他流动资产 |
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流动资产合计 |
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无形资产 |
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商誉 |
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应收关联方款项 |
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投资未纳入合并报表的合营企业，成本法 |
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投资未纳入合并报表的合营企业，权益法 |
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其他资产 |
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总资产 |
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负债和股东权益 |
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流动负债: |
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应付账款及其他流动负债 |
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应付股息 |
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应付票据，短期 |
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附带条件 |
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递延收入 |
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总流动负债 |
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应付票据 |
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应付票据 - 关联方 |
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总负债 |
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承诺和事项（注释10） |
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股东权益： |
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优先股，$0.0001 |
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A 级优先股，每股面值$ |
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普通股，每股面值为 $0.0001； |
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追加实收资本 |
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累计其他综合收益 |
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累积赤字 |
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Total Onfolio Inc.股东权益 |
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非控制者权益 |
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股东权益总计 |
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负债和股东权益总计 |
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附注是这些未经审计的合并财务报表的重要组成部分 | ||||||||
| 4 |
| 目录 |
Onfolio Holdings, Inc. | ||||||||||||||||
截至2020年6月30日和2019年6月30日三个月和六个月的营业额 | ||||||||||||||||
(未经审计) | ||||||||||||||||
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| 截至9月30日三个月的情况 |
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| 截至9月30日九个月期间 |
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营业收入, 服务 |
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营业收入, 产品销售 |
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营业总收入 |
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服务收入成本 |
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产品销售成本 |
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总成本费用 |
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毛利润 |
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销售、一般及行政费用 |
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收购成本 |
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商誉和无形资产减值 |
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总营业费用 |
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营业损失 |
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其他收入（费用） |
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权益法收益（亏损） |
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股息收入 |
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利息收入（费用），净额 |
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其他收入 |
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其他收入（支出）总额 |
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税前损失 |
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所得税（负债）益额 |
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净亏损 |
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归因于非控制利益的净亏损 |
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Onfolio Holdings Inc.归属净损失 |
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优先股股息 |
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普通股股东净损失 |
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每股普通股东应承担的净亏损 |
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基本和摊薄 |
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加权平均每股流通量 |
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基本和摊薄 |
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附注是这些未经审计的合并财务报表的组成部分 | ||||||||||||||||
| 5 |
| 目录 |
Onfolio Holdings，Inc。 | |||||||||||||||||||||||||||||||||||||||||||||
所得税 $408 $712 $1,860 $1,890 360 % 163 %股东权益变动表 | |||||||||||||||||||||||||||||||||||||||||||||
2024年和2023年9月30日止三个和九个月 | |||||||||||||||||||||||||||||||||||||||||||||
(未经审计) | |||||||||||||||||||||||||||||||||||||||||||||
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| 累计其他 |
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| Preferred Stock，$0.001面值 |
|
| 普通股，面值0.001美元 |
|
| 额外的 |
|
| 累积赤字 |
|
| 全面的 |
|
| 控制 |
|
| 股东权益 |
| ||||||||||||||||||||||||
|
| 股份 |
|
| 金额 |
|
| 股份 |
|
| 金额 |
|
| 实收资本 |
|
| 赤字 |
|
| 收入 |
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| 利息 |
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| 权益 |
| ||||||||||||||||||
|
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|
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|
|
|
|
|
| ||||||||||||||||||
2023年12月31日余额 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
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| |||||||||||||||||
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| - |
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|
|
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|
|
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|
|
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| |||||||||
业务收购 |
|
|
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|
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|
|
| - |
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| |||||||||||||||||
出售优先股以换取现金 |
|
|
|
|
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|
|
| - |
|
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基于股票的补偿 |
|
| - |
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|
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| ||||||||||||||||
优先股分红 |
|
| - |
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| - |
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| ( | ) |
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外汇翻译 |
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| - |
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| ( | ) |
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| ( | ) | ||||||||||||||
净亏损 |
|
| - |
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| - |
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| ( | ) |
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|
|
|
|
| |||||||||
2024 年 3 月 31 日余额 |
|
|
|
|
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|
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| ( | ) |
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| |||||||||||||||||
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|
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| - |
|
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| - |
|
|
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|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||||||||
业务收购 |
|
|
|
|
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|
|
| - |
|
|
|
|
|
|
|
|
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|
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| |||||||||||||||||
基于股票的补偿 |
|
| - |
|
|
|
|
|
| - |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
行使期权发行的普通股 |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
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|
|
| ||||||||||||||||
优先股分红 |
|
| - |
|
|
|
|
|
| - |
|
|
|
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|
|
|
|
| ( | ) |
|
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|
| ( | ) | ||||||||||||||
外汇翻译 |
|
| - |
|
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| - |
|
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|
|
|
|
|
|
|
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|
|
|
|
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| |||||||||||||||
分配给非控股权益 |
|
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|
|
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|
|
|
|
|
|
|
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|
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| ( | ) |
|
| ( | ) | |||||||||
净亏损 |
|
| - |
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| - |
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| ( | ) |
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|
|
|
|
|
| |||||||||
余额，2024年6月30日 |
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
| ( | ) |
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| |||||||||||||||||
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|
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|
|
|
| |||||||||
优先股出售所得款项 |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
通过行权期权收到的现金 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
基于股票的补偿 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
优先股分红 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||||||||||
外汇翻译 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
| ( | ) | |||||||||||||
分配给非控股权益 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||||||||
净亏损 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
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| ( | ) | |||||||||||||
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|
|
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|
|
|
|
|
|
|
|
|
|
| |||||||||
余额，2024年9月30日 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
2022年12月31日余额 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
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|
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|
| |||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
基于股票的补偿 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
优先股分红 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||||||||||
外汇翻译 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||||||||||||||
净亏损 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
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|
| ( | ) | ||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
2023年3月31日的结存 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
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| |||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
基于股票的补偿 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
优先股分红 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||||||||||
外汇翻译 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
净亏损 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
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| ( | ) | ||||||||||||||
|
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|
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|
|
|
|
|
|
| |||||||||
余额，2023年6月30日 |
|
|
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|
|
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|
|
|
|
|
|
| ( | ) |
|
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| |||||||||||||||||
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
| |||||||||
基于股票的补偿 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
优先股分红 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||||||||||
外汇翻译 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||||||||||||||
净亏损 |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
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| ( | ) | ||||||||||||||
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
| |||||||||
余额，2023年9月30日 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
| |||||||||
附注是这些未经审计的综合财务报表的组成部分 | |||||||||||||||||||||||||||||||||||||||||||||
| 6 |
| 目录 |
Onfolio Holdings Inc. | ||||||||
合并现金流量表 | ||||||||
截至2024年9月30日和2023年9个月的财务情况 | ||||||||
(未经审计) | ||||||||
|
|
|
|
|
| |||
|
| 2024 |
|
| 2023 |
| ||
经营活动产生的现金流量 |
|
|
|
|
|
| ||
净亏损 |
| $ | ( | ) |
| $ | ( | ) |
调整将净亏损与用于运营活动的净现金相调和： |
|
|
|
|
|
|
|
|
基于股票的薪酬费用 |
|
|
|
|
|
| ||
权益法（收入）/损失 |
|
|
|
|
| ( | ) | |
从权益法投资中获得的分红派息 |
|
|
|
|
|
| ||
无形资产摊销 |
|
|
|
|
|
| ||
无形资产减值 |
|
|
|
|
|
| ||
净变动： |
|
|
|
|
|
|
|
|
应收账款 |
|
| ( | ) |
|
|
| |
存货 |
|
|
|
|
| ( | ) | |
预付款项及其他流动资产 |
|
| ( | ) |
|
|
| |
应付账款及其他流动负债 |
|
|
|
|
| ( | ) | |
由于合资企业 |
|
|
|
|
| ( | ) | |
递延收入 |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
用于经营活动的净现金 |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
投资活动产生的现金流量 |
|
|
|
|
|
|
|
|
按成本法投资支付的现金 |
|
| ( | ) |
|
|
| |
用于收购企业支付的现金 |
|
| ( | ) |
|
| ( | ) |
对数字货币的投资 |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
投资活动中使用的净现金 |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
筹资活动产生的现金流量 |
|
|
|
|
|
|
|
|
优先股A系列的销售收益 |
|
|
|
|
|
| ||
行使期权的收益 |
|
|
|
|
|
|
| |
支付的优先股股利 |
|
| ( | ) |
|
| ( | ) |
分配给无控制权益持有人的款项 |
|
| ( | ) |
|
|
| |
收购应付票据的付款 |
|
|
|
|
| ( | ) | |
票据应收款的收入 |
|
|
|
|
|
| ||
应付票据支付 |
|
| ( | ) |
|
| ( | ) |
从关联方获得的票据应付款项的收益 |
|
|
|
|
|
| ||
应付票据支付 – 关联方 |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
融资活动提供的净现金 |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
受外币汇率变动的影响 |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
现金净增加额 |
|
| ( | ) |
|
| ( | ) |
期初现金 |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
期末现金及现金等价物余额 |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
支付现金: |
|
|
|
|
|
|
|
|
所得税 |
| $ |
|
| $ |
| ||
利息 |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
补充非现金披露 |
|
|
|
|
|
|
|
|
为收购而发行的票据 |
| $ |
|
| $ |
| ||
为收购而发行的优先股 |
| $ |
|
| $ |
| ||
为收购而发行的或有对价 |
| $ |
|
| $ |
| ||
为收购而发行的普通股期权 |
| $ |
|
| $ |
| ||
用于收购的非控制性权益 |
| $ |
|
| $ |
| ||
因转换期权而发行的普通股 |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
附带的说明是这些未经审计的合并基本报表不可或缺的一部分 | ||||||||
| 7 |
| 目录 |
ONFOLIO HOLDINGS INC.
基本报表附注
截至2024年和2023年9月30日的九个月
(未经审计)
附注1 - 业务性质和组织
Onfolio Holdings Inc.（“公司”）于2020年7月20日根据特拉华州的法律成立，以收购和发展高增长和盈利的互联网业务。该公司主要通过网站管理、广告以及在其网站上的内容放置和特定网站上的产品销售来赚取营业收入。公司拥有多个网站，并代表持有股权的特定非合并实体管理网站。
注意事项2-主要会计政策摘要
创课推荐基本报表原则和合并原则。
附带的综合财务基本报表及相关附注，已根据美国公认会计准则（“U.S. GAAP”）的期中信息和根据美国证券交易委员会（“SEC”）第10-Q表格和S-X法规第8条的规定编制。公司的财政年度截止于12月31日。根据SEC的期中财务报告规则和规定，按照GAAP编制的财务报表通常包含的某些信息或脚注披露已经被简化或省略。因此，它们不包括财务状况、经营结果或现金流量的完整呈现所必需的所有信息和脚注。在管理层的意见中，附带的未经审计的财务基本报表包括所有调整，其中包括为了对所呈现的期间的财务状况、经营结果和现金流量进行公正呈现而必要的一般性经常性调整。附带的未经审计的综合财务基本报表应与公司于2024年4月1日向SEC提交的年度报告10-k一起阅读。截至2024年9月30日的九个月的期间的中期结果未必能反映将于2024年12月31日或未来任何期间望料的结果。
公司的综合财务报表包括其全资和控股子公司以及其他受控实体的账目。公司的全资子公司包括Onfolio LLC、 Vital Reaction, LLC、 Mighty Deals LLC、 Onfolio 资产, LLC、 Onfolio Management, LLC、 WP Folio, LLC、 Proofread Anywhere, LLC、 Contentellect, LLC、 SEO Butler Limited、 Eastern Standard LLC 和 DealPipe, LLC。公司还在DDS Rank, LLC和RevenueZen, LLC拥有绝对控股权。所有公司间交易和余额在合并中已经被消除。
外币翻译
公司及其大部分子公司均以美元维护其会计记录。公司的运营子公司SEO Butler位于英国，以英镑维护其会计记录，这是其功能货币。子公司的资产和负债以汇率转换成美元，并按资产负债表日的汇率计算权益账户，而按历史汇率计算营收和支出，其间通过使用期间的平均汇率进行转换。翻译调整作为其他全面收益（亏损）的单独组成部分报告在综合损益的合并财务报表中。以外币计价的交易以接近交易日期的汇率转换。
| 8 |
| 目录 |
对未合并实体的投资 - 权益法和成本法投资
我们会对能够对运营和财务政策施加重大影响的实体进行投资会计处理，通常持有%或更少的股权。
根据权益法核算，目前对未纳入合并的联营企业的投资包括一个
可变利益实体
变量利益实体（“VIEs”）在投资者是主要受益人时进行合并。主要受益人是VIE的变量利益持有人，具有指导最显著影响VIE经济绩效的活动的权力并有吸收损失的义务，或者有权获得对VIE可能具有重大意义的利益。管理层得出结论，根据ASC 810的要求，合资企业不符合变量利益实体的资格，因为合资企业1）有足够的股本来为其经营活动提供资金；2）有股东作为一个群体具有控制金融权益的特征，可以通过以多数表决权投票来改变各自合资企业的管理成员，并且3）结构设计具有实质性投票权。公司根据每个实体的股本所有权，按成本法或权益法对其在合资企业的投资进行核算。
公司通过其子公司Onfolio Management LLC，担任Onfolio Agency SPV, LLC（“OA SPV”）和Onfolio Agency SPV 2, LLC（“OA SPV 2”）的管理人，合称“OA SPVs”。公司不持有OA SPVs的任何股权，但将获得由OA SPV支付的任何现金分配的10%，以及由OA SPV 2支付的任何现金分配的20%，作为管理费。公司可以通过成员的一致投票将其从OA SPVs的管理人中解除。公司认定，其作为管理人可能获得的费用不构成对OA SPVs的变量权益，并将根据ASC 606将其作为营业收入合同计算。
公司通过其子公司RevenueZen，LLC，担任CliAquire，LLC（“CliAquire”）的经理。 公司持有CliAquire 5%的成员权益，并将根据其成员权益获得利润分配。 公司可以通过成员的绝大多数投票被免去担任CliAquire经理的职务。 公司确定将CliAquire投资列入成本法投资。
使用估计
根据美国通行会计准则准备财务报表需要管理层进行估计和假设，这些估计和假设影响资产和负债在资产负债表日期报告的金额。公司在评估变量利益实体的控制、递延税资产的估值和长期资产减值时，使用重要判断。实际结果可能与这些估计有所不同。
现金及现金等价物
现金及现金等价物包括现金、在银行的活期存款以及原始到期不超过三个月的流动投资。
存货
存货按实际成本或净可回收价值的较低者计价。成本采用先进先出法（FIFO）确定。
| 9 |
| 目录 |
长期资产
公司对收购的有限寿命无形资产在其预计使用寿命内进行摊销。开多无限寿命无形资产不进行摊销，但需每年进行减值测试。根据ASC 360“物业、厂房和设备”的规定，公司在全年内或者在事件或情况变化表明资产的账面价值可能无法收回时，审查可摊销无形资产和长期资产的账面价值以进行减值测试。
资产的可复原性是通过将其账面价值与资产或资产组预计产生的未折现现金流进行比较来衡量的。如果被视为受损的资产，则应按该财产的账面价值（如有）超过其公允市场价值的金额来衡量确认减值。
收入确认
公司遵循FASB ASC 606《客户合同的营业收入》指南，以修正后的追溯法处理所有合同。
营业收入是基于以下五个步骤模型确认的：
| - | 识别与客户签订的合同 |
| - | 确定合同中的履行承诺。 |
| - | 确定交易价格。 |
| - | 对合同中的履行承诺的交易价格进行分配。 |
| - | 在公司履行绩效义务的时候或据此拥有资格以及类似财务原则性的规定中，确认收入 |
该公司主要通过网站管理、数字服务、在线业务的广告和内容投放、产品销售和数字产品销售来赚取收入。管理服务收入是在提供服务时按月获得和确认的。根据客户要求在公司网站上展示内容后，即可获得和确认广告和内容收入。产品销售在向客户发货时即得到认可。在某些情况下，供应商应公司的要求将产品直接运送给最终客户。由于公司负责履行客户合同、与客户确定定价以及承担客户的信用风险，因此确定其是这些合同的主要义务人。公司按毛额确认与客户签订的这些合同的收入。数字产品销售是指在购买时传输给客户的电子内容。该公司还通过在线课程订阅获得收入，这些课程可能按月或按年订阅。在客户预先购买年度订阅的情况下，公司将收入推迟到履行义务得到履行之后。截至 2024 年 9 月 30 日和 2023 年 12 月 31 日，该公司有 $
下表提供了截至2024年和2023年9月30日的三个月和九个月的分项营业收入信息：
|
| 截至三个月结束 九月 30, |
|
| 截至九个月结束 九月 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
网站管理 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
广告和内容营业收入 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
产品销售 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
数字产品销售 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
总营业收入 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
公司没有任何单一客户在截至2024年和2023年9月30日的三个和九个月内占据超过
| 10 |
| 目录 |
收入成本
产品营业收入的成本主要包括与公司在线市场销售的产品采购和运输相关的成本，以及其服务收入的成本，其中包括网站内容创建成本（包括合同劳动力）、域名和托管成本以及与网站运营相关的某些软件成本。
服务收入成本主要包括与通过公司在线市场出售的产品的采购和运输相关的成本，以及其服务收入的成本，其中包括网站内容创作成本（包括合同劳工）、域名和托管成本以及与网站运营相关的一些软件成本。
Net Income (Loss) Per Share
In accordance with ASC 260 “Earnings per Share,” basic net loss per common share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and common equivalent shares, including
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.
Fair Value of Financial Instruments
The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and notes payable approximate fair value due to the relatively short period to maturity for these instruments.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.
The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.
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| Table of Contents |
Stock-Based Compensation
Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-Based Compensation” established financial accounting and reporting standards for stock-based compensation plans. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The valuation of employee stock options is an inherently subjective process, since market values are generally not available for long-term, non-transferable employee stock options. Accordingly, the Black-Scholes option pricing model is utilized to derive an estimated fair value. The Black-Scholes pricing model requires the consideration of the following six variables for purposes of estimating fair value.
Expected Dividends. - We have never declared or paid any cash dividends on our common stock and do not expect to do so in the foreseeable future. Accordingly, we use an expected dividend yield of zero to calculate the grant-date fair value of a stock option.
Expected Volatility. - The expected volatility is a measure of the amount by which our stock price is expected to fluctuate during the expected term of options granted. We determine the expected volatility solely based upon the historical volatility of a peer group of companies of similar size and with similar operations.
Risk-Free Interest Rate. - The risk-free interest rate is the implied yield available on U.S. Treasury zero-coupon issues with a remaining term equal to the option’s expected term on the grant date.
Expected Term. - The expected life of stock options granted is based on the actual vesting date and the end of the contractual term.
Stock Option Exercise Price and Grant Date Price of Common Stock. - Currently the Company utilizes the most recent cash sale closing price of its common stock as the most reasonable indication of fair value.
The Company accounts for compensation cost for stock option plans and for share based payments to non-employees in accordance with ASC 505, “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. Share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value.
Segment Reporting
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using information about its revenues, gross profit, income from operations, and other key financial data. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
NOTE 3 – GOING CONCERN
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2024, the Company had not yet achieved consistent profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity or debt financing and/or related party advances. However, there is no assurance of additional funding being available.
| 12 |
| Table of Contents |
NOTE 4 – BUSINESS ACQUISITIONS
RevenueZen
On December 31, 2023, RevenueZen (the “Acquired Business”) and the Company and RevenueZen LLC, a Delaware limited liability company ("RevenueZen Delaware") a subsidiary of the Company, entered into and closed an asset purchase agreement (the "RevenueZen Asset Purchase Agreement"), for the purchase by the Company of the Acquired Business.
Pursuant to the RevenueZen Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, RevenueZen agreed to sell to the Company the Acquired Business, all as more fully described in the RevenueZen Asset Purchase Agreement. The aggregate purchase price for the Acquired Business was $
The earn-out formula specifies for a period of one year, if the SDE (defined in Note 10 below) of the RevenueZen business exceeds $
The transaction closed on January 4, 2024, when consideration was transferred by the Company and control was obtained by the Company and was accounted for as a business combination under ASC 805. The earn-out agreement is accounted for as a contingent consideration liability under ASC 805, which changes in fair value of the potential earn-out amount recognized in current earnings.
The aggregate fair value of consideration for the RevenueZen acquisition was as follows:
Schedule of preliminary fair value of consideration transferred |
|
| ||
|
|
|
| |
|
| Amount |
| |
Cash paid to seller |
| $ |
| |
Notes payable issued to seller |
|
|
| |
Options to purchase common shares issued to seller |
|
|
| |
Estimated fair value of additional earn-out payments |
|
|
| |
Series A Preferred Shares issued to seller |
|
|
| |
Fair value of 12% equity interest in RevenueZen retained by Sellers |
|
|
| |
Total preliminary consideration transferred |
| $ |
| |
| 13 |
| Table of Contents |
The following information summarizes the preliminary allocation of the fair values assigned to the assets acquired at the acquisition date:
Preliminary Schedule of Recognized Identified Assets Acquired and Liabilities |
|
|
| |
Developed technology |
| $ |
| |
Customer relationships |
|
|
| |
Trademarks and Trade Names |
|
|
| |
Non-Compete agreement |
|
|
| |
Goodwill |
|
|
| |
Preliminary net assets acquired |
| $ |
| |
From the period of acquisition of the RevenueZen Business through September 30, 2024, the Company generated total revenue and net loss of $
DDS Rank
On June 6, 2024, SEO Marketing, Inc (dba DDS Rank) (“DDS Rank” or the “Acquired Business”) and DDS Rank LLC (“DDS Rank Delaware”), a subsidiary of the Company entered into and closed an asset purchase agreement (the "DDS Asset Purchase Agreement"), for the purchase by the Company of the Acquired Business.
Pursuant to the DDS Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, DDS Rank agreed to sell to the Company the Acquired Business, all as more fully described in the DDS Asset Purchase Agreement. The aggregate purchase price for the Acquired Business was $
The transaction closed on June 24, 2024, when consideration was transferred by the Company and control was obtained by the Company and was accounted for as a business combination under ASC 805.
The aggregate fair value of consideration for the DDS Rank acquisition was as follows:
Schedule of preliminary fair value of consideration transferred |
|
| ||
|
|
|
| |
|
| Amount |
| |
Cash paid to seller |
|
|
| |
Notes payable issued to seller |
|
|
| |
Series A Preferred Shares issued to seller |
|
|
| |
Total preliminary consideration transferred |
| $ |
| |
The following information summarizes the allocation of the fair values assigned to the assets acquired at the acquisition date:
Preliminary Schedule of Recognized Identified Assets Acquired and Liabilities |
|
|
| |
|
|
|
|
|
Developed technology |
| $ |
| |
Customer relationships |
|
|
| |
Trademarks and Trade Names |
|
|
| |
Non-Compete agreement |
|
|
| |
Preliminary net assets acquired |
| $ |
| |
From the period of acquisition of the DDS Rank Business through September 30, 2024, the Company generated total revenue and net loss of $
| 14 |
| Table of Contents |
Unaudited Pro Forma Financial Information
The following table sets forth the pro-forma consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 as if the RevenueZen and DDS Rank acquisitions occurred on January 1, 2023. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.
|
| Three Months ended September 30, |
|
| Nine Months ended September 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Operating loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss attributable to common shareholders |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss per common share |
| $ | ( | ) |
| $ | ( | ) |
|
| ( | ) |
|
| ( | ) |
Weighted Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
| ||||
NOTE 5 – INVESTMENTS IN JOINT VENTURES
The Company holds various investments in certain joint ventures as described below.
Cost method investments
OnFolio JV I, LLC (“JV I”) was formed on October 11, 2019 under the laws of Delaware. OnFolio LLC is the managing member of JV I and has operational and financial decision-making authority. The manager of JV I can be removed by a majority vote of the equity holders of JV I. On August 1, 2020, the Company received an investment of
OnFolio JV II, LLC (“JV II”) was formed on November 8, 2019 under the laws of Delaware. OnFolio LLC is the managing member of JV II and has operational and financial decision-making authority. The manager of JV II can be removed by a majority vote of the equity holders of JV II. On August 1, 2020, the Company received an investment of approximately
OnFolio JV III, LLC (“JV III”) was formed on January 3, 2020 under the laws of Delaware. OnFolio LLC is the managing member of JV III and has operational and financial decision-making authority. The manager of JV III can be removed by a majority vote of the equity holders of JV III. On August 1, 2020, the Company received an investment of approximately
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| Table of Contents |
OnFolio Groupbuild 1 LLC (“Groupbuild”) was formed on April 22, 2020 under the laws of Delaware.
On March 4, 2024, the Company invested $
On May 31, 2024, the Company, through its subsidiary Revenue Zen LLC, invested $
Equity Method Investments
OnFolio JV IV, LLC (“JV IV”) was formed on January 3, 2020 under the laws of Delaware. The Company holds an equity interest of
The balance sheet of JV IV at September 30, 2024 included total assets of $
|
| Three Months ended September 30, |
|
| Nine Months ended September 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Net income (loss) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||
The Company recognized equity method income (loss) of $(
NOTE 6 – INTANGIBLE ASSETS
On April 1, 2024, the Company, through its subsidiary Revenue Zen LLC, acquired certain assets from First Page LLC, for a purchase price of $
| 16 |
| Table of Contents |
The following table represents the balances of intangible assets as of September 30, 2024 and December 31, 2023:
|
| Estimated life |
| September 30, 2024 |
|
| December 31, 2023 |
| ||
Website Domains |
| Indefinite |
| $ |
|
| $ |
| ||
Website Domains |
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|
|
| |||
Customer relationships |
| |
|
|
|
|
|
| ||
Trademarks and Tradenames |
| |
|
|
|
|
|
| ||
Non-compete agreements |
| |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||
Accumulated Amortization - Website domains |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Customer Relationships |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Trademarks / Tradenames |
|
|
|
| ( | ) |
|
| ( | ) |
Accumulated Amortization - Non-Compete |
|
|
|
| ( | ) |
|
| ( | ) |
Net Intangible |
|
|
| $ |
|
| $ |
| ||
On January 1, 2024, the Company closed on its acquisition of the RevenueZen LLC. As part of the acquisition, the Company acquired assets related to the websites operated by RevenueZen. Pursuant to the purchase price allocation as further described in Note 4, the Company allocated $
On June 24, 2024, the Company closed on its acquisition of the DDS Rank LLC. As part of the acquisition, the Company acquired assets related to the websites operated by DDS Rank. Pursuant to the purchase price allocation as further described in Note 4, the Company allocated $
For the three months ended September 30, 2024 and 2023, the Company recognized $
The following is an amortization analysis of the annual amortization of intangible assets on a fiscal year basis as of September 30, 2024:
For the year ended December 31, |
| Amount |
| |
2024 (3 months remaining) |
| $ |
| |
2025 |
|
|
| |
2026 |
|
|
| |
2027 |
|
|
| |
2028 |
|
|
| |
Thereafter |
|
|
| |
Total remaining intangibles amortization |
|
|
| |
NOTE 7 – STOCKHOLDERS’ EQUITY
Preferred stock
The Company’s authorized preferred stock consists of
On January 4, 2024, in connection with the RevenueZen Acquisition as discussed in Note 4, the Company issued
On June 24, 2024, in connection with the DDS Rank Acquisition as discussed in Note 4, the Company issued
During the nine months ended September 30, 2024, the Company sold
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During the nine months ended September 30, 2024 and 2023, the Company recognized $
As of September 30, 2024 and December 31, 2023, there were
Common stock
Company’s authorized common stock consists of
Stock Options
On January 4, 2024, the Company awarded an aggregate of
A summary of stock option information is as follows:
|
| Outstanding Awards |
|
| Weighted Average Grant Date Fair Value |
|
| Weighted Average Exercise price |
| |||
Outstanding at December 31, 2023 |
|
|
|
| $ |
|
| $ |
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Forfeited and cancelled |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Outstanding at September 30, 2024 |
|
|
|
| $ |
|
| $ |
| |||
Exercisable at September 30, 2024 |
|
|
|
| $ |
|
| $ |
| |||
The weighted average remaining contractual life is approximately
| 18 |
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Common Stock Warrants
A summary of stock warrant information is as follows:
|
| Outstanding Awards |
|
| Weighted Average Grant Date Fair Value |
|
| Weighted Average Exercise price |
| |||
Outstanding at December 31, 2023 |
|
|
|
| $ |
|
| $ |
| |||
Granted |
|
| - |
|
|
|
|
|
| - |
| |
Exercised |
|
| - |
|
|
|
|
|
| - |
| |
Forfeited and cancelled |
|
| - |
|
|
|
|
|
| - |
| |
Outstanding at September 30, 2024 |
|
|
|
| $ |
|
| $ |
| |||
Exercisable at September 30, 2024 |
|
|
|
| $ |
|
| $ |
| |||
The weighted average remaining contractual life is approximately
NOTE 8 – RELATED PARTY TRANSACTIONS
From time to time, the Company pays expenses directly on behalf of the Joint Ventures that it manages and receives funds on behalf of the joint ventures. As of September 30, 2024 and December 31, 2023 the balances due from the joint ventures were $
From time to time, the Company’s CEO paid expenses on behalf of the Company, and the Company funded certain expenses to the CEO. Additionally, the Company received its investments in JV I, JV II and JV III from the CEO. As of September 30, 2024 and December 31, 2023, the Company was owed $
No member of management has benefited from the transactions with related parties.
NOTE 9 – NOTES PAYABLE
On January 4, 2024, the Company entered into the RevenueZen Note as part of the acquisition of RevenueZen. The RevenueZen Note has
In January 2024, the Company entered into three separate promissory notes for aggregate principal of $
On June 6, 2024, the Company entered into the DDS Rank Note as part of the acquisition of DDS Rank. The DDS Rank Note has the principal sum of $
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During the nine months ended September 30, 2024, the Company received proceeds of $
At various times the Company enters into short term financing agreements with payment service providers who provide cash proceeds. The Company will repay the principal balance based on a percentage of its daily sales processed through the service provider until the total principal is repaid, based on the repayment terms in the agreement which is generally less than one year. The following table shows the outstanding balances of these lenders as of September 30, 2024:
Entity |
| Origination Date |
|
| Interest rate |
|
|
| Original cash advanced |
|
|
| Balance as of September 30, 2024 |
|
Proofread Anywhere |
|
|
| % |
| $ |
|
| $ |
| ||||
WPFolio |
|
|
| % |
| $ |
|
| $ |
| ||||
Contentellect |
|
|
| % |
| $ |
|
| $ |
| ||||
Onfolio Assets |
|
|
| % |
| $ |
|
|
|
| ||||
Onfolio Assets |
|
|
| % |
| $ |
|
| $ |
| ||||
Proofread Anywhere |
|
|
| % |
| $ |
|
| $ |
| ||||
Onfolio Holdings |
|
|
| % |
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total balance as of September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
| $ |
|
NOTE 10 – COMMITMENTS AND CONTINGENCIES
On October 3, 2022, the Company entered into an Asset Purchase Agreement (“Hoang Asset Purchase Agreement”) with Hoang Huu Thinh, an individual (“Hoang”) for the purchase of the BWPS business. Pursuant to the Hoang Asset Purchase Agreement,
Pursuant to the RevenueZen acquisition as described above in Note 4, the Company granted earn-out payments that could be paid to RevenueZen pursuant to the earn-out formula described in the RevenueZen Asset Purchase Agreement. The earn-out formula specifies for a period of one year, if the SDE of the RevenueZen business exceeds $
| 20 |
| Table of Contents |
NOTE 11 – SUBSEQUENT EVENTS
Management has evaluated events through November 14, 2024, the date these financial statements were available for issuance, and noted the following events requiring disclosures:
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 (the “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”).
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 $
The secured promissory notes consist of: (i) a $
Due to the limited time since the closing of the acquisition, the valuation efforts and related acquisition accounting is incomplete at the time of the filing of these unaudited consolidated financial statements. As a result, the Company is unable to provide amounts recognized as of the acquisition date for major classes of assets and liabilities acquired, including goodwill and other intangible assets. In addition, because the acquisition accounting is incomplete, the Company is unable to provide the supplemental pro forma revenue and earnings for the combined entity, as the pro forma adjustments are expected to primarily consist of estimates for the amortization of identifiable intangible assets acquired and related income tax effects, which will result from the purchase price allocation and determination of the fair values for the assets acquired and liabilities assumed.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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.
Overview
Onfolio Holdings Inc. acquires controlling interests in and actively manages online businesses that we believe (i) operate in sectors with long-term growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence and (iv) can be managed by our existing team or have strong management teams largely in place. Through the acquisition and growth of a diversified group of websites with these characteristics, we believe we offer investors in our shares an opportunity to diversify their own portfolio risk.
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.
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.
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.
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.
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.
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.
We continue to maintain a strong acquisition pipeline and are actively working towards completing these transactions.
Management remains committed to continuous improvement and achieving profitability by focusing on optimizing our financial position and completing accretive acquisitions.
Recent Developments
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.
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”).
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| Table of Contents |
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.
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.
Emerging Growth Company
We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
| · | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
| ·
| comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
| · | submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” |
| · | disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.07 billion or more, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors at a portfolio company level:
| · | our ability to acquire new customers or retain existing customers and grow revenue; |
| · | our ability to offer competitive product pricing and control expenses; |
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| Table of Contents |
| · | our ability to broaden product offerings; |
| · | industry demand and competition; |
| · | our ability to leverage technology and use and develop efficient processes; |
| · | our ability to attract and retain talented employees; |
|
|
|
| · | our ability to identify and acquire companies at reasonable prices and terms; |
|
|
|
| · | our ability to reduce and control corporate overhead; and |
| · | market conditions and our market position. |
Results of Operations
Three Months Ended September 30, 2024 compared to the Three Months Ended September 30, 2023
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:
Revenues
|
| For the Quarter Ended September 30, |
|
| $ Change from prior |
|
| % Change from prior |
| |||||||
|
| 2024 |
|
| 2023 |
|
| Year |
|
| year |
| ||||
Revenue, services |
| $ | 919,044 |
|
| $ | 433,490 |
|
| $ | 485,554 |
|
|
| 112 | % |
Revenue, product sales |
|
| 1,092,728 |
|
|
| 879,821 |
|
|
| 212,907 |
|
|
| 24 | % |
Total Revenue |
| $ | 2,011,772 |
|
| $ | 1,313,311 |
|
|
| 698,461 |
|
|
| 53 | % |
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.
Cost of Revenue
|
| For the Quarter Ended September 30, |
|
| $ Change from |
|
| % Change from |
| |||||||
|
| 2024 |
|
| 2023 |
|
| prior year |
|
| prior year |
| ||||
Cost of revenue, services |
| $ | 625,676 |
|
| $ | 218,063 |
|
| $ | 407,613 |
|
|
| 187 | % |
Cost of revenue, product sales |
|
| 180,421 |
|
|
| 247,533 |
|
|
| (67,112 | ) |
|
| (27 | )% |
Total Cost of Revenue |
|
| 806,097 |
|
|
| 465,596 |
|
|
| 340,501 |
|
|
| 73 | % |
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.
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| Table of Contents |
Operating Expenses
Selling, General and Administrative
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.
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.
Professional Fees and Acquisition Costs
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.
Other Income and expense
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.
Nine Months Ended September 30, 2024 compared to the Nine Months Ended September 30, 2023
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:
Revenues
|
| For the Nine Months Ended September 30, |
|
| $ Change from prior |
|
| % Change from prior |
| |||||||
|
| 2024 |
|
| 2023 |
|
| Year |
|
| year |
| ||||
Revenue, services |
| $ | 2,635,761 |
|
| $ | 1,121,641 |
|
| $ | 1,514,120 |
|
|
| 135 | % |
Revenue, product sales |
|
| 2,689,512 |
|
|
| 2,853,447 |
|
|
| (163,935 | ) |
|
| (6 | )% |
Total Revenue |
| $ | 5,325,273 |
|
| $ | 3,975,088 |
|
|
| 1,350,185 |
|
|
| 34 | % |
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.
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| Table of Contents |
Cost of Revenue
|
| For the Nine Months Ended September 30, |
|
| $ Change from |
|
| % Change from |
| |||||||
|
| 2024 |
|
| 2023 |
|
| prior year |
|
| prior year |
| ||||
Cost of revenue, services |
| $ | 1,549,900 |
|
| $ | 651,849 |
|
| $ | 898,051 |
|
|
| 138 | % |
Cost of revenue, product sales |
|
| 589,931 |
|
|
| 916,740 |
|
|
| (326,809 | ) |
|
| (36 | )% |
Total Cost of Revenue |
|
| 2,139,831 |
|
|
| 1,568,589 |
|
|
| 571,242 |
|
|
| 36 | % |
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.
Operating Expenses
Selling, General and Administrative
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.
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.
Professional Fees and Acquisition Costs
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.
Other Income and expense
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.
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| Table of Contents |
Liquidity and Capital Resources
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.
Our Company’s recurring losses from operations and negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern. Accordingly, management and our auditor have concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited financial statements contained 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 were prepared on a going concern basis, and contemplated the realization of assets and satisfaction of liabilities in the ordinary course of business. We believe that our cash and cash equivalents as of September 30, 2024, and the future operating cash flows of the entity may not provide adequate resources to fund ongoing cash requirements for the next twelve months. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern.
Cash used in operating activities
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.
Cash used in investing activities
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.
Cash provided by financing activities
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.
Critical Accounting Policies
The following are the Company’s critical accounting policies:
Investment in Unconsolidated Entities – Equity and Cost Method Investments
We account for our interests in entities in which we are able to exercise significant influence over operating and financial policies, generally 50% or less ownership interest, under the equity method of accounting. In such cases, our original investments are recorded at cost and adjusted for our share of earnings, losses and distributions. We account for our interests in entities where we have virtually no influence over operating and financial policies under the cost method of accounting. In such cases, our original investments are recorded at cost and any distributions received are recorded as income. Our investments in OnFolio JV I, LLC (“JV I”), OnFolio JVII, LLC (“JVII”) and OnFolio JVIII, LLC (“JVIII”) are accounted for under the cost method. All investments are subject to our impairment review policy.
The current investment in unconsolidated affiliates accounted for under the equity method consists of a 35.8% interest in OnFolio JV IV, LLC (“JV IV”), which is involved in the acquisition, development and operation of websites to produce adverting revenue.
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Variable Interest Entities
Variable interest entities (“VIEs”) are consolidated when the investor is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE. Management concluded that the joint ventures do not qualify as variable interest entities under the requirements of ASC 810. The Company accounts for its investments in the joint ventures under either the cost or equity method based on the equity ownership in each entity.
Revenue Recognition
The Company primarily earns revenue through website management, digital services, advertising and content placement on its websites, product sales, and digital product sales. Management services revenue is earned and recognized on a monthly basis as the services are provided. Advertising and content revenue is earned and recognized once the content is presented on the Company's sites in accordance with the customer requirements. Product sales are recognized at the time the product is shipped to the customer. In certain circumstances, products are shipped directly by a supplier to the end customer at the Company's request. The Company determined that it is the primary obligor in these contracts due to being responsible for fulfilling the customer contract, establishing pricing with the customer, and taking on credit risk from the customer. The Company recognizes revenue from these contracts with customers on a gross basis. Digital product sales represent electronic content that is transferred to the customer at time of purchase. The Company also earns revenue from online course subscriptions that may have monthly or annual subscriptions. In circumstances when a customer purchases an annual subscription upfront, the Company defers the revenue until the performance obligation has been satisfied.
Revenue is recognized based on the following five step model:
| - | Identification of the contract with a customer |
| - | Identification of the performance obligations in the contract |
| - | Determination of the transaction price |
| - | Allocation of the transaction price to the performance obligations in the contract |
| - | Recognition of revenue when, or as, the Company satisfies a performance obligation |
The Company amortizes acquired definite-lived intangible assets over their estimated useful lives. Other indefinite-lived intangible assets are not amortized but subject to annual impairment tests.
Long-lived Assets
Property and equipment are stated on the basis of historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Major renewals and improvements are capitalized, while minor replacements, maintenance and repairs are charged to current operations.
In accordance with ASC 360 “Property Plant and Equipment,” the Company reviews the carrying value of intangibles subject to amortization and long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.
Off-balance sheet arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Contractual commitments
The Company has entered into two asset purchase agreements which includes contingent earn-out payments based on specific performance criteria.
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 September 30, 2024. (See Note 10 for further details.)
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.)
Also, see Note 11 – Subsequent Events for additional contractual commitments.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our management, with the participation of our principal executive officer and principal financial officer has concluded that, based on such evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective due to the material weakness described below. However, our management, including our principal executive officer and principal financial officer, has concluded that, notwithstanding the identified material weakness in our internal control over financial reporting, the financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
Material Weakness in Internal Controls Over Financial Reporting
We identified a material weakness in our internal control over financial reporting that exists as of September 30, 2024. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We determined that we had a material weakness because, due to our small size, and our limited number of personnel, we did not have in place an effective internal control environment with formal processes and procedures, including journal entry processing and review, to allow for a detailed review of accounting transactions that would identify errors in a timely manner.
Notwithstanding the material weaknesses in our internal control over financial reporting, we have concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.
Management’s Plan to Remediate the Material Weakness
With the oversight of senior management, management is working towards remediation of these weaknesses in 2024 including addition of accounting personnel and to evaluate and implement procedures that will strengthen our internal controls. While we believe these measures will remediate the material weakness identified and strengthen our internal control over financial reporting, there is no assurance that we will demonstrate sufficient improvement that the material weakness will be remediated. We are committed to continuing to improve our internal control processes and will continue to diligently review our financial reporting controls and procedures.
Changes in Internal Control
There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS.
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our 2023 Form 10-K, as filed with the SEC on April 1, 2024, which could materially affect our business, financial condition or future results. The risks described in this Form 10-Q and in our 2023 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
We have incurred operating losses since our inception and we may continue to incur substantial operating losses for the foreseeable future.
We were incorporated on July 20, 2020, and have conducted operations since May 2019. We have incurred operating losses and experienced negative cash flow since our inception. We incurred a net loss of $8,144,821 for the year ended December 31, 2023 and 1,909,993 for the nine months ended September 30, 2024. We anticipate that we will continue to incur operating losses through at least 2024.
We may not be able to generate sufficient revenue from owning and/or managing our online businesses to achieve profitability. We expect to continue to make significant operating and capital expenditures for acquisitions of online businesses, technologies, or other assets; and for marketing, working capital and general corporate purposes. As a result, we will need to generate significant revenue to achieve profitability. We cannot assure you that we will ever achieve profitability.
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Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.
As described in Note 3 of our audited financial statements contained 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, our auditors have issued a going concern opinion on our December 31, 2023 financial statements, expressing substantial doubt that we can continue as an ongoing business for the next twelve months after issuance of their report based on our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing, debt financing and/or related party advances, however there is no assurance of additional funding being available. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot raise the necessary capital to continue as a viable entity, we could experience a material adverse effect on our business and our stockholders may lose some or all of their investment in us.
We can provide no assurances that any additional sources of financing will be available to us on favorable terms, if at all. Our forecast of the period of time through which our current financial resources will be adequate to support our operations and the costs to support our general and administrative and acquisition activities are forward-looking statements and involve risks and uncertainties.
If we do not succeed in raising additional funds on acceptable terms, we could be forced to delay or curtail potential website acquisitions, forego sales and marketing efforts, and forego potential attractive business opportunities. Unless we secure additional financing, we will be unable to continue to execute on our business plan.
We require additional capital to support our present business plans and our anticipated business growth, and such capital may not be available on acceptable terms, or at all, which would adversely affect our ability to operate.
We will require additional funds to further develop our business plan. Based on our current operating plans, we believe we need to make additional acquisitions of online businesses, technologies, or other assets to generate enough cashflow to carry our overhead costs. We may choose to raise additional capital in order to expedite and propel growth more rapidly. We can give no assurance that we will be successful in raising any additional funds. Additionally, if we are unable to generate sufficient revenues from our sales and operating activities, we may need to raise additional funds, doing so through debt and equity offerings, in order to meet our expected future liquidity and capital requirements, including capital required for operations. Any such financing that we undertake will likely be dilutive to current stockholders.
We intend to continue to make investments to support our business growth, including acquiring additional online businesses. In addition, we may also need additional funds to respond to other business opportunities and challenges, including our ongoing operating expenses, protecting our intellectual property, satisfying debt and series A preferred stock payment obligations, and enhancing our operating infrastructure. While we may need to seek additional funding for such purposes, we may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock. We may also seek to raise additional funds through arrangements with collaborators or other third parties. We may not be able to negotiate any such arrangements on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate some or all our business plans.
We cannot predict our future capital needs and we may not be able to secure additional financing.
We will need to raise additional funds in the future to fund our working capital needs and to fund further expansion of our business. We may require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for these purposes. No assurance can be given that necessary funds will be available for us to finance our development on acceptable terms, if at all. Furthermore, such additional financings may involve substantial dilution of our stockholders or may require that we relinquish rights to certain of our technologies or products. In addition, we may experience operational difficulties and delays due to working capital restrictions. If adequate funds are not available from operations or additional sources of financing, we may have to delay or scale back our growth plans.
We may not be able to maintain a listing of our common stock and publicly-traded warrants on Nasdaq.
Although our common stock and publicly-traded warrants are listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate Nasdaq’s listing requirements, or if we fail to meet any of Nasdaq’s listing standards, our common stock and publicly-traded warrants may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock and publicly-traded warrants from Nasdaq may materially impair our shareholders’ ability to buy and sell our common stock and publicly-traded warrants and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock and warrants. The delisting of our common stock and publicly-traded warrants could significantly impair our ability to raise capital and the value of your investment.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following is a summary of all securities that we have sold during the period covered by this report without registration under the Securities Act of 1933, as amended (the “Securities Act”):
During the three months ended September 30, 2024, our Company sold 400 shares of Series A Preferred Stock at $25 per share for total consideration of $10,000.
All of the securities were offered and sold in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act and/or (i) Rule 506 of Regulation D promulgated thereunder; or (ii) Regulation S promulgated thereunder. No underwriters were utilized, and no commissions or fees were paid with respect to any of the above transactions.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Trading Arrangements
During the nine months ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5- 1(c) under the Exchange Act or any “non-Rule 10b5-1 arrangement” as defined in Item 408(c) of Regulation S-K.
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ITEM 6. EXHIBITS.
The following exhibits are included herein:
Exhibit No. |
| Description of Exhibit |
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| Form of Corporate Guarantee (Incorporated by reference to our Form 8-K filed on 10/22/2024) | |
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101.INS* |
| Inline XBRL Instance Document |
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ONFOLIO HOLDINGS INC. |
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Date: November 14, 2024 | By: | /s/ Dominic Wells |
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| Dominic Wells Chief Executive Officer (Principal Executive Officer) |
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Date: November 14, 2024 | By: | /s/ Esbe van Heerden |
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| Esbe van Heerden Chief Financial Officer (Principal Financial Officer) |
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