美國
證券交易委員會
華盛頓特區20549
表格
(標記一個)
根據1934年證券交易法第13或15(d)條款的季度報告。 |
截至2024年6月30日季度結束
或
根據1934年證券交易法第13或15(d)條款的過渡報告 |
針對過渡期間從 _________到 ___________
委員會檔案編號：
（根據其章程所指定的正式名稱） |
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(成立州或其他管轄區) 成立或組織證明文件) |
| (國稅局雇主 識別號碼) |
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(總部辦公地址) |
| (郵遞區號) |
(
(註冊人電話號碼，包括區號)
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
| 交易標的（s） |
| 每個註冊交易所的名稱 |
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購買普通股的warrants |
| ONFOW |
| 納斯達克資本市場 |
請勾選以下項目，以判定在過去12個月(或更短期間，該註冊人被要求提交報告)內所有根據1934年證券交易法第13條或第15(d)條要求提供報告的報告是否已經提交，並且該註冊人在過去90天中是否受到提交報告的要求。
請在選框內打勾，確認註冊人是否在過去12個月內（或註冊人需要提交此類文件更短的期限內）根據Regulation S-t第405條規定提交了必須提交的所有互動數據文件。
請在方框內勾選申報者是否為大型快速申報者、快速申報者、非快速申報者、較小型報告公司或新興成長公司。在《交易所法》第120億2條中，請查看「大型快速申報者」、「快速申報者」、「較小型報告公司」和「新興成長公司」的定義。
大型加速歸檔人 | ☐ | 加速歸檔人 | ☐ |
☒ | 小型報告公司 | ||
|
| 新興成長型企業 |
如果一家新興成長公司，請打勾表示該公司已選擇不使用符合《交易所法》第13(a)條的進階過渡期，以遵守任何新的或修訂的財務會計準則。
在核准的名冊是否屬於殼公司（如股市法規第1202條所定義之意義）方面，請用勾選符號表示。是
截至2024年11月14日，普通股的發行股數為
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| 頁碼 |
第一部分. 財務資訊 |
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| 2 |
| 內容表 |
關於前瞻性聲明的警示
這份10-Q表格報告包含前瞻性聲明。前瞻性聲明涉及風險和不確定性，如關於我們計劃、目標、期望、假設或未來事件的聲明。在某些情況下，您可以通過術語如「預計」、「估計」、「計劃」、「項目」、「持續」、「進行中」、「期望」、「我們相信」、「我們打算」、「可能」、「應該」、「將」、「可能」等類似表達未來發生不確定性或可能發生的行動的前瞻性聲明。這些聲明涉及估計、假設、已知和未知的風險、不確定性以及可能導致實際結果與前瞻性聲明中表達或暗示的任何未來結果、業績或成就大相徑庭的因素。您不應過分依賴這些前瞻性聲明。
前瞻性聲明的示例包括但不限於：
| ● | 未來產品或服務開發的預期時間； |
| ● | 成本、營業收入、收益、資本結構和其他財務條目的預測； |
| ● | 我們的計劃和目標說明； |
| ● | 關於我們業務運營能力的聲明； |
| ● | 預期未來經濟表現的聲明; |
| ● | 關於我們市場競爭的聲明; 和 |
| ● | 關於我們或我們業務聲明的基本假設。 |
前瞻性聲明既不是歷史事實，也不是對未來業務表現的保證。相反，它們僅基於我們目前對未來的信念、期望和假設，涉及我們業務的未來、未來計劃和策略、預期事件和趨勢、經濟和其他未來狀況。由於前瞻性聲明涉及未來，它們受固有的不確定性、風險和難以預測的環境變化的影響，其中許多在我們的控制範圍之外。我們的實際結果和財務狀況可能與前瞻性聲明中所示有實質性的差異。因此，您不應依賴於任何這些前瞻性聲明。可能導致我們的實際結果和財務狀況與前瞻性聲明中所示有實質性差異的重要因素包括，但不限於下列因素：
| ● | 我們管理目前和預期財務狀況以及估計的現金消耗率的能力，包括我們對支出、未來收入和資本需求的估計，最終我們作爲持續經營者的能力； |
| ●
| 我們籌集額外資金或其他資金以進一步發展和擴大我們的業務，實現我們的長期業務目標的能力。我們的收入有限，我們無法預測何時或者是否將實現重大收入和持續盈利能力； |
| ● | 我們實現重大收入和持續盈利能力的能力； |
| ● | 商譽和長期資產的減值； |
| ● | 客戶需求變化； |
| ● | 我們能夠成本效益地發展品牌，吸引新客戶並以成本效益的方式保留客戶； |
| ● | 我們在網站參與的市場中競爭的能力； |
| ● | 我們制定戰略行動的能力，包括收購和處置以及成功整合收購業務的能力； |
| ● | 我們在合併基礎上成功管理網站的能力； |
| ● | 安全漏洞、網絡安全攻擊和信息技術系統的其他重大破壞事件； |
| ● | 法律法規的發展和變化，包括通過立法行動和修訂規則和標準對我們行業的增加監管； |
| ● | 敵對行動、政治動盪或災難性事件和戰爭的發生； |
| ● | 我們的股票和納斯達克資本市場上的warrants掛牌和交易能力，以及如果我們未能做到這一點對我們業務的潛在影響； |
| ● | 諸如極端天氣、火災、洪水和地震等自然事件，或人爲或其他對我們運營系統、設施或設備造成的干擾； |
| ● | 與環境、社會和治理（esg）事項有關的風險以及相關成本，包括相關法規活動的範圍和步伐； |
| ● | 公司可能面臨的其他風險； |
| ● | 其他因素在公司控制之外。 |
這些前瞻性聲明的最終正確性依賴於許多已知和未知的風險和事件。我們在公司截至2023年12月31日的年度報告的第一部分第1.A項「風險因素」以及本報告的第二部分第1.A項「風險因素」中討論了我們已知的重大風險。許多因素可能導致我們的實際結果與前瞻性聲明存在重大差異。此外，我們無法評估每個因素對我們業務的影響，或者任何因素或組合因素可能導致實際結果與任何前瞻性聲明中的結果存在重大差異的程度。
前瞻性聲明僅在其製作之日起生效，除非法律要求，我們不會有義務更新任何前瞻性聲明以反映在聲明發布之日後發生的事件或情況，或反映意外事件的發生。
| 3 |
| 目錄 |
第 1 項。財務報表。
Onfolio Holdings, Inc. | ||||||||
所得稅 $408 $712 $1,860 $1,890 360 % 163 %資產負債表 | ||||||||
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資產 |
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流動資產： |
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現金 |
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應收賬款，淨額 |
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存貨 |
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預付款項及其他流動資產 |
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流動資產合計 |
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無形資產 |
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商譽 |
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應收關聯方款項 |
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投資未納入合併報表的合營企業，成本法 |
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投資未納入合併報表的合營企業，權益法 |
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其他資產 |
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總資產 |
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負債和股東權益 |
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流動負債: |
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應付賬款及其他流動負債 |
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應付股息 |
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應付票據，短期 |
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附帶條件 |
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遞延收入 |
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總流動負債 |
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應付票據 |
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應付票據 - 關聯方 |
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總負債 |
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承諾和事項（註釋10） |
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股東權益： |
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優先股，$0.0001 |
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A 級優先股，每股面值$ |
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普通股，每股面值爲 $0.0001； |
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追加實收資本 |
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累計其他綜合收益 |
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累積赤字 |
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Total Onfolio Inc.股東權益 |
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非控制者權益 |
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股東權益總計 |
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負債和股東權益總計 |
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附註是這些未經審計的合併財務報表的重要組成部分 | ||||||||
| 4 |
| 目錄 |
Onfolio Holdings, Inc. | ||||||||||||||||
截至2020年6月30日和2019年6月30日三個月和六個月的營業額 | ||||||||||||||||
(未經審計) | ||||||||||||||||
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| 截至9月30日三個月的情況 |
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營業收入, 服務 |
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營業收入, 產品銷售 |
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營業總收入 |
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產品銷售成本 |
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總成本費用 |
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毛利潤 |
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運營費用 |
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銷售、一般及行政費用 |
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專業費用 |
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收購成本 |
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商譽和無形資產減值 |
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總營業費用 |
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營業損失 |
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其他收入（費用） |
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權益法收益（虧損） |
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股息收入 |
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利息收入（費用），淨額 |
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其他收入 |
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其他收入（支出）總額 |
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稅前損失 |
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所得稅（負債）益額 |
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淨虧損 |
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歸因於非控制利益的淨虧損 |
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Onfolio Holdings Inc.歸屬淨損失 |
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優先股股息 |
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普通股股東淨損失 |
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每股普通股東應承擔的淨虧損 |
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基本和攤薄 |
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加權平均每股流通量 |
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基本和攤薄 |
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附註是這些未經審計的合併財務報表的組成部分 | ||||||||||||||||
| 5 |
| 目錄 |
Onfolio Holdings，Inc。 | |||||||||||||||||||||||||||||||||||||||||||||
所得稅 $408 $712 $1,860 $1,890 360 % 163 %股東權益變動表 | |||||||||||||||||||||||||||||||||||||||||||||
2024年和2023年9月30日止三個和九個月 | |||||||||||||||||||||||||||||||||||||||||||||
(未經審計) | |||||||||||||||||||||||||||||||||||||||||||||
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| 累計其他 |
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| 非 |
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| Preferred Stock，$0.001面值 |
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| 普通股，面值0.001美元 |
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| 額外的 |
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| 累積赤字 |
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| 全面的 |
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| 控制 |
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| 股東權益 |
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| 股份 |
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| 金額 |
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| 股份 |
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| 金額 |
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| 實收資本 |
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| 赤字 |
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| 收入 |
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| 利息 |
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| 權益 |
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2023年12月31日餘額 |
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| $ |
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| $ | ( | ) |
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| - |
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| - |
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| - |
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業務收購 |
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出售優先股以換取現金 |
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基於股票的補償 |
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| - |
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優先股分紅 |
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外匯翻譯 |
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| - |
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| - |
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淨虧損 |
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2024 年 3 月 31 日餘額 |
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| - |
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| - |
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| - |
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業務收購 |
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基於股票的補償 |
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行使期權發行的普通股 |
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優先股分紅 |
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外匯翻譯 |
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分配給非控股權益 |
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淨虧損 |
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餘額，2024年6月30日 |
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優先股出售所得款項 |
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通過行權期權收到的現金 |
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基於股票的補償 |
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| - |
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| - |
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優先股分紅 |
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| - |
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外匯翻譯 |
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| - |
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| - |
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分配給非控股權益 |
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淨虧損 |
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| - |
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| - |
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餘額，2024年9月30日 |
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| $ |
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| $ |
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| $ |
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2022年12月31日餘額 |
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基於股票的補償 |
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| - |
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| - |
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優先股分紅 |
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| - |
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外匯翻譯 |
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| - |
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淨虧損 |
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| - |
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2023年3月31日的結存 |
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基於股票的補償 |
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| - |
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優先股分紅 |
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| - |
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外匯翻譯 |
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| - |
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淨虧損 |
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| - |
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餘額，2023年6月30日 |
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基於股票的補償 |
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| - |
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優先股分紅 |
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外匯翻譯 |
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淨虧損 |
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餘額，2023年9月30日 |
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| $ |
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| $ |
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附註是這些未經審計的綜合財務報表的組成部分 | |||||||||||||||||||||||||||||||||||||||||||||
| 6 |
| 目錄 |
Onfolio Holdings Inc. | ||||||||
合併現金流量表 | ||||||||
截至2024年9月30日和2023年9個月的財務情況 | ||||||||
(未經審計) | ||||||||
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| 2024 |
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| 2023 |
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經營活動產生的現金流量 |
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淨虧損 |
| $ | ( | ) |
| $ | ( | ) |
調整將淨虧損與用於運營活動的淨現金相調和： |
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基於股票的薪酬費用 |
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權益法（收入）/損失 |
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從權益法投資中獲得的分紅派息 |
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無形資產攤銷 |
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無形資產減值 |
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淨變動： |
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應收賬款 |
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存貨 |
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預付款項及其他流動資產 |
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應付賬款及其他流動負債 |
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由於合資企業 |
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遞延收入 |
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用於經營活動的淨現金 |
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投資活動產生的現金流量 |
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按成本法投資支付的現金 |
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用於收購企業支付的現金 |
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對數字貨幣的投資 |
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投資活動中使用的淨現金 |
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籌資活動產生的現金流量 |
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優先股A系列的銷售收益 |
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行使期權的收益 |
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支付的優先股股利 |
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分配給無控制權益持有人的款項 |
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收購應付票據的付款 |
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票據應收款的收入 |
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應付票據支付 |
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| ( | ) |
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從關聯方獲得的票據應付款項的收益 |
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應付票據支付 – 關聯方 |
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融資活動提供的淨現金 |
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受外幣匯率變動的影響 |
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現金淨增加額 |
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| ( | ) |
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| ( | ) |
期初現金 |
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期末現金及現金等價物餘額 |
| $ |
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| $ |
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支付現金: |
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所得稅 |
| $ |
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| $ |
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利息 |
| $ |
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| $ |
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補充非現金披露 |
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爲收購而發行的票據 |
| $ |
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| $ |
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爲收購而發行的優先股 |
| $ |
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| $ |
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爲收購而發行的或有對價 |
| $ |
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| $ |
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爲收購而發行的普通股期權 |
| $ |
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| $ |
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用於收購的非控制性權益 |
| $ |
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| $ |
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因轉換期權而發行的普通股 |
| $ |
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| $ |
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附帶的說明是這些未經審計的合併基本報表不可或缺的一部分 | ||||||||
| 7 |
| 目錄 |
ONFOLIO HOLDINGS INC.
基本報表附註
截至2024年和2023年9月30日的九個月
(未經審計)
附註1 - 業務性質和組織
Onfolio Holdings Inc.（「公司」）於2020年7月20日根據特拉華州的法律成立，以收購和發展高增長和盈利的互聯網業務。該公司主要通過網站管理、廣告以及在其網站上的內容放置和特定網站上的產品銷售來賺取營業收入。公司擁有多個網站，並代表持有股權的特定非合併實體管理網站。
注意事項2-主要會計政策摘要
創課推薦基本報表原則和合並原則。
附帶的綜合財務基本報表及相關附註，已根據美國公認會計准則（「U.S. GAAP」）的期中信息和根據美國證券交易委員會（「SEC」）第10-Q表格和S-X法規第8條的規定編制。公司的財政年度截止於12月31日。根據SEC的期中財務報告規則和規定，按照GAAP編制的財務報表通常包含的某些信息或腳註披露已經被簡化或省略。因此，它們不包括財務狀況、經營結果或現金流量的完整呈現所必需的所有信息和腳註。在管理層的意見中，附帶的未經審計的財務基本報表包括所有調整，其中包括爲了對所呈現的期間的財務狀況、經營結果和現金流量進行公正呈現而必要的一般性經常性調整。附帶的未經審計的綜合財務基本報表應與公司於2024年4月1日向SEC提交的年度報告10-k一起閱讀。截至2024年9月30日的九個月的期間的中期結果未必能反映將於2024年12月31日或未來任何期間望料的結果。
公司的綜合財務報表包括其全資和控股子公司以及其他受控實體的賬目。公司的全資子公司包括Onfolio LLC、 Vital Reaction, LLC、 Mighty Deals LLC、 Onfolio 資產, LLC、 Onfolio Management, LLC、 WP Folio, LLC、 Proofread Anywhere, LLC、 Contentellect, LLC、 SEO Butler Limited、 Eastern Standard LLC 和 DealPipe, LLC。公司還在DDS Rank, LLC和RevenueZen, LLC擁有絕對控股權。所有公司間交易和餘額在合併中已經被消除。
外幣翻譯
公司及其大部分子公司均以美元維護其會計記錄。公司的運營子公司SEO Butler位於英國，以英鎊維護其會計記錄，這是其功能貨幣。子公司的資產和負債以匯率轉換成美元，並按資產負債表日的匯率計算權益帳戶，而按歷史匯率計算營收和支出，其間通過使用期間的平均匯率進行轉換。翻譯調整作爲其他全面收益（虧損）的單獨組成部分報告在綜合損益的合併財務報表中。以外幣計價的交易以接近交易日期的匯率轉換。
| 8 |
| 目錄 |
對未合併實體的投資 - 權益法和成本法投資
我們會對能夠對運營和財務政策施加重大影響的實體進行投資會計處理，通常持有%或更少的股權。
根據權益法覈算，目前對未納入合併的聯營企業的投資包括一個
可變利益實體
變量利益實體（「VIEs」）在投資者是主要受益人時進行合併。主要受益人是VIE的變量利益持有人，具有指導最顯著影響VIE經濟績效的活動的權力並有吸收損失的義務，或者有權獲得對VIE可能具有重大意義的利益。管理層得出結論，根據ASC 810的要求，合資企業不符合變量利益實體的資格，因爲合資企業1）有足夠的股本來爲其經營活動提供資金；2）有股東作爲一個群體具有控制金融權益的特徵，可以通過以多數表決權投票來改變各自合資企業的管理成員，並且3）結構設計具有實質性投票權。公司根據每個實體的股本所有權，按成本法或權益法對其在合資企業的投資進行覈算。
公司通過其子公司Onfolio Management LLC，擔任Onfolio Agency SPV, LLC（「OA SPV」）和Onfolio Agency SPV 2, LLC（「OA SPV 2」）的管理人，合稱「OA SPVs」。公司不持有OA SPVs的任何股權，但將獲得由OA SPV支付的任何現金分配的10%，以及由OA SPV 2支付的任何現金分配的20%，作爲管理費。公司可以通過成員的一致投票將其從OA SPVs的管理人中解除。公司認定，其作爲管理人可能獲得的費用不構成對OA SPVs的變量權益，並將根據ASC 606將其作爲營業收入合同計算。
公司通過其子公司RevenueZen，LLC，擔任CliAquire，LLC（「CliAquire」）的經理。 公司持有CliAquire 5%的成員權益，並將根據其成員權益獲得利潤分配。 公司可以通過成員的絕大多數投票被免去擔任CliAquire經理的職務。 公司確定將CliAquire投資列入成本法投資。
使用估計
根據美國通行會計準則準備財務報表需要管理層進行估計和假設，這些估計和假設影響資產和負債在資產負債表日期報告的金額。公司在評估變量利益實體的控制、遞延稅資產的估值和長期資產減值時，使用重要判斷。實際結果可能與這些估計有所不同。
現金及現金等價物
現金及現金等價物包括現金、在銀行的活期存款以及原始到期不超過三個月的流動投資。
存貨
存貨按實際成本或淨可回收價值的較低者計價。成本採用先進先出法（FIFO）確定。
| 9 |
| 目錄 |
長期資產
公司對收購的有限壽命無形資產在其預計使用壽命內進行攤銷。開多無限壽命無形資產不進行攤銷，但需每年進行減值測試。根據ASC 360「物業、廠房和設備」的規定，公司在全年內或者在事件或情況變化表明資產的賬面價值可能無法收回時，審查可攤銷無形資產和長期資產的賬面價值以進行減值測試。
資產的可復原性是通過將其賬面價值與資產或資產組預計產生的未折現現金流進行比較來衡量的。如果被視爲受損的資產，則應按該財產的賬面價值（如有）超過其公允市場價值的金額來衡量確認減值。
收入確認
公司遵循FASB ASC 606《客戶合同的營業收入》指南，以修正後的追溯法處理所有合同。
營業收入是基於以下五個步驟模型確認的：
| - | 識別與客戶簽訂的合同 |
| - | 確定合同中的履行承諾。 |
| - | 確定交易價格。 |
| - | 對合同中的履行承諾的交易價格進行分配。 |
| - | 在公司履行績效義務的時候或據此擁有資格以及類似財務原則性的規定中，確認收入 |
該公司主要通過網站管理、數字服務、在線業務的廣告和內容投放、產品銷售和數字產品銷售來賺取收入。管理服務收入是在提供服務時按月獲得和確認的。根據客戶要求在公司網站上展示內容後，即可獲得和確認廣告和內容收入。產品銷售在向客戶發貨時即得到認可。在某些情況下，供應商應公司的要求將產品直接運送給最終客戶。由於公司負責履行客戶合同、與客戶確定定價以及承擔客戶的信用風險，因此確定其是這些合同的主要義務人。公司按毛額確認與客戶簽訂的這些合同的收入。數字產品銷售是指在購買時傳輸給客戶的電子內容。該公司還通過在線課程訂閱獲得收入，這些課程可能按月或按年訂閱。在客戶預先購買年度訂閱的情況下，公司將收入推遲到履行義務得到履行之後。截至 2024 年 9 月 30 日和 2023 年 12 月 31 日，該公司有 $
下表提供了截至2024年和2023年9月30日的三個月和九個月的分項營業收入信息：
|
| 截至三個月結束 九月 30, |
|
| 截至九個月結束 九月 30, |
| ||||||||||
|
| 2024 |
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| 2023 |
|
| 2024 |
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| 2023 |
| ||||
網站管理 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
廣告和內容營業收入 |
|
|
|
|
|
|
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|
|
| ||||
產品銷售 |
|
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| ||||
數字產品銷售 |
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| ||||
總營業收入 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
公司沒有任何單一客戶在截至2024年和2023年9月30日的三個和九個月內佔據超過
| 10 |
| 目錄 |
收入成本
產品營業收入的成本主要包括與公司在線市場銷售的產品採購和運輸相關的成本，以及其服務收入的成本，其中包括網站內容創建成本（包括合同勞動力）、域名和託管成本以及與網站運營相關的某些軟件成本。
服務收入成本主要包括與通過公司在線市場出售的產品的採購和運輸相關的成本，以及其服務收入的成本，其中包括網站內容創作成本（包括合同勞工）、域名和託管成本以及與網站運營相關的一些軟件成本。
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.
11 |
| 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 |
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| ||
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| |
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| Amount |
| |
Cash paid to seller |
| $ |
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Notes payable issued to seller |
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Options to purchase common shares issued to seller |
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Estimated fair value of additional earn-out payments |
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Series A Preferred Shares issued to seller |
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| |
Fair value of 12% equity interest in RevenueZen retained by Sellers |
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| |
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 |
|
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Non-Compete agreement |
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| |
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 |
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| Amount |
| |
Cash paid to seller |
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| |
Notes payable issued to seller |
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Series A Preferred Shares issued to seller |
|
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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 |
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| |
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Developed technology |
| $ |
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Customer relationships |
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Trademarks and Trade Names |
|
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Non-Compete agreement |
|
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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, |
| ||||||||||
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| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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Revenue |
| $ |
|
| $ |
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| $ |
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| $ |
| ||||
Operating loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss attributable to common shareholders |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net loss per common share |
| $ | ( | ) |
| $ | ( | ) |
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| ( | ) |
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| ( | ) |
Weighted Average common shares outstanding |
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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
| 15 |
| 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 |
|
|
|
|
|
|
| |||
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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| Table of Contents |
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 |
| Table of Contents |
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 $
| 19 |
| Table of Contents |
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.
| 21 |
| Table of Contents |
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”).
| 22 |
| 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; |
| 23 |
| 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.
| 24 |
| 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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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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