ONFO Onfolio Holdings Inc

Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW) (“Onfolio” or the “Company”), a holding company that acquires and manages a diversified portfolio of online businesses across a broad range of verticals, announces financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights

• Second quarter 2023 revenue grew 266% year-over-year to $1.31 million compared to $0.36 million in the second quarter of 2022
• Second quarter 2023 gross profit grew 445% to $0.82 million (representing gross margin of 62.3%) vs. $0.15 million in the prior year period (representing gross margin of 41.8%)
• Second quarter 2023 total operating expenses increased 56% to $2.12 million vs. $1.36 million in the prior year period
• Second quarter 2023 net loss to common shareholders expanded to $1.29 million vs. net $1.26 million net loss in the prior year period
• Cash at June 30, 2023 was $4.05 million vs. $6.70 million at December 31, 2022

“We made significant progress in reducing our sequential cash burn in the second quarter by 35%, as cash burn improved from approximately $940,000 in the first quarter, excluding one-time costs related to the Contentellect acquisition, to approximately $600,000 in the second quarter,” commented Onfolio CEO Dominic Wells. “There were cross-trends in some line items on the income statement that may mask this trend, along with a $189,000 impairment charge for a write-down in some of our smaller assets, but this is the main takeaway from our second quarter financial performance. This is consistent with comments from the first quarter regarding some one-time items and carryover expenses from 2022 being absent in subsequent quarters.

“Revenue stabilized sequentially and was rather flat, but we believe some of the AI tools we are developing will be incremental to our revenue base. Additionally, we believe previously announced new leadership at WPFolio and Proofread Anywhere will help us optimize revenue performance from these cornerstone acquisitions last fall.

“We continue to explore options for growth capital to make additional acquisitions. Meanwhile, we will continue to focus on reducing our cash burn and optimizing our organic revenue opportunities. We also continue to develop AI tools that we believe could have a significant impact on business development opportunities as well as help us further optimize our revenue opportunities and effectively manage expenses,” concluded Mr. Wells.

About Onfolio Holdings

Onfolio acquires and manages a diversified portfolio of online businesses across a broad range of verticals, each with a niche content focus and brand identity. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio’s experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.

Forward-Looking Statements

The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may,” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continues,” “estimates,” “projects,” “intends,” and similar expressions. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as revenue growth and earnings, and strategy for growth and financial results. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and other risks to which our Company is subject, and various other factors beyond the Company’s control. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

For investor inquiries:

CORE IR

investors@onfolio.com

516-222-2560

Onfolio Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
	June 302023				December 312022
Assets
Current Assets:
Cash and cash equivalents		4,052,355				6,701,122
Accounts receivable, net		106,357				137,598
Inventory		117,983				105,129
Prepaids and other current assets		164,389				212,180
Total Current Assets		4,441,084				7,156,029
Intangible assets		4,185,362				3,864,618
Goodwill		4,243,718				4,209,126
Due from related party		129,526				111,720
Investment in unconsolidated joint ventures, cost method		154,007				154,007
Investment in unconsolidated joint ventures, equity method		277,155				280,326
Total Assets	$	13,430,852			$	15,775,826
Liabilities and Stockholder’s Equity
Current Liabilities:
Accounts payable and other current liabilities	$	352,223			$	550,454
Dividends payable		46,620				54,404
Acquisition notes payable		2,416,323				2,456,323
Notes payable		19,215				68,959
Contingent consideration		60,000				60,000
Deferred revenue		247,322				113,251
Total Current Liabilities		3,141,703				3,303,391
Total Liabilities		3,141,703				3,303,391
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $0.001 per value, 5,000,000 shares authorized
Series A Preferred stock, $0.001 par value, 1,000,000 shares authorized, 69,660 issued and outstanding at June 30, 2023 and December 31, 2022;		70				70
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,110,195 issued and outstanding at June 30, 2023 and December 31, 2022;		5,110				5,110
Additional paid-in capital		20,434,371				19,950,774
Accumulated other comprehensive income		109,557				96,971
Accumulated deficit		(10,259,959	)			(7,580,490	)
Total Stockholders' Equity		10,289,149				12,472,435
Total Liabilities and Stockholders' Equity	$	13,430,852			$	15,775,826

Onfolio Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2023				2022				2023				2022
Revenue, services	$	295,750			$	68,143			$	688,151			$	186,130
Revenue, product sales		1,014,293				289,679				1,973,626				557,615
Total Revenue		1,310,043				357,822				2,661,777				743,745
Cost of revenue, services		129,622				55,416				433,786				183,755
Cost of revenue, product sales		364,850				152,697				669,207				249,127
Total cost of revenue		494,472				208,113				1,102,993				432,882
Gross profit		815,571				149,710				1,558,784				310,863
Operating expenses
Selling, general and administrative		1,572,825				1,035,463				3,192,205				1,769,753
Professional fees		303,443				161,751				627,828				268,383
Impairment of intangible assets		189,937				-				189,937				-
Acquisition costs		57,393				163,307				208,007				240,468
Total operating expenses		2,123,598				1,360,521				4,217,977				2,278,604
Loss from operations		(1,308,027	)			(1,210,811	)			(2,659,193	)			(1,967,741	)
Other income (expense)
Equity method income		5,207				6,309				12,095				16,488
Dividend income		247				1,333				1,516				1,718
Interest income (expense), net		2,626				1,144				58,758				(1,256	)
Other income		5,822				1,354				8,624				1,354
Impairment of investments		-				(29,557	)			-				(29,557	)
Loss on sale of asset		-				(34,306	)			-				(34,306	)
Total other income		13,902				(53,723	)			80,993				(45,559	)
Loss before income taxes		(1,294,125	)			(1,264,534	)			(2,578,200	)			(2,013,300	)
Income tax (provision) benefit		-				-				-				-
Net loss		(1,294,125	)			(1,264,534	)			(2,578,200	)			(2,013,300	)
Preferred Dividends		(50,244	)			(45,728	)			(101,269	)			(88,848	)
Net loss to common shareholders	$	(1,344,369	)		$	(1,310,262	)		$	(2,679,469	)		$	(2,102,148	)
Net loss per common shareholder
Basic and diluted	$	(0.26	)		$	(0.56	)		$	(0.52	)		$	(0.89	)
Weighted average shares outstanding
Basic and diluted		5,110,195				2,355,045				5,110,195				2,354,560

Onfolio Holdings, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2023 and 2022
(Unaudited)
	2023				2022
Cash Flows from Operating Activities
Net loss	$	(2,578,200	)		$	(2,013,300	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense		483,597				459,845
Equity method income		(12,095	)			(16,488	)
Dividends received from equity method investment		15,266				17,607
Loss on sale of asset		-				34,306
Amortization of intangible assets		361,108				-
Impairment of intangible assets		189,937				-
Net change in:
Accounts receivable		31,241				(23,026	)
Inventory		(12,854	)			(9,797	)
Prepaids and other current assets		47,791				(51,635	)
Accounts payable and other current liabilities		(198,231	)			72,638
Due to joint ventures		(17,806	)			(31,796	)
Deferred revenue		134,071				3,980
Due to related parties		-				(480	)
Net cash used in operating activities		(1,556,175	)			(1,558,146	)
Cash Flows from Investing Activities
Proceeds from sale of intangible assets		-				45,694
Cash paid to acquire business		(850,000	)			-
Investments in joint ventures		-				(22,500	)
Net cash used in investing activities		(850,000	)			23,194
Cash Flows from Financing Activities
Proceeds from sale of Series A preferred stock		-				316,500
Payments of preferred dividends		(109,053	)			(44,995	)
Payment of contribution to joint venture note payable		-				(35,000	)
Payments on acquisition note payable		(40,000	)			-
Proceeds from notes payable		-				44,000
Payments on note payables		(49,744	)			(31,151	)
Net cash provided by financing activities		(198,797	)			249,354
Effect of foreign currency translation		(43,795	)			-
Net Change in Cash		(2,648,767	)			(1,285,598	)
Cash, Beginning of Period		6,701,122				1,710,318
Cash, End of Period		4,052,355			$	424,720
Cash Paid For:
Income Taxes	$	-			$	-
Interest	$	18,836			$	1,256