onfolio_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ___________

Commission File Number: 001-41466

ONFOLIO HOLDINGS INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		37-1978697
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1007 North Orange Street, 4th Floor, Wilmington, Delaware		19801
(Address of principal executive offices)		(Zip Code)

(682) 990-6920

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	ONFO	Nasdaq Capital Market
Warrants To Purchase Common Stock	ONFOW	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of common stock outstanding as of November 14, 2023 was 5,110,195.

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4

	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	4

	Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months ended September 30, 2023 and 2022	5

	Consolidated Statements of Stockholders’ Equity (Deficit) for the Nine Months ended September 30, 2023 and 2022	6

	Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2023 and 2022	7

	Notes to the Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	31

Item 3.	Defaults Upon Senior Securities	31

Item 4.	Mine Safety Disclosures	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

Signatures		33

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. You should not place undue reliance on these forward-looking statements.

Examples of forward-looking statements include, but are not limited to:

	●	the anticipated timing of the development of future products or services;
	●	projections of costs, revenue, earnings, capital structure and other financial items;
	●	statements of our plans and objectives;
	●	statements regarding the capabilities of our business operations;
	●	statements of expected future economic performance;
	●	statements regarding competition in our market; and
	●	assumptions underlying statements regarding us or our business.

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:

	●	our ability to manage our current and projected financial position and estimated cash burn rate, including our estimates regarding expenses, future revenues and capital requirements, and ultimately our ability to continue as a going concern;
	●	our ability to raise additional capital or additional funding to further develop and expand our business to meet our long-term business objectives. We have limited revenues and we cannot predict when or if we will achieve significant revenues and sustained profitability;
	●	our ability to achieve significant revenues and sustained profitability;
	●	changes in customer demand;
	●	our ability to develop our brands cost-effectively, to attract new customers and retain customers on a cost-effective basis;
	●	our ability to compete in the markets in which our website participate;
	●	our ability to make strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses;
	●	our ability to continue to successfully manage our websites on a combined basis;
	●	security breaches, cybersecurity attacks and other significant disruptions in our information technology systems;
	●	developments and changes in laws and regulations, including increased regulation of our industry through legislative action and revised rules and standards;
	●	the occurrence of hostilities, political instability or catastrophic events and wars;
	●	Our ability to maintain the listing or trading of our common stock and warrants on the NASDAQ Capital Market and the potential impact on our business if we fail to do so;
	●	natural events such as severe weather, fires, floods and earthquakes, or man-made or other disruptions of our operating systems, structures or equipment;
	●	other risks to which our Company is subject; and
	●	other factors beyond the Company’s control.

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under Part I Item 1.A “Risk Factors” contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Table of Contents

ITEM 1. FINANCIAL STATEMENTS.

Onfolio Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
	September 30			December 31
	2023			2022
Assets

Current Assets:
Cash and cash equivalents	$	3,373,178		$	6,701,122
Accounts receivable, net		97,522			137,598
Inventory		114,492			105,129
Prepaids and other current assets		121,557			212,180
Total Current Assets		3,706,749			7,156,029

Intangible assets		3,280,243			3,864,618
Goodwill		1,165,636			4,209,126
Due from related party		156,952			111,720
Investment in unconsolidated joint ventures, cost method		154,007			154,007
Investment in unconsolidated joint ventures, equity method		274,774			280,326

Total Assets	$	8,738,361		$	15,775,826

Liabilities and Stockholder’s Equity

Current Liabilities:
Accounts payable and other current liabilities	$	431,189		$	550,454
Dividends payable		49,341			54,404
Acquisition notes payable		2,416,323			2,456,323
Notes payable		-			68,959
Contingent consideration		60,000			60,000
Deferred revenue		228,960			113,251
Total Current Liabilities		3,185,813			3,303,391

Total Liabilities		3,185,813			3,303,391

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, $0.001 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 September 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 September 30, 2023 and December 31, 2022;		5,110			5,110
Additional paid-in capital		20,520,807			19,950,774
Accumulated other comprehensive income		73,910			96,971
Accumulated deficit		(15,047,349	)		(7,580,490	)
Total Stockholders' Equity		5,552,548			12,472,435

Total Liabilities and Stockholders' Equity	$	8,738,361		$	15,775,826

The accompanying notes are an integral part of these unaudited consolidated financial statements

Table of Contents

Onfolio Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022

Revenue, services	$	433,490		$	59,032		$	1,121,641		$	245,162
Revenue, product sales		879,821			293,268			2,853,447			850,883
Total Revenue		1,313,311			352,300			3,975,088			1,096,046

Cost of revenue, services		218,063			100,961			651,849			284,716
Cost of revenue, product sales		247,533			115,883			916,740			365,010
Total cost of revenue		465,596			216,844			1,568,589			649,726

Gross profit		847,715			135,457			2,406,499			446,320

Operating expenses
Selling, general and administrative		1,532,152			974,998			4,724,357			2,744,751
Professional fees		216,082			148,649			843,910			417,032
Impairment of intangible assets		3,762,579			-			3,952,516			-
Acquisition costs		77,525			-			285,532			240,468
Total operating expenses		5,588,338			1,123,647			9,806,315			3,402,251

Loss from operations		(4,740,623	)		(988,190	)		(7,399,816	)		(2,955,931	)

Other income (expense)
Equity method income		2,826			9,568			14,921			26,056
Dividend income		94			574			1,610			2,292
Interest income (expense), net		10,231			(2,739	)		68,989			(3,995	)
Other income		(5,687	)		11,091			2,937			12,445
Impairment of investments		-			-			-			(29,557	)
Loss on sale of asset		-			-			-			(34,306	)
Total other income		7,464			18,494			88,457			(27,065	)

Loss before income taxes		(4,733,159	)		(969,696	)		(7,311,359	)		(2,982,996	)

Income tax (provision) benefit		-			-			-			-

Net loss		(4,733,159	)		(969,696	)		(7,311,359	)		(2,982,996	)

Preferred Dividends		(54,231	)		-			(155,500	)		(88,848	)
Net loss to common shareholders	$	(4,787,390	)	$	(1,310,262	)	$	(7,466,859	)	$	(3,071,844	)

Net loss per common shareholder
Basic and diluted	$	(0.94	)	$	(0.30	)	$	(1.46	)	$	(1.15	)

Weighted average shares outstanding
Basic and diluted		5,110,195			3,284,339			5,110,195			2,675,634

The accompanying notes are an integral part of these unaudited consolidated financial statements

Table of Contents

Onfolio Holdings, Inc.
Consolidated Statements of Stockholders' Equity
For the Nine Months Ended Sept 30, 2023 and 2022
(Unaudited)

														Accumulated
									Additional					Other
	Preferred Stock, $0.001 Par value				Common Stock, $0.001 Par Value				Paid-In		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity

Balance, December 31, 2022		69,660	$	70		5,110,195	$	5,110	$	19,950,774	$	(7,580,490	)	$	96,971		$	12,472,435

Stock-based compensation		-		-		-		-		233,355		-			-			233,355
Preferred dividends		-		-		-		-		-		(51,025	)		-			(51,025	)
Foreign currency translation															(7,481	)		(7,481	)
Net loss		-		-		-		-		-		(1,284,075	)		-			(1,284,075	)

Balance, March 31, 2023		69,660		70		5,110,195		5,110		20,184,129		(8,915,590	)		89,490			11,363,209

Stock-based compensation		-		-		-		-		250,242		-			-			250,242
Preferred dividends		-		-		-		-		-		(50,244	)		-			(50,244	)
Foreign currency translation															20,067			20,067
Net loss		-		-		-		-		-		(1,294,125	)		-			(1,294,125	)

Balance, June 30, 2023		69,660		70		5,110,195		5,110		20,434,371		(10,259,959	)		109,557			10,289,149

Stock-based compensation		-		-		-		-		86,436		-			-			86,436
Preferred dividends		-		-		-		-		-		(54,231	)		-			(54,231	)
Foreign currency translation															(35,647	)		(35,647	)
Net loss		-		-		-		-		-		(4,733,159	)		-			(4,733,159	)

Balance, September 30, 2023		69,660	$	70		5,110,195	$	5,110	$	20,520,807	$	(15,047,349	)	$	73,910		$	5,552,548

Balance, December 31, 2021		56,800	$	57		2,353,645	$	2,354	$	6,522,382	$	(3,150,988	)	$	-		$	3,373,805

Preferred Shares for cash		5,200		5		-		-		129,995		-			-			130,000
Stock-based compensation		-		-		1,400		1		219,659		-			-			219,660
Preferred dividends		-		-		-		-		-		(43,120	)		-			(43,120	)
Net loss		-		-		-		-		-		(748,766	)		-			(748,766	)

Balance, March 31, 2022		62,000		62		2,355,045		2,355		6,872,036		(3,942,874	)		-			2,931,579

Preferred Shares for cash		7,460		7		-		-		186,493		-			-			186,500
Stock-based compensation		-		-		1,400		1		240,184		-			-			240,185
Preferred dividends		-		-		-		-		-		(45,728	)		-			(45,728	)
Net loss		-

SEC Form 10-Q filed by Onfolio Holdings Inc.