Onfolio (ONFO) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited financial information, including statements, management's analysis, and internal controls Item 1. Financial Statements (Unaudited) This section presents Onfolio Holdings Inc.'s unaudited consolidated financial statements, including balance sheets, operations, and cash flows, along with notes Consolidated Balance Sheets Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $9,446,646 | $9,592,697 | | Total Current Assets | $1,602,668 | $1,436,561 | | Goodwill | $4,203,145 | $4,210,557 | | Total Liabilities | $4,453,144 | $5,243,003 | | Total Current Liabilities | $2,614,144 | $3,744,003 | | Total Stockholders' Equity | $4,993,502 | $4,349,694 | Consolidated Statements of Operations Consolidated Operations Highlights (For the Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $2,811,943 | $1,586,902 | | Gross Profit | $1,707,120 | $1,004,336 | | Loss from Operations | ($785,541) | ($455,379) | | Net Loss | ($806,428) | ($477,826) | | Net Loss to Common Shareholders | ($898,308) | ($558,807) | | Net Loss per Share (Basic & Diluted) | ($0.18) | ($0.11) | Consolidated Statements of Cash Flows Consolidated Cash Flow Highlights (For the Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($145,049) | ($431,007) | | Net cash used in investing activities | $0 | ($250,000) | | Net cash provided by financing activities | $297,831 | $264,135 | | Net Change in Cash | $189,241 | ($452,484) | | Cash, End of Period | $666,115 | $529,777 | Notes to the Consolidated Financial Statements - The company operates in two segments: Business to Business (B2B) and Business to Consumer (B2C), earning revenue from website management, advertising, content placement, and product sales[24] - A going concern warning is issued, citing recurring losses and the need for future financing, which raises substantial doubt about the Company's ability to continue operations for the next fiscal year[73] Disaggregated Revenue (Three Months Ended March 31) | Revenue Type | 2025 | 2024 | | :--- | :--- | :--- | | Website management | $941,465 | $24,000 | | Advertising and content revenue | $855,130 | $699,551 | | Product sales | $87,528 | $176,068 | | Digital Product Sales | $927,820 | $687,283 | | Total revenue | $2,811,943 | $1,586,902 | - In Q1 2025, the B2B segment generated $1.7M in revenue with an operating loss of $51k, while the B2C segment generated $1.1M in revenue with an operating income of $228k[79] - The company has several earn-out commitments, including a final agreed amount of $682,000 for the RevenueZen acquisition, which is being settled through a combination of cash, profit sharing, stock options, preferred stock, and a promissory note[138] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operational results, highlighting significant revenue growth, increased net loss due to non-cash expenses, and ongoing going concern risks - Revenue for Q1 2025 was $2.8M, an 87% increase from $1.5M in Q1 2024. February 2025 was the first month with over $1M in revenue[144] - The increase in net loss from $477k in Q1 2024 to $806k in Q1 2025 is primarily attributed to a $272k one-time stock-based compensation expense and $175k in higher amortization expense[146] - Cash used in operations improved, decreasing to $145k in Q1 2025 from $431k in Q1 2024, reflecting better operational discipline and revenue contribution[145][176] - The 77% YoY revenue growth was primarily driven by the Eastern Standard acquisition (approx. $917,500 revenue contribution) and the DDS Rank acquisition (approx. $52,500 contribution)[154] - The company's recurring losses and negative cash flows raise substantial doubt about its ability to continue as a going concern, and it may need to raise additional funds to continue operations[174] Quantitative and Qualitative Disclosures About Market Risk The company deems this section not applicable to its current operations and financial condition - This item is reported as 'Not applicable'[190] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[190] - A material weakness was identified due to the company's small size and limited personnel, leading to ineffective controls over manual journal entries[195] - Ineffective controls were also noted over the accounting for website design/implementation revenues and the impairment of goodwill and intangible assets[195] - Management is working to remediate these weaknesses by adding accounting personnel and implementing stronger procedures[193] PART II. OTHER INFORMATION This section covers other relevant information, including legal proceedings, risk factors, equity sales, and various disclosures Legal Proceedings The company is not currently involved in any legal proceedings expected to materially adversely affect its business, financial condition, or operating results - The Company is currently not aware of any legal proceedings or claims that will have a material adverse effect on its business[198] Risk Factors This section outlines significant risks, including a history of operating losses, substantial doubt about going concern, and the critical need for additional capital - The company has a history of operating losses since its inception in 2020 and anticipates these losses will continue through at least 2025[200] - The independent registered public accounting firm has expressed substantial doubt about the company's ability to continue as a going concern[202] - The company requires additional capital to support its business plan and growth, and there is no assurance that such financing will be available on acceptable terms, if at all[205][206] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company sold unregistered Series A preferred stock to raise capital and fulfill an earnout payment obligation - During Q1 2025, the company sold 28,000 shares of Series A preferred stock at $25 per share, raising a total of $700,000[209] - On February 28, 2025, the company issued 2,800 shares of Series A preferred stock, valued at $70,000, as part of an earnout payment for the RevenueZen acquisition[210] Defaults Upon Senior Securities The company reports no defaults on its senior securities during the reporting period - This item is reported as 'None'[212] Mine Safety Disclosures This section is not applicable to the company's business operations - This item is reported as 'Not applicable'[213] Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q1 2025 - During Q1 2025, no directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities intended to satisfy the conditions of Rule 10b5-1(c)[214] Exhibits This section lists exhibits filed with the Form 10-Q, including required certifications and interactive data files (XBRL) - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by SEC rules (Exhibits 31.1, 31.2, 32.1, 32.2)[215] - Inline XBRL documents are filed as exhibits (101.INS, 101.SCH, etc.) to provide structured financial data[215]