Onfolio (US:ONFO)2025-08-14 13:31PART I Item 1. Financial Statements (Unaudited) Unaudited H1 2025 financials show revenue up to $5.96 million, net loss widened, assets decreased, and cash low Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $8.83 million, liabilities decreased, and equity slightly increased | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,831,744 | $9,592,697 | | Total Current Assets | $1,278,656 | $1,436,561 | | Intangible assets, net | $2,720,986 | $3,323,211 | | Goodwill | $4,203,145 | $4,210,557 | | Total Liabilities | $4,341,465 | $5,243,003 | | Total Current Liabilities | $2,560,136 | $3,744,003 | | Total Stockholders' Equity | $4,490,279 | $4,349,694 | Consolidated Statements of Operations and Comprehensive Loss For the six months ended June 30, 2025, revenue grew 80% to $5.96 million, but net loss widened to $1.56 million | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $3,148,209 | $1,726,599 | $5,960,152 | $3,313,501 | | Gross Profit | $1,938,277 | $975,431 | $3,645,397 | $1,979,767 | | Loss from Operations | ($506,523) | ($606,425) | ($1,292,064) | ($1,061,804) | | Net Loss to Common Shareholders | ($665,534) | ($712,257) | ($1,563,842) | ($1,271,064) | | Basic and Diluted EPS | ($0.13) | ($0.14) | ($0.30) | ($0.25) | Consolidated Statements of Cash Flows H1 2025 saw reduced cash used in operations to $575,164, increased cash from financing, and a period-end cash balance of $514,259 | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($575,164) | ($763,747) | | Net cash used in investing activities | $0 | ($304,000) | | Net cash provided by financing activities | $585,097 | $415,749 | | Net Change in Cash | $37,385 | ($672,236) | | Cash, End of Period | $514,259 | $310,025 | Notes to the Consolidated Financial Statements Notes detail business segments, acquisitions, assets, equity, debt, and contingent liabilities, highlighting significant going concern uncertainty - The company operates in two segments: Business to Business (B2B) and Business to Consumer (B2C), organized by the nature of products, services, and customer types2776 - The financial statements have been prepared on a going concern basis, but the company's recurring losses and need for additional financing raise substantial doubt about its ability to continue as a going concern75 - The company has several contingent consideration liabilities from acquisitions, including potential earn-out payments for the BWPS, RevenueZen, and First Page acquisitions143146148 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports strong Q2 2025 revenue growth to $3.1 million driven by acquisitions, but recurring losses raise going concern doubt Overview Onfolio Holdings achieved 82% Q2 2025 revenue growth to $3.1 million driven by acquisitions, narrowing operating loss - Q2 2025 revenue reached $3.1 million, an 82% increase from Q2 2024, primarily due to the Eastern Standard and DDS Rank acquisitions153 - Loss from operations improved to ($507,000) in Q2 2025 from ($606,000) in Q2 2024; excluding non-recurring items, the loss would have been significantly lower154 - The company launched a new venture, Pace Generative LLC, in May 2025, expected to contribute to future revenue and profit155 Results of Operations Q2 2025 revenue grew 82% with improved gross profit, while H1 revenue grew 80% but operating expenses increased, widening operating loss | Revenue (Three Months Ended June 30) | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue, services | $2,062,603 | $993,166 | $1,069,437 | 108% | | Revenue, product sales | $1,085,606 | $733,433 | $352,173 | 48% | | Total Revenue | $3,148,209 | $1,726,599 | $1,421,610 | 82% | | Revenue (Six Months Ended June 30) | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue, services | $3,859,198 | $1,716,717 | $2,142,481 | 125% | | Revenue, product sales | $2,100,954 | $1,596,784 | $504,170 | 32% | | Total Revenue | $5,960,152 | $3,313,501 | $2,646,651 | 80% | - The increase in Selling, General and Administrative expenses for Q2 2025 was primarily due to higher advertising costs ($391,000), increased amortization ($176,000), and other G&A costs ($93,000)166 Liquidity and Capital Resources Recurring losses and negative cash flow raise substantial doubt about going concern, necessitating additional capital beyond $514,259 cash on hand - The company's recurring losses and negative cash flows have led management and auditors to conclude that substantial doubt exists about its ability to continue as a going concern195 - Net cash used in operating activities for the six months ended June 30, 2025, was $575,164, an improvement from $763,747 in the same period of 2024197 - Financing activities provided $585,097 in cash during the first six months of 2025, mainly from the sale of Series A preferred stock199 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company - The company has indicated that this disclosure is not applicable211 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal financial controls - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025213 - Material weaknesses were identified in several areas of internal control over financial reporting215219 - Ineffective review and documentation of manual journal entries due to small staff size - Ineffective controls over accounting for website design, implementation, and management revenues - Ineffective controls over accounting for impairment of goodwill/intangible assets and purchase accounting PART II Item 1. Legal Proceedings The company is not aware of any material legal proceedings that would adversely affect its business or financial condition - The company reports no material legal proceedings222 Item 1A. Risk Factors Key risks include a history of operating losses, substantial doubt about going concern, and the need for additional capital - The company has incurred operating losses since its inception and anticipates they will continue through at least 2025224 - The company's independent registered public accounting firm has issued a going concern opinion, expressing substantial doubt about its ability to continue operations for the next twelve months226 - Additional capital is required to fund the business plan and growth, with no assurance such financing will be available on acceptable terms229231 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In Q2 2025, the company sold 5,200 shares of Series A preferred stock for $130,000 through unregistered sales, relying on exemptions - In Q2 2025, the company sold 5,200 shares of Series A preferred stock for total proceeds of $130,000232 Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported234 Item 4. Mine Safety Disclosures This section is not applicable to the company - Not applicable235 Item 5. Other Information CEO Dominic Wells' base salary was increased to $240,000 annually, effective January 1, 2025, with no Rule 10b5-1 trading plan changes - CEO Dominic Wells' base salary was increased to $240,000 per year, effective January 1, 2025236 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the CEO's employment agreement amendment and officer certifications