Onfolio (ONFO) - 2025 Q3 - Quarterly Report

Financial Performance - Revenue for Q3 2025 was $2.7 million, a 36% increase compared to Q3 2024[154] - Loss from operations was $(268,000) in Q3 2025, an improvement from $(331,000) in Q3 2024[154] - Total revenue from services was $1,878,367, a 69% increase from $1,110,095 in Q3 2024[162] - The Company reported a net loss of $1,966,635 for the nine months ended September 30, 2025, compared to a net loss of $1,450,487 for the same period in 2024, representing an increase in net loss of approximately 36%[178] - Total revenue increased by $3,376,912, or 63%, for the nine months ended September 30, 2025, driven primarily by acquisitions, including approximately $3,340,000 from Eastern Standard and $91,300 from DDS Rank[178] - Revenue from services reached $5,737,565, a 103% increase from $2,826,812 in 2024, while product sales revenue increased by 19% to $2,964,620[178] Revenue Breakdown - B2B revenue increased by $720,128 or 70% in Q3 2025 compared to Q3 2024, primarily due to the Eastern Standard acquisition[173] - B2C revenue increased by $10,133 or 1% in Q3 2025 compared to Q3 2024[176] - B2B revenue increased by $2,795,216, or 107%, during the nine months ended September 30, 2025, largely due to acquisitions[189] - B2C revenue increased by $581,696, or 21%, primarily driven by digital product sales from the Proofread Anywhere subsidiary[192] Expenses and Costs - Total cost of revenue increased by $164,736 or 20% due to recent acquisitions[163] - General and administrative expenses rose by $508,011 or 38% in Q3 2025 compared to Q3 2024[166] - Cost of revenue increased by $1,145,756, or 54%, due to recent acquisitions, with service revenue costs rising significantly, while product sales costs decreased by 43%[180] - General and Administrative expenses rose by $2,259,314, or 59%, primarily due to increased advertising and marketing costs of $939,000 and non-cash stock-based compensation of $268,000[181] - Total other expense was $357,700 in Q3 2025, significantly higher than $12,281 in Q3 2024[169] - Total other expense was $423,893 for the nine months ended September 30, 2025, compared to $57,346 in 2024, largely due to increased interest expenses and losses on investments[184] Financing Activities - The company raised $1 million in gross proceeds in October 2025 through a private offering[157] - The company plans to pursue equity financing to accelerate growth and retire maturing seller notes[155] - The Company raised approximately $1,500,000 through private offerings of Series A preferred stock by September 30, 2025, indicating ongoing efforts to secure funding[194] Internal Controls and Compliance - As of September 30, 2025, the Company identified a material weakness in internal controls over financial reporting, which may lead to material misstatements not being detected[214] - Management is working on remediation plans, including adding accounting personnel and implementing stronger internal control procedures[216] - The Company reported that the design and maintenance of controls over accounting for website design and implementation revenues were ineffective, resulting in immaterial adjustments to financial statements[217] - The Company has concluded that, despite the identified material weaknesses, the consolidated financial statements fairly present its financial position in conformity with GAAP[215] - There have been no changes in internal control over financial reporting that materially affected the controls during the last fiscal quarter[219] Asset Management - The Company reviews the carrying value of long-lived assets for impairment at least annually, ensuring recoverability is measured against expected undiscounted cash flows[208] - The Company does not have any off-balance sheet arrangements that materially affect its financial condition[209] - Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the assets[206] Acquisition Details - The final earn-out amount for the RevenueZen Acquisition is agreed to be $682,000, with a cash payment of $72,000 and additional payments structured through profit sharing and stock options[210] - The Company has estimated remaining obligations under the revenue share provisions for the First Page Acquisition to be $103,654, resulting in a change in the fair value of contingent consideration of $67,384[210]