WILMINGTON, Del., April 02, 2024 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year ended December 31, 2023. The Company's Annual Report Form 10-K was filed with the Securities and Exchange Commission on April 1, 2024 and is available on the SEC's website at www.sec.gov.
Recent Corporate Highlights
Completed the acquisition of RevenueZen, a provider of B2B marketing services with a strong reputation and search engine presence, in January 2024
Completed a Reg D Preferred Shares Raise, in late 2023.
Launched a $2.5MM joint venture with private investors to acquire more B2B marketing agencies aimed at helping ONFO reach profitability, in March 2024.
Fourth Quarter and Year End 2023 Financial Highlights
Fourth quarter revenue grew 13% to $1.27M vs. $1.12M in the prior year period and vs. $1.31M in 3Q23
Fourth quarter gross profit grew 11% to $0.84M vs. $0.75M in the prior year period and vs. $0.85M in 3Q23
Fourth quarter total operating expenses decreased 12% to $1.67M vs. $1.91M in the prior year period and vs. $5.59M in 3Q23
Fourth quarter net loss to common shareholders decreased to $0.9M vs. $1.36M in the prior year period and vs. $4.79M in 3Q23
Revenue grew 136% YOY to $5.24M in 2023 vs. $2.22M in 2022
Gross profit grew 171% to $3.24M vs $1.20M in 2022
Total cash operating expenses grew 116% to $11.48M vs. $5.31M in 2022
Net loss to common shareholders grew 89% to $8.37M vs. a net loss of $4.43M in 2022
Cash at 12/31/23 was $0.98M vs. $6.70M at 12/31/22
“The 4th Quarter 2023 saw us raise additional capital via Series A preferred shares and promissory notes, which we used to close on an acquisition on 1/1/24, and continue our efforts to reduce expenses and become lean. While we made significant progress, and those efforts have continued to lead to improved results in Q1 of 2024 as well, we acknowledge that there is still more work to be done,” commented Onfolio CEO Dominic Wells.
“2023 was a formative year for us as we navigated our first full year as a public company. The operational results improved considerably as the year went on, and this was reflected gradually in our financial results, although not at the pace we would’ve like to see.
“We spent 2023 addressing our lack of profitability by improving our operational efficiencies, and by exploring capital raising strategies beneficial to shareholders, favouring debt over additional equity to avoid dilution.
“We were met with several headwinds in this area – our modest revenues and limited history meant that we were receiving capital offers for insufficient amounts or prohibitive interest rates, and in many cases both. We opted against capital and terms that would not allow us to buy the accretive cashflow necessary to substantially reduce our ongoing financial burn.
“With substantial revenue growth throughout 2023 versus 2022, and now with a growing history, we are seeing more capital availability, and we’re now assessing optimal ways to extend our financial runway and achieve profitability.
“One such source of capital that is already in process is the joint venture we are pursuing with private accredited investors only to co-invest in upcoming acquisitions (“Onfolio Agency SPV offering”). Information on the Onfolio Agency SPV offering can be found at https://onfospv.com.
“Although the broader economic climate made more funding scarce for us, it has paradoxically brought profitability within closer reach by equally affecting our acquisition targets.
“Earlier, we anticipated needing an additional $5-$10M to acquire enough free cash flow to reach profitability. Now, based on our current pipeline, reduced expenses, and the deal structures we are currently working on, we estimate needing approximately $1M to $1.5M.
“The market's capital shortage means that our target companies require less cash up front as part of the total consideration, have fewer offers from other buyers, and have lower overall asking prices.
“We also don’t need a large sum available to close on each acquisition. Some of them can be acquired for as little as $300,000 cash up front, ranging up to $900,000 for larger transactions. In these acquisitions, the cash up front component is around 30% of the acquisition price, meaning we can acquire cashflow for much less up-front capital than previously.
“Shareholders will note the recent RevenueZen acquisition exemplifies such a favorable deal structure, and so far, we consider the performance of said acquisition in the three months we’ve owned it to be strong.
“We believe the money we raise in the Onfolio Agency SPV offering or through other means, will enable us to acquire the requisite online businesses to attain profitability, and so we feel we are closer than ever to becoming FCF positive and continuing our march forward.
“We are also making progress with our existing portfolio and corporate overheads, continually looking for ways to reduce expenses, grow revenues, and improve profitability, agnostic of new acquisitions. As always, our goal is to reach profitability and scale from there,” concluded Mr Wells.
About Onfolio Holdings
Onfolio Holdings acquires controlling interests in and actively manage small online businesses that we believe (i) operate in sectors with long-term growth opportunities, (ii) have positive and stable cash flows, (iii) face minimal threats of technological or competitive obsolescence and (iv) can be managed by our existing team or have strong management teams largely in place. Through the acquisition and growth of a diversified group of online businesses with these characteristics, we believe we offer investors in our shares an opportunity to diversify their own portfolio risk. Our company excels at finding acquisition opportunities where the seller has not fully optimized their business, and our experience and skillset allows us 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 1A "Risk Factors" in our most recent Form 10-K; other risks to which our company is subject; 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.
