EX-99.3 4 onfolio_ex993.htm EX-99.3 onfolio_ex993.htm

EXHIBIT 99.3

 

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

 

The following unaudited pro forma combined financial data are presented to illustrate the effect of the following acquisitions (“the Acquisitions”):

 

1. the October 13, 2022, acquisition by the Company, from i2W Ltd, a company incorporated and registered in England and Wales (“Seller”), and Jonathan Kiekbusch, Ezekiel Daldy, and Lyndsay Kiekbusch, shareholders of the Seller (collectively, the “Guarantors”), for the purchase of all of the issued share capital (“Sale Shares”) of SEO Butler Limited, under the “i2W Share Purchase Agreement”. Seller is the owner of the legal and beneficial title to the Sale Shares of SEO Butler Limited ("SEO Butler"), which operates as a productised service business operated via the seobutler.com website and the custom build order management system on orders.seobutler.com and under the SEOButler and PBNButler names, which will be know as “SEO Butler” (the “SEO Butler Acquisition”); and

 

2. the October 14, 2022, acquisition (the “BCP Media Acquisition”) by the Company, from BCP Media, Inc., a Florida corporation (“BCP Media”), and Caitlin Pyle and Cody Lister, principals of BCP Media under the Asset Purchase Agreement (“BCP Agreement”). Pursuant to the BCP Agreement, the Company purchased from BCP Media, substantially all the Proofreading Business (defined below) assets of BCP Media and assigned the acquired assets to the Company, which, pursuant to the BCP Asset Purchase Agreement and certain ancillary agreements, will operate the business of online proofreading training (the “Proofreading Business”) via the following websites: ProofreadAnywhere.com, WorkAtHomeSchool.com, and WorkYourWay2020.com. Collectively, the acquired companies of SEO Butler and BCP Media will be referred to as the “Acquired Businesses.”

  

The following unaudited pro forma combined balance sheet data as of June 30, 2022 is presented as if the Acquisitions had occurred on June 30, 2022. The following unaudited pro forma combined statement of operations data for the six months ended June 30, 2022 and the year ended December 31, 2021 is presented as if the Acquisitions occurred on January 1, 2021.

 

The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances; however, the actual results could differ. The pro forma adjustments are directly attributable to the Acquisition and are expected to have a continuing impact on the results of operations of the Company. Management believes that all adjustments necessary to present fairly the unaudited pro forma combined financial statements have been made. The unaudited pro forma combined financial statements are presented for informational purposes only and are not necessarily indicative of the results of operations that would have resulted had the Acquisition been consummated on the dates indicated, and should not be construed as being representative of the Company’s future results of operations or financial position.

 

The Acquired Businesses assets, liabilities and results of operations presented herein were derived from the audited financial statements of the Acquired Businesses for the years ended December 31, 2021 and 2020, the unaudited interim financial statements for the six months ended June 30, 2022 for BCP Media, and for the years ended November 30, 2021 and 2020 and the unaudited interim financial statements for the six months ended May 31, 2022 for SEO Butler (collectively, the “Acquired Business Financial Statements”).

 

 

 

 

The unaudited pro forma combined financial statement data should be read in conjunction with (a) the historical consolidated financial statements and accompanying notes thereto of the Company for the year ended December 31, 2021, which were included in the Company’s Form S-1 Registration Statement for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on April 7, 2022, as amended (the “ Registration Statement”), (b) the historical unaudited consolidated quarterly financial statements and accompanying notes thereto of the Company for the six months ended June 30, 2022, which were included in the Company’s Form 10-Q for the six months ended June 30, 2022, as filed with the Securities and Exchange Commission on August 15, 2022 and (c) the Acquired Business Financial Statements, which are included as Exhibits 99.1 [and 99.2] to this Current Report on Form 8-K/A of which these Unaudited Pro Forma Combined Financial Statements are included as Exhibit 99.2/[99.3].

 

The unaudited pro forma combined financial statements included herein constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. See the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Information” in the Registration Statement and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, as filed with the Commission on November 11, 2022.

 

 

 

 

ONFOLIO HOLDINGS, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF JUNE 30, 2022

 

 

 

Consolidated Historical

June 30, 2022

 

 

SEO Butler

 

 

SEO Butler Pro Forma Adjustments

(See Notes)

 

 

 

BCP

Media

 

 

BCP Media Pro Forma Adjustments

(See Notes)

 

 

 

Other Transaction Accounting Adjustments

(See Notes)

 

 

 

Combined Pro Forma

June 30, 2022

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 424,720

 

 

 $ 87,221

 

 

 

 (950,000 )

 

{a)

 

 $ 833,434

 

 

 

 (2,933,434 )

 

(a)

 

 $ 12,434,485

 

 

(f)

 

 $ 9,896,426

 

Accounts receivable, net

 

 

 37,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 37,650

 

Deferred contract costs

 

 

 

 

 

 

 

 

 

 

 -

 

 

 

 

 

 93,404

 

 

 

 (93,404 )

 

(c)

 

 

 

 

 

 

 

 

 -

 

Inventory

 

 

 108,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 108,194

 

Prepaid expenses and other current assets

 

 

 211,426

 

 

 

 

 

 

 

 -

 

 

 

 

 

 2,545

 

 

 

 (2,545 )

 

(c)

 

 

 (179,016 )

 

(f)

 

 

 32,410

 

Total current assets

 

 

 781,990

 

 

 

 87,221

 

 

 

 (950,000 )

 

 

 

 

 929,383

 

 

 

 (3,029,383 )

 

 

 

 

 12,255,469

 

 

 

 

 

 10,074,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Assets, net

 

 

 -

 

 

 

 

 

 

 

 -

 

 

 

 

 

 9,996

 

 

 

 (9,996 )

 

(c)

 

 

 

 

 

 

 

 

 -

 

Intangible assets

 

 

 1,308,260

 

 

 

 

 

 

 

 506,000

 

 

(d)

 

 

 

 

 

 

 1,826,000

 

 

(d)

 

 

 

 

 

 

 

 

 3,640,260

 

Due from related party

 

 

 138,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 138,786

 

Investment in unconsolidated joint ventures, cost method

 

 

 160,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 160,901

 

Investment in unconsolidated joint ventures, equity method

 

 

 278,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 278,263

 

Goodwill

 

 

 -

 

 

 

 

 

 

 

 357,020

 

 

(e)

 

 

 

 

 

 

 3,249,014

 

 

(e)

 

 

 

 

 

 

 

 

 3,606,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

TOTAL ASSETS

 

 

 2,668,200

 

 

 

 87,221

 

 

 

 (86,980 )

 

 

 

 

 939,379

 

 

 

 2,035,635

 

 

 

 

 

 12,255,469

 

 

 

 

 

 17,898,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

 

 295,181

 

 

 

 241

 

 

 

 -

 

 

 

 

 

 1,234

 

 

 

 (1,234 )

 

(c)

 

 

 

 

 

 

 

 

 295,422

 

Dividends payable

 

 

 45,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 45,351

 

Due to joint ventures

 

 

 185,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 185,000

 

Acquisition notes payable

 

 

 17,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 17,323

 

Notes Payable

 

 

 41,363

 

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 

 

 2,399,000

 

 

(b)

 

 

 

 

 

 

 

 

 2,440,363

 

Contingent consideration

 

 

 

 

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

(b)

 

 

 

 

 

 

 

 

 -

 

Deferred Revenue

 

 

 35,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 516,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 551,994

 

Total current liabilities

 

 

 620,198

 

 

 

 241

 

 

 

 -

 

 

 

 

 

 517,248

 

 

 

 2,397,766

 

 

 

 

 

 -

 

 

 

 

 

 3,535,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 620,198

 

 

 

 241

 

 

 

 -

 

 

 

 

 

 517,248

 

 

 

 2,397,766

 

 

 

 

 

 -

 

 

 

 

 

 3,535,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net parent investment

 

 

 -

 

 

 

 373,620

 

 

 

 (373,620 )

 

(c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Preferred stock

 

 

 69

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 69

 

Common stock

 

 

 2,356

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 93

 

 

 

 (93 )

 

(c)

 

 

 2,754

 

 

(f)

 

 

 5,110

 

Additional paid-in capital

 

 

 7,298,713

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 215,487

 

 

 

 (155,487 )

 

(b), (c)

 

 

 12,252,715

 

 

(f)

 

 

 19,611,428

 

Retained earnings (accumulated deficit)

 

 

 (5,253,136 )

 

 

 (286,640 )

 

 

 286,640

 

 

(c)

 

 

 206,551

 

 

 

 (206,551 )

 

(c)

 

 

 -

 

 

 

 

 

 (5,253,136 )

Total stockholders' equity

 

 

 2,048,002

 

 

 

 86,980

 

 

 

 (86,980 )

 

 

 

 

 422,131

 

 

 

 (362,131 )

 

 

 

 

 12,255,469

 

 

 

 

 

 14,363,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

 $ 2,668,200

 

 

 $ 87,221

 

 

 $ (86,980 )

 

 

 

 $ 939,379

 

 

 $ 2,035,635

 

 

 

 

 $ 12,255,469

 

 

 

 

 $ 17,898,924

 

 

 

 

 

ONFOLIO HOLDINGS, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

 

 

 

Consolidated

Historical

June 30, 2022

 

 

SEO Butler

 

 

SEO Butler Pro Forma Adjustments

 

 

 

BCP Media

 

 

BCP Media Pro Forma Adjustments

 

 

 

Transaction Accounting Adjustments

 

 

 

Combined

Pro Forma 

June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 $ 357,822

 

 

 $ 332,527

 

 

 $ -

 

 

 

 

 $ 1,650,558

 

 

 $ -

 

 

 

 

 $ -

 

 

 $ 2,340,907

 

Cost of revenues

 

 

 208,112

 

 

 

 210,573

 

 

 

 -

 

 

 

 

 

 703,290

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 1,121,975

 

Gross profit

 

 

 149,710

 

 

 

 121,954

 

 

 

 -

 

 

 

 

 

 947,268

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 1,218,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 1,031,663

 

 

 

 51,773

 

 

 

 44,583

 

 

(f)

 

 

 312,832

 

 

 

 140,917

 

 

(f)

 

 

 -

 

 

 

 1,581,768

 

Professional Fees

 

 

 328,858

 

 

 

 

 

 

 

 -

 

 

 

 

 

 127,489

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 456,347

 

Total operating expenses

 

 

 1,360,521

 

 

 

 51,773

 

 

 

 44,583

 

 

 

 

 

 440,321

 

 

 

 140,917

 

 

 

 

 

 -

 

 

 

 2,038,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

 (1,210,811 )

 

 

 70,181

 

 

 

 (44,583 )

 

 

 

 

 506,947

 

 

 

 (140,917 )

 

 

 

 

 -

 

 

 

 (819,183 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Method Income

 

 

 6,309

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 6,309

 

Dividend Income

 

 

 1,333

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 1,333

 

Interest income (expense), net

 

 

 1,144

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 (35,985 )

 

(g)

 

 

 -

 

 

 

 (34,841 )

Other income 

 

 

 1,354

 

 

 

 3

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 1,357

 

Other expense

 

 

 (29,557 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 (29,557 )

Loss on sale of asset

 

 

 (34,306 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 (34,306 )

Total other income (expense)

 

 

 (53,723 )

 

 

 3

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 (35,985 )

 

 

 

 

 -

 

 

 

 (89,705 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

 (1,264,534 )

 

 

 70,184

 

 

 

 (44,583 )

 

 

 

 

 506,947

 

 

 

 (176,902 )

 

 

 

 

 -

 

 

 

 (908,888 )

Income tax benefit

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

Net income (loss)

 

 

 (1,264,534 )

 

 

 70,184

 

 

 

 (44,583 )

 

 

 

 

 506,947

 

 

 

 (176,902 )

 

 

 

 

 -

 

 

 

 (908,888 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Dividends on Preferred stock

 

 

 (45,728 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (45,728 )

Net income (loss) available to Common Shareholders

 

 $ (1,310,262 )

 

 $ 70,184

 

 

 $ (44,583 )

 

 

 

 $ 506,947

 

 

 $ (176,902 )

 

 

 

 $ -

 

 

 $ (45,728 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 $ (0.56 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $ (0.02 )

Diluted

 

 $ (0.56 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $ (0.02 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings/(loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 2,355,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,355,045

 

Diluted

 

 

 2,355,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,355,045

 

 

 

 

 

 ONFOLIO HOLDINGS, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2021

 

 

 

Consolidated

Historical

December 31, 2021

 

 

SEO Butler

 

 

SEO Butler Pro Forma Adjustments

 

 

 

BCP

Media

 

 

BCP Media Pro Forma Adjustments

 

 

 

Other Transaction Accounting Adjustments

 

 

Combined

Pro Forma 

December 31, 2021

 

Revenues

 

 $ 1,808,543

 

 

 $ 720,610

 

 

 $ -

 

 

 

 

 $ 3,762,496

 

 

 $ -

 

 

 

 

 $ -

 

 

 $ 6,291,649

 

Cost of revenues

 

 

 1,073,509

 

 

 

 366,382

 

 

 

 -

 

 

 

 

 

 1,673,197

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 3,113,088

 

Gross profit

 

 

 735,034

 

 

 

 354,228

 

 

 

 -

 

 

 

 

 

 2,089,299

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 3,178,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 2,479,152

 

 

 

 140,189

 

 

 

 89,167

 

 

 (g)

 

 

 1,245,254

 

 

 

 281,833

 

 

 (g)

 

 

 -

 

 

 

 4,425,396

 

Professional Fees

 

 

 208,193

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 220,232

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 428,425

 

Total operating expenses

 

 

 2,687,345

 

 

 

 140,189

 

 

 

 89,167

 

 

 

 

 

 1,465,486

 

 

 

 281,833

 

 

 

 

 

 -

 

 

 

 4,853,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

 (1,952,311 )

 

 

 214,039

 

 

 

 (89,167 )

 

 

 

 

 623,813

 

 

 

 (281,833 )

 

 

 

 

 -

 

 

 

 (1,239,016 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Method Income

 

 

 50,684

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 50,684

 

Dividend Income

 

 

 9,970

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 9,970

 

Interest income (expense), net

 

 

 (9,805 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 (14,702 )

 

 

 (71,970 )

 

(h)

 

 

 -

 

 

 

 (97,677 )

Other income 

 

 

 -

 

 

 

 2

 

 

 

 -

 

 

 

 

 

 250,000

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 250,611

 

Forgiveness of debt

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 20,832

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 20,832

 

Total other income (expense)

 

 

 50,849

 

 

 

 2

 

 

 

 -

 

 

 

 

 

 256,130

 

 

 

 (71,970 )

 

 

 

 

 -

 

 

 

 234,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

 (1,901,462 )

 

 

 214,041

 

 

 

 (89,167 )

 

 

 

 

 879,943

 

 

 

 (353,803 )

 

 

 

 

 -

 

 

 

 (1,004,596 )

Income tax (provision) benefit

 

 

 1,314

 

 

 

 (29,424 )

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 (28,110 )

Net income (loss)

 

 

 (1,900,148 )

 

 

 184,617

 

 

 

 (89,167 )

 

 

 

 

 879,943

 

 

 

 (353,803 )

 

 

 

 

 -

 

 

 

 (1,032,706 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Dividends on Preferred stock

 

 

 (106,825 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 -

 

 

 

 (106,825 )

Net income (loss) available to Common Shareholders

 

 $ (2,006,973 )

 

 $ 184,617

 

 

 $ (89,167 )

 

 

 

 $ 879,943

 

 

 $ (353,803 )

 

 

 

 $ -

 

 

 $ (106,825 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 $ (0.96 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $ (0.05 )

Diluted

 

 $ (0.96 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $ (0.05 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings/(loss) per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 2,080,733

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,080,733

 

Diluted

 

 

 2,080,733

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,080,733

 

 

 

 

 

ONFOLIO HOLDINGS, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

 

1.

DESCRIPTION OF TRANSACTIONS

 

SEO Butler Acquisition

 

On October 6, 2022, the Company entered into a Share Purchase Agreement (“Share Purchase Agreement”) with i2W Ltd, a company incorporated and registered in England and Wales (“Seller”), and Jonathan Kiekbusch, Ezekiel Daldy, and Lyndsay Kiekbusch, shareholders of the Seller (collectively, the “Guarantors”), for the purchase of all of the issued share capital (“Sale Shares”) of SEO Butler Limited, a company incorporated and registered in England and Wales (“SEO Butler”). Seller is the owner of the legal and beneficial title to the Sale Shares of SEO Butler, which operates as a productised service business operated via the seobutler.com website and the custom build order management system on orders.seobutler.com and under the SEOButler and PBNButler names. The Guarantors have agreed to guarantee to the Company the due and punctual performance, observance and discharge by the Seller of all the Guaranteed Obligations (as defined in the Share Purchase Agreement) if and when they become performable or due under the Share Purchase Agreement.

 

Pursuant to the Share Purchase Agreement, and on the terms and subject to the conditions contained therein, at the closing, the Company purchased the Sale Shares from the Seller, all as more fully described in the Share Purchase Agreement. The aggregate purchase price paid by the Company was $950,000. The transaction closed on October 13, 2022 and will be accounted for as a business combination under ASC 805.

 

BCP Media Acquisition

 

On October 13, 2022, the Company entered into an Asset Sale and Purchase Agreement (“BCP Asset Purchase Agreement”) with BCP Media, Inc., a Florida corporation (“BCP Media”), and Caitlin Pyle and Cody Lister, principals of BCP Media.

 

Pursuant to the BCP Asset Purchase Agreement, the Company purchased from BCP Media, substantially all the Proofreading Business (defined below) assets of BCP Media and assigned the acquired assets to the Company, which, pursuant to the BCP Asset Purchase Agreement and certain ancillary agreements, will operate the business of online proofreading training (the “Proofreading Business”) via the following websites: ProofreadAnywhere.com, WorkAtHomeSchool.com, and WorkYourWay2020.com.

 

Pursuant to the BCP Asset Purchase Agreement, and subject to the terms and conditions contained therein, BCP Media sold to the Company the purchased assets, all as more fully described in the BCP Asset Purchase Agreement. The purchase price was paid as follows: $4,499,000, plus a warrant to purchase up to 20,000 shares of the Company’s common stock at the price of $4.75 per share (the “Warrant”), with $2,100,000 paid in cash at the closing and $2,399,000 paid via a promissory note (the “BCP Note”).

 

The BCP Note was made by the Company to BCP Media. The BCP Note has the principal sum of $2,399,000 (the “Loan Amount”) and it matures on the one year anniversary from the date of the BCP Note (the “Maturity Date”). Interest on the outstanding principal balance of, and all other sums owing under the Loan Amount, is three percent (3%) (the “Interest Rate”), compounded annually. Upon the occurrence of an Event of Default (as defined in the BCP Note), the Interest Rate automatically increases to the rate of eight percent (8%) per annum, compounded annually. The Loan Amount is payable as follows: (i) commencing on the date that is thirty (30) days from the date of the BCP Note, and continuing monthly on such same day thereafter, the Company shall make an interest only payment to BCP Media equal to $5,997.50 per month; and (ii) the entire Loan Amount, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.

 

The transaction closed on October 14, 2022 and will be accounted for as a business combination under ASC 805.

 

 

 

 

2.

BASIS OF PRESENTATION

 

The accompanying unaudited pro forma combined financial statements are based on the Company’s and the Acquired Businesses’ historical financial as adjusted to give effect to the pro forma adjustments necessary to reflect the Acquisitions and the Company’s new equity issuance to finance the acquisition. The unaudited pro forma combined statement of operations for the six months ended June 30, 2022 and the year ended December 31, 2021, gives effect to the Acquired Businesses as if it had occurred on January 1, 2022 and 2021, respectively and the pro forma combined balance sheet as of June 30, 2022 gives effect to the Acquisition as if it had occurred on June 30, 2022.

 

3.

PRELIMINARY PURCHASE PRICE ALLOCATIONS

 

The preliminary purchase price for the Acquired Businesses have been allocated to the assets acquired and liabilities assumed for purposes of this pro forma financial information based on their estimated relative fair values. The purchase price allocations herein are preliminary. The final purchase price allocations for the Acquired Businesses will be determined after completion of a thorough analysis to determine the fair value of all assets acquired and liabilities assumed but in no event later than one year following completion of the Acquisitions. Accordingly, the final acquisition accounting adjustments could differ materially from the accounting adjustments included in the pro forma financial statements presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of purchase price allocable to goodwill and could impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.

 

SEO Butler Preliminary Purchase Price Allocation 

 

The acquisition of SEO Butler is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:

 

Preliminary Purchase Price:

 

 

 

 

 

 

 

Cash

 

 $ 950,000

 

Total preliminary purchase consideration

 

 $ 950,000

 

 

 

 

 

 

Preliminary Purchase Price Allocation

 

 

 

 

Cash

 

 $ 87,221

 

Website domains

 

 

 70,000

 

Customer relationships

 

 

 316,000

 

Trademarks and trade names

 

 

 90,000

 

Non-compete agreement

 

 

 30,000

 

Liabilities assumed

 

 

 (241 )

Goodwill

 

 

 357,020

 

Net assets acquired

 

 $ 950,000

 

 

BCP Media Preliminary Purchase Price Allocation 

 

The acquisition of BCP Media is being accounted for as a business combination under Financial Accounting Standards Board Accounting Standards Codification (ASC) 805. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:

 

 

 

 

Preliminary Purchase Price:

 

 

 

 

 

 

 

Cash

 

 $ 2,100,000

 

Promissory Note

 

 

 2,399,000

 

Earn-out provision

 

 

 60,000

 

Total preliminary purchase consideration

 

 $ 4,559,000

 

 

 

 

 

 

Preliminary Purchase Price Allocation

 

 

 

 

Website domains

 

 $ 130,000

 

Customer relationships

 

 

 916,000

 

Trademarks and trade names

 

 

 700,000

 

Non-compete agreement

 

 

 80,000

 

Liabilities assumed – Deferred revenue

 

 

 516,014

 

Goodwill

 

 

 3,249,014

 

 Net assets acquired

 

 $ 4,559,000

 

 

4.

PRO FORMA ADJUSTMENTS

 

The unaudited pro forma combined statements of operations and balance sheets reflect the effect of the following pro forma adjustments:

 

(a)

Net pro forma impact to cash as follows:

 

Cash paid to sellers of SEO Butler

 

 $ (950,000 )

Cash paid to sellers of BCP Media

 

 

 (1,250,000 )

Remove historical cash of BCP Media

 

 

 (233,107 )

Net pro forma impact to cash

 

 $ 2,433,107

 

 

(b)

Other Consideration given for asset acquisitions consisting of:

 

Note payable bearing interest at 3% per annum with a maturity date of October 14, 2023

 

 $ 2,399,000

 

Warrant for the purchase of Onfolio common shares at an exercise price of $4.75

 

 

 60,000

 

Total other consideration given

 

 $ 2,459,000

 

 

(c)

Elimination of historical assets and liabilities not acquired as part Acquired Businesses

 

(d)

Estimated Fair Value of intangible assets acquired in acquisitions comprised of the following:

 

Intangible assets acquired from purchase of SEO Butler

 

 $ 506,000

 

Intangible assets acquired from purchase of BCP Media

 

 

 1,826,000

 

Total intangible assets acquired

 

 $ 2,332,000

 

 

(e)

Estimated Fair Value of goodwill acquired in business acquisitions

 

Goodwill acquired from purchase of SEO Butler

 

 $ 357,020

 

Goodwill acquired from purchase of BCP Media

 

 

 3,249,014

 

Total Goodwill acquired

 

 $ 3,606,034

 

 

 

 

 

(f)

On August 30, 2022, the Company completed its initial public offering, issuing 2,753,750 shares of common stock and 5,507,500 warrants (6,117,250 warrants including the option warrants), for net cash proceeds of $12,434,485. A portion of these proceeds were used to fund the cash portion of the consideration paid to the sellers of the Acquired Businesses. The Company also wrote off $179,016 of prepaid offering costs as a cost of capital of the initial public offering.

 

(g)

Estimated intangible assets amortization of acquired intangible assets.

 

(h)

Estimated interest from new promissory notes issued as consideration to the sellers of the Acquired Businesses.