WILMINGTON, Del. - Onfolio Holdings Inc. (NASDAQ: ONFO, ONFOW), a company specializing in the acquisition and management of online businesses, has announced its asset purchase agreement to acquire a majority interest in the assets of Eastern Standard LLC, a provider of digital marketing services. The transaction is expected to close on October 1, 2024, subject to customary closing conditions.
Eastern Standard, based in Philadelphia, offers integrated branding and digital customer experiences. Its client list has featured names such as Neil deGrasse Tyson and Cornell Law. For the fiscal year that ended on December 31, 2023, the company reported approximately $4 million in revenue and $630,000 in unaudited adjusted EBITDA.
Onfolio's CEO, Dominic Wells, stated that Eastern Standard is an "excellent business" that aligns with Onfolio's strategy to enhance its portfolio and expand client services. According to Wells, the acquisition will be completed without upfront cash or the issuance of common shares by Onfolio Holdings. The purchase price for a 90% ownership stake in Eastern Standard is $2.16 million.
The funding for the acquisition involves a special purpose vehicle program, which has been raising capital in a manner that is not dilutive to Onfolio shareholders. Specifically, $500,000 will be invested for a 20% ownership stake, while Onfolio will obtain a 70% stake through $410,000 of Series A Preferred Shares and two secured promissory notes totaling $1.25 million. The Series A Preferred Shares and promissory notes will pay dividends and interest but are not convertible into common shares.
This move follows a similar acquisition structure to the previous DDS Rank deal, with Wells highlighting the non-dilutive funding program's role in supporting such transactions. The CEO expressed confidence that these strategic acquisitions will aid Onfolio in its pursuit of profitability.
Eastern Standard has been operating since 2014, employing a data-first approach to blend strategy, creativity, and technology for brand and digital transformations. Onfolio Holdings, on the other hand, focuses on acquiring businesses that demonstrate stable cash flows and face minimal risks of obsolescence, aiming to optimize and add value to these entities.
The information regarding this acquisition is based on a press release statement provided by Onfolio Holdings Inc.
In other recent news, Onfolio Holdings Inc. has been actively making strategic decisions and acquisitions. During their Annual Meeting, shareholders approved a reverse stock split, with an exchange ratio ranging from 1-for-2 to 1-for-5. The reverse stock split aims to increase the per-share trading price of Onfolio Holdings' common stock, with the specific ratio and timing to be determined by the board of directors.
In addition, the company recently acquired a majority stake in DDS Rank, a digital marketing service provider for dentists, for $600,000. The acquisition is expected to double DDS Rank's revenue and EBITDA within the next two fiscal quarters. Onfolio Holdings also announced the acquisition of the business assets of First Page Strategy through its subsidiary, RevenueZen LLC, which is expected to result in significant cost savings and additional revenue.
The recent developments also saw the re-election of directors and the ratification of Astra Audit & Advisory, LLC as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024. These decisions and acquisitions are part of Onfolio Holdings' recent strategic moves.
InvestingPro Insights
Onfolio Holdings Inc.'s (NASDAQ: ONFO) strategic move to acquire Eastern Standard aligns with the company's growth trajectory, as indicated by the positive sales outlook from analysts. InvestingPro Tips suggest that analysts anticipate sales growth in the current year for Onfolio, which could be bolstered by the integration of Eastern Standard's digital marketing services into Onfolio's portfolio.
Examining InvestingPro Data, Onfolio's market capitalization stands at a modest $5.23 million. While the company's P/E ratio is currently negative at -1.41, reflecting its lack of profitability over the last twelve months, the revenue growth has been robust, with a 42.39% increase in the last twelve months as of Q2 2024. This suggests that Onfolio is expanding its top-line. Furthermore, the company's gross profit margin is healthy at 62.19%, indicating a strong ability to convert revenue into gross profit.
Despite the absence of dividends for shareholders, the company's stock has experienced a substantial price uptick of 121.26% over the last six months, with analysts predicting the company will turn profitable this year. This could be an attractive point for potential investors looking for growth opportunities. For those interested in more in-depth analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/ONFO.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.