At the end of July, we put out two press releases in the span of five days. The first laid out our path forward after the terminated helium transaction: core acquisitions, Nasdaq compliance, and portfolio cash flow. The second said we’re pursuing strategic alternatives, meaning accretive acquisitions, transformational transactions, and trimming assets that no longer earn their place.
Those releases gave the high-level outline but didn’t go into detail. This post does: the deals we’re working on, where the balance sheet stands, and why I’m optimistic about where this is heading.
The deals we’re working on
When the July 28 release said we’re back in the acquisition market with an active pipeline, that wasn’t a throwaway line.
We still hold the previously announced LOIs for additional acquisitions. There’s real movement here. On one of them, we’ve renegotiated the terms: the deal originally required $3.5 million in cash up front, and under the new structure it needs $1.3 million, a much more achievable number for where we are today, and we may be able to use our SPV to fund. This is for a business with over $1m in trailing twelve month ebitda. The others are on hold while our capitalization improves, and I’d rather hold a deal than force one on terms that don’t work.
We’re also ready to sign an LOI on a game-changing acquisition with roughly $4 million in trailing twelve-month adjusted EBITDA, and are preparing to move forward with closing documents, targeting an October 1 close. For a company our size, that’s not a bolt-on.
The best part is the structure. We’re negotiating this as a 100% seller-financed deal: the seller carries a note for the purchase price, and the note gets paid down over time.
If your reaction is “Wait, you can add $4 million of EBITDA without needing to raise the cash first?”, that’s the right reaction, and it’s why seller financing is one of the most underrated tools in acquisitions. The seller gets their price. We get the business. Shareholders get the earnings without the share issuance that would normally accompany a deal this size.
I can’t name the business until the deal is done, and I’m normally careful with timelines because deals can die at any stage. I’m giving you the October 1 target because we’re far enough along that it’s a real date, and because I’d rather you be able to hold me to it.
Importantly, this is not a helium business or a reverse merger, it’s a real acquisition in line with our core thesis.
We are also in early stage talks with two other businesses, again in line with our core thesis, where we’ll be using stock as most or all of the purchase price. Yes, that means more share issuances, but it also means positive cash flow without having to first find the funds.
Every deal in the pipeline has to pass the same filter: immediately accretive, meaning it adds more per share than it costs from the day it closes, without leaning on a projection of what the business might do in year three. Our operating performance in 2026 has not been where we want it and the parent balance sheet is tight, both of which are in our filings. In that position, a deal that should eventually work out isn’t good enough.
Working through the convertible note
Now the part fewer people ask about but that matters just as much: the balance sheet.
For the past year, the biggest weight on it has been our convertible note. I’ve written before about how it works: the holder converts portions of the note into shares over time, which is dilution existing shareholders have felt. The other side of each conversion is that debt comes off the balance sheet and stockholders’ equity goes up. The update is that a substantial portion of the note has now been converted, and we’re much closer to the end of that process than the beginning. Which brings me to Nasdaq.
Where Nasdaq compliance stands
We’ve disclosed two deficiencies. The first is stockholders’ equity, which fell below Nasdaq’s $2.5 million minimum. We submitted our plan to Nasdaq in July, and the math at the heart of it was simple: the note conversions I just described add back more equity than the size of the deficit. Based on the conversions to date, we believe the equity deficiency is more or less addressed. The formal confirmation comes later, through our filings and Nasdaq’s own process, so I’m deliberately not declaring victory here. But the direction of travel is what it needs to be.
The second is the $1 minimum bid price, which we have until December 31 to cure, and which we have a history of curing.
The goal underneath everything: cash flow positive at the parent
If you strip away the deal talk and the compliance mechanics, the company’s central objective right now is one line: get the parent company to cash flow positive.
The portfolio companies are real businesses with real customers. What I’ve said before, and what remains true, is that they aren’t yet sending enough cash up to the parent, and the parent has its own overhead. Closing that gap comes from three directions at once: lower parent overhead, portfolio cash starting to flow up again, and new acquisitions that bring earnings with them from day one.
The biggest lever here is acquisitions, which is why the latest developments are so significant and cause for optimism.
What becomes possible after that
Here’s why that sequencing matters, and why I’d ask you to think a step ahead with me.
A parent company that funds itself changes what we can do with capital. Today, nearly every dollar has a mandatory job. Once the parent is cash flow positive and the balance sheet is clean, capital allocation becomes a genuine choice between options: more acquisitions, paying down remaining obligations, or potentially buying back our own stock.
Our share count has grown a lot this year, mostly through the note conversions I described above. There’s no buyback program today and I’m not announcing one. But if we reach profitability and the share price is still around today’s suppressed levels, reducing the share count through buybacks becomes an option we’d have to weigh seriously against more acquisitions.
Right now, we’re just focusing on getting these deals over the line while working towards regaining Nasdaq compliance.
In the helium article I said I’d publish a scorecard in late October reporting progress against what I laid out, setbacks included. That hasn’t changed, and with an October 1 close target in the mix, you won’t have to wait long to see whether the optimism in this post was warranted.
If you want these updates as they happen, subscribe to The Onfolio Letter at onfolio.com/newsletter. I write it myself, and it’s where I report progress first.
Disclaimer: This post discusses Onfolio Holdings Inc. (Nasdaq: ONFO) and contains forward-looking statements about the company’s plans and expectations, including with respect to potential acquisitions, Nasdaq compliance, and capital allocation. Actual results may differ materially. Any discussion of potential future capital allocation, including share repurchases, is conceptual only; no repurchase program has been authorized. This post is provided for informational purposes only and is not an offer to sell or a solicitation to buy any securities, and is not investment advice. For complete and authoritative information, refer to our filings with the SEC at sec.gov.