Item 5. Market for Registrant’s Common Equity
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities.
Market Information
Our common stock and warrants were listed and began trading on the Nasdaq Capital Market on August 26, 2022, under the symbols “ONFO” and “ONFOW,” respectively. Prior to the listing, there was no public market for our common stock and warrants.
Holders of Common Stock
On April 11, 2023, we had approximately 78 holders of our common stock, not including persons who hold our common stock in nominee or "street name” accounts through brokers or banks.
Dividend Policy
We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to use all available funds and any future earnings for use in financing the growth of our business and to meet our series A preferred stock dividend obligations. Any future determination to pay dividends will be at the discretion of our Board and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant.
Use of Proceeds From Registered Securities
On August 25, 2022, the SEC declared effective our registration statement on Form S-1 (File No. 333-264191) under the Securities Act of 1933, as amended, filed in connection with our Initial Public Offering (“IPO”). Pursuant to the registration statement, we registered the offering and sale of: (i) 2,753,750 shares of common stock and warrants to purchase 5,507,500 shares of common stock, at a combined public offering price of $5.00; and (ii) an additional 413,063 shares of Common Stock and additional warrants to purchase 826,126 shares of common stock, at a combined public offering price of $5.00, pursuant to an over-allotment option granted to the underwriters in our IPO. Each warrant is exercisable for one share of common stock at an exercise price of $5.00 per share. EF Hutton, division of Benchmark Investments, LLC, acted as sole book-running manager for our IPO.
On August 30, 2023, we completed our IPO selling 2,753,750 shares of common stock and warrants to purchase 5,507,500 shares of common stock at a combined public offering price of $5.00, for aggregate gross proceeds of approximately $13.7 million, prior to deducting underwriting discounts, commissions, and other offering expenses and excluding any exercise of the underwriters’ option to purchase any additional securities. On August 29, 2022, EF Hutton partially exercised the over-allotment option and purchased 609,750 additional warrants at the purchase price of $.01 per warrant for aggregate gross proceeds of approximately $6 thousand prior to deducting underwriting discounts, commissions, and other offering expenses.
Total gross proceeds to us from our IPO, including the over-allotment option, were approximately $13.7 million, prior to deducting underwriting discounts, commissions, and other offering expenses. The offering has terminated.
From the effective date of our registration statement on Form S-1 (File No. 333-264191 ), the Company has incurred underwriting discounts, commissions, and other offering expenses in connection with the IPO totaling approximately $1.5 million, resulting in net offering proceeds from the IPO to us of approximately $12.2 million. No payments for such expenses were made directly or indirectly to: (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
We have used the net proceeds of our IPO to pay: (i) approximately $1.35 million to purchase the assets of a WordPress websites business; (ii) approximately $0.95 million to purchase 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; (iii) approximately $2.1 million, to purchase an online Proofreading business; (v) approximately $.85 million to purchase the assets of a copywriting content writing, website link building social media marketing and virtual assistant services business; and (vi) approximately $2.15 million for general corporate purposes, including working capital, business development, and sales and marketing activities.
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As of March 31, 2023, we had not yet used approximately $4.8 million of the proceeds of the IPO. None of the proceeds of the IPO have been used to make any direct or indirect payments to any of our directors or officers, any of their associates, any persons owning ten percent or more of any class of our equity securities, or any of our affiliates, or any others.
There has not been, and we do not expect, any material change in the planned use of proceeds from the IPO as described in the prospectus filed as part of our registration statement on Form S-1 (File No. 333-264191 ).
Purchases of Equity Securities
No repurchases of our common shares were made during the fourth quarter of 2021.
Securities Authorized for Issuance under Equity Compensation Plans
Equity Compensation Plans as of December 31, 2022.
Equity Compensation Plan Information
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
Weighted-average exercise
price of outstanding options,
warrants and rights
Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected in
column (a))
Plan category
(a)
(b)
(c)
Equity compensation plans approved by security holders (1)
59,850
8.40
2,540,150
Equity compensation plans not approved by security holders (2)
82,613
5.50
0
Total
142,463
6.72
2,540,150
1.
Reflects shares of common stock to be issued pursuant to our 2020 Equity Incentive for the benefit of our directors, officers, employees and consultants. We have reserved 2,600,000 shares of common stock for such persons pursuant to our 2020 Equity Incentive Plan.
2.
Represents warrants to purchase 82,613 shares of common stock issued to the underwriter in our IPO. The warrants have an exercise price of $5.50, are exercisable beginning on February 22, 2023 and expire on August 25, 2027.
Recent Sales of Unregistered Securities
During the period covered by this report, our Company has sold the following securities without registering the securities under the Securities Act:
Date
Security
Jan.-March 2022
Stock options — 49,560 non-qualified stock options with an exercise price of $5.95 per share.
June 3, 2022
Stock Options — 23,100 non-qualified stock options with an exercise price of $14.29 per share.
March 2022
Common Stock — 2,800 shares of common stock, valued at $5.95 per share, for board of director services.
October 2022
Warrant – Warrant to purchase 20,000 shares of Common Stock at $4.75 per share pursuant to Asset Sale and Purchase Agreement
Jan – July 2022
Series A Preferred Stock – 12,860 shares at $25 per share for aggregate proceeds of $321,500
Additionally, our Company recognized $20,000 of stock-based compensation expense related to share-based payment awards for directors that were not yet issued for services during the three months ended September 30, 2022. The shares are awarded to directors immediately pursuant to the Company’s 2022 Non-Employee Director Compensation Policy whereby, in addition to other compensation, our Company issues $5,000 worth of shares per director at the end of each quarter.
No underwriters were utilized, and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees in connection with these transactions. We relied upon exemptions from registration under Section 4(a)(2) of the Securities Act and/or (i) Rule 506 of Regulation D promulgated thereunder; (ii) Regulation S promulgated thereunder, or (iii) Rule 701 promulgated thereunder since these transactions did not involve any public offering.
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Purchases of Equity Securities by the Issuer or Affiliated Purchasers
None.
Item 6. RESERVED.