10-K/A: ONAR Holding Corporation Files Amended 10-K to Correct Audit Report Typo, Reports Full Year 2024 Results

ONAR Holding Corporation files an amendment to its 2024 annual report to correct a typographical error in the audit report and provides a comprehensive overview of its financial performance for the year ended December 31, 2024.

Summary

• ONAR Holding Corporation filed an amendment to its original Form 10-K to correct a typographical error in the Audit Report.
• The amendment does not alter any other information in the original filing or reflect events after April 15, 2025.
• The company's consolidated financial statements include the accounts of ONAR Holding Corporation and its wholly-owned subsidiaries.
• For the year ended December 31, 2024, ONAR Holding Corporation reported revenue of $2,573,386 and a net loss of $3,083,156.
• The company's operating expenses totaled $1,939,636 for the year ended December 31, 2024.
• As of December 31, 2024, the company's total assets were $2,449,974 and total liabilities were $5,000,698, resulting in a stockholders' deficit of $2,550,724.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company acquired HLDCO, LLC through a reverse merger on July 25, 2024, with HLDCO being the accounting acquirer.
• The company has two reportable segments: Advertising and Marketing, and Pool Services.
• As of December 31, 2024, the company had approximately $154,000 of remaining performance obligations on its construction contracts.
• Subsequent to year-end, holders of $325,000 in notes payable exchanged their notes for common stock.

Sentiment

Score: 3

Explanation: The document presents a concerning financial picture with significant losses, a working capital deficit, and a going concern warning from the auditor. While there are some positive aspects, the overall sentiment is negative.

Positives

• The company completed a reverse merger with HLDCO, LLC, which is expected to provide synergies and an assembled workforce.
• The company is pursuing aggressive marketing and raising additional capital to improve operations and cash flows.
• Subsequent to year-end, the conversion of $325,000 of notes payable into equity is expected to improve the company's liquidity position.

Negatives

• The company incurred a net loss of $3,083,156 for the year ended December 31, 2024.
• The company has a working capital deficiency of $4,033,419 as of December 31, 2024.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company has a history of losses since inception and has not generated positive cash flows from operations.
• The company recognized a loss on extinguishment of notes payable of $363,871.
• The company recognized allowances for future credit losses totaling $0 and $504,612 for the years ended December 31, 2024 and 2023 respectively.

Risks

• The company's ability to continue as a going concern is dependent on its ability to develop additional sources of capital and/or achieve profitable operations and positive cash flows.
• There is no assurance that management will be successful in obtaining additional funding or in attaining profitable operations.
• The company's net operating loss carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code.
• The company is involved in a customer legal dispute seeking approximately $170,000, with a counterclaim filed against the company.

Future Outlook

Management plans to improve operations and cash flows through aggressive marketing and raising additional capital through sales of equity or debt securities.

Management Comments

• Management believes that aggressive marketing combined with additional financing, as necessary, will result in improved operations and cash flows in the future.
• Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets but at least annually on December 31st.

Industry Context

The company operates in the advertising and marketing industry, as well as the pool installation and maintenance industry. The acquisition of HLDCO is intended to strengthen the company's position in the marketing solutions sector.

Comparison to Industry Standards

• It is difficult to compare ONAR's results directly to industry standards without more specific information on the company's target markets and competitive landscape.
• However, the company's negative profitability and going concern uncertainty suggest it is underperforming compared to more established and financially stable peers.
• Comparable companies in the marketing and advertising space include firms like Omnicom Group, Interpublic Group, and WPP plc, which generally have stronger financial performance and greater access to capital.
• In the pool installation and maintenance industry, companies like Pool Corporation and Leslie's, Inc. are larger and more established players with greater financial resources.

Management Changes

Legal Proceedings

• VMed Services, LLC, a subsidiary of the Company, is involved in a lawsuit against Meridian Diagnostics LLC, seeking approximately $170,000 for claims related to the provision of marketing services.

Related Party Transactions

• The company recognized revenues of approximately $82,000 and $606,000 to entities which share common management during the years ended December 2024 and 2023, respectively.
• The company advanced an entity controlled by the company's CEO $400,700 during the year ended December 31, 2024.
• The company owed a related party $37,500 in the form of an advance as of December 31, 2024.
• The company has 5 notes payable due to a related party.
• During the year ended December 31, 2024, as part of a settlement agreement, the Company received publicly listed securities as payment for the balance due from an affiliated entity.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial losses and going concern uncertainty.
• Employees may be affected by potential cost-cutting measures or restructuring efforts.
• Customers may be impacted by the company's ability to provide services and fulfill contracts.
• Creditors face increased risk of non-payment due to the company's financial difficulties.

Next Steps

• The company needs to finalize the valuation of acquired intangible assets and deferred tax liabilities related to the HLDCO acquisition by July 25, 2025.
• The company must address the concerns raised by the auditor regarding its ability to continue as a going concern.
• The company needs to successfully implement its plans for aggressive marketing and raising additional capital.

Key Dates

Keywords

financial statements, reverse merger, going concern, net loss, revenue, ONAR Holding Corporation, HLDCO, audit report, Form 10-K, goodwill