10-K: Kindcard, Inc. Reports Annual Results for Fiscal Year Ended January 31, 2025, Citing Ongoing Efforts to Disrupt Payments Industry

Kindcard, Inc.'s 10-K filing reveals a year of ongoing development and strategic partnerships aimed at disrupting the payments industry with its Pay with Deb and Tendercard platforms, despite facing a net loss and substantial doubt about its ability to continue as a going concern.

Summary

• Kindcard, Inc., a FinTech and PayTech company, filed its annual report on Form 10-K for the fiscal year ended January 31, 2025.
• The company focuses on providing alternative closed-loop payment solutions through its subsidiaries, Deb, Inc. and Tendercard, Inc.
• Deb, Inc.'s Pay with Deb app, designed for high-risk merchants, has been approved by Apple and Google stores and is undergoing beta testing.
• Tendercard, Inc. is upgrading its servers and has partnered with Restaurant Heroes to market its gift card and loyalty platform.
• The company believes the payments industry is ripe for disruption due to the rise of e-commerce and underbanked businesses.
• Total revenues for the year ended January 31, 2025, were $410,869, compared to $486,843 for the previous year.
• The company reported a net loss of $252,221 for the year ended January 31, 2025, compared to a net loss of $261,372 for the year ended January 31, 2024.
• As of January 31, 2025, the company had a cash balance of $9,089 and an accumulated deficit of $1,422,134.
• The auditor's report expresses substantial doubt about the company's ability to continue as a going concern.
• The company plans to fund its operations through private placements and advances from related parties.

Sentiment

Score: 3

Explanation: The document presents a mixed picture. While there are positive developments like the launch of the Pay With Deb app and partnerships for Tendercard, the financial results are concerning, with a net loss, declining revenues, and a going concern warning from the auditor. This suggests a cautious outlook.

Positives

• The Pay With Deb consumer app was recently approved by the Apple and Google stores and is now live.
• Tendercard, Inc. has entered into an agreement with The Restaurant Heroes Franchisor Group to market its gift and loyalty platform.
• The company is focusing on building a nationwide closed-loop platform that can be securely used in multiple environments and across all merchant type classifications.

Negatives

• The company reported a net loss of $252,221 for the year ended January 31, 2025.
• The auditor's report expresses substantial doubt about the company's ability to continue as a going concern.
• As of January 31, 2025, the company had a cash balance of $9,089 and an accumulated deficit of $1,422,134.
• Total revenues decreased from $486,843 in 2024 to $410,869 in 2025.

Risks

• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company's cash balance is not sufficient to fund its levels of operations for the next twelve months.
• The company is dependent on raising capital to fund its business plan and attain profitable operations.
• The company faces competition from major players in the payments industry.
• The company owns no patents, creating a risk that it will not be able to adequately protect its intellectual property rights.

Future Outlook

The company intends to offer its Pay With Deb and Tendercard suite of alternative payment platforms to in-store and online merchants through a selected group of resellers worldwide and believes that its alternative payment platforms will be well received by resellers in the payments industry.

Management Comments

• Management believes that traditional banking is antiquated, unable, and/or unwilling to work with the inherent risk that comes with any innovative company seeking new ways to pay for goods and services.
• Management believes that both the merchant and its consumers are open to new payment technologies that allow for ease of in person and online purchases worldwide in a secure environment and high level of trust with its launch of Pay with Deb and relaunch of its Tendercard gift card closed loop payment technologies.

Industry Context

The company is positioning itself to disrupt the payments industry, which is dominated by major players like Visa, MasterCard, Discover, and American Express, by offering alternative closed-loop payment solutions.

Comparison to Industry Standards

• The payments industry is dominated by major players like Visa, MasterCard, Discover, and American Express, which set interchange fees for credit/debit card acceptance worldwide.
• In recent years, there has been significant consolidation of the processing industry, decreasing competitiveness and leaving merchants with fewer options for payments acceptance.
• Kindcard is attempting to compete with payment platforms for specific industries like Alipay, Paypal, Apple Pay, and Google Pay.

Related Party Transactions

• During the year ended January 31, 2025, our CEO, Michael Rosen, paid Company expenses in the aggregate amount $90,037 on behalf of the Company.
• On September 15, 2023, the Company issued a 1% Convertible Promissory Note in the amount of $296,497.87 to RMR Management Group LLC in exchange for full and final settlement of an aggregate amount of $296,497.87 previously loaned by RMR to the Company.
• On May 1, 2024, the Company issued a Promissory Note in the amount of $24,669 to RMR in exchange for expenses paid and funds previously loaned to the company.
• On May 17, 2024, the Company issued a 6% Promissory Note in the amount of $75,000 to RMR Management Group LLC in consideration for a $75,000 loan from RMR to the Company.

Stakeholder Impact

• Shareholders face the risk of dilution if the company issues additional equity to raise capital.
• Employees' job security is uncertain due to the company's financial difficulties and going concern warning.
• Customers may be affected if the company is unable to continue providing its services.
• Suppliers and creditors face the risk of non-payment if the company's financial situation does not improve.

Next Steps

• Deb, Inc. and Tendercard, Inc. expect to complete additional upgrades to their respective platforms by the end of Q2 2025.
• Deb, Inc. will focus on online and in-store merchants looking for an alternative payments platform.
• Tendercard, Inc. will focus on merchants seeking to integrate a simple and cost-effective Gift and Loyalty platform in time for the 2025 holiday season.

Key Dates

Keywords

payments, fintech, paytech, kindcard, tendercard, deb, closed-loop, mobile wallet, gift card, loyalty platform