Kindcard, Inc. (KCRD)
Kindcard, Inc. (OTC: KCRD) is a Nevada-based fintech/paytech operator with two SaaS “closed-loop” solutions: Pay with Deb (a mobile wallet using 1:1 backed “Deb Tokens”) and Tendercard (gift card/loyalty platform). For fiscal 2025 (ending Jan. 31), the company posted revenues of $410,869 (down 15...
Deep Dive: Kindcard, Inc. (KCRD) 10-K Annual Report Review
Kindcard, Inc. (OTC: KCRD), a Nevada‐based fintech and paytech company, released its annual 10-K for the fiscal year ended January 31, 2025. In this in-depth review, we unpack the most important highlights, financial results, risk factors, and growth prospects—and assign an overall investment score from 1 to 10.
Warren.AI 💰 3.2 / 10
1. Company Overview (Item 1)
Business Model
Kindcard operates through two wholly‐owned subsidiaries:
• Deb, Inc. (“Pay with Deb”)
• Closed-loop mobile wallet allowing users to buy “Deb Tokens” 1:1 backed by USD in a custodial account.
• Targets high-risk and e-commerce merchants worldwide with competitive, fee-free settlement.
• Tendercard, Inc. (Gift & Loyalty Platform)
• SaaS‐based gift card and loyalty solution for small-to-mid-sized merchants.
• Electronic records, merchant controls funds directly, integration via Bridgepay, PAX, Dejavoo.
History & Recent Developments
• Founded as MWF Global Inc. in 2016; pivot to fintech in 2021 after acquiring the Tendercard division.
• Launched Pay with Deb consumer app (Apple/Google approved, live for beta testing).
• Server upgrades for 99.9% uptime and new reseller agreement with Restaurant Heroes for Tendercard.
Market Position
• Positioned as an “alternative payments” platform amid rising merchant fees, underbanked markets, and mobile wallet adoption.
• Competes indirectly with Visa/Mastercard rails, PayPal, Apple/Google Pay—but differentiates via closed-loop, privacy, and no interchange fees.
2. Financial Performance (Items 7, 8 & 7A)
2.1 Revenue & Profitability
| Fiscal Year | Revenue | Cost of Sales | Operating Loss | Net Loss | Earnings Per Share |
|---|---|---|---|---|---|
| 2025 | $410,869 | $97,278 | $(250,791) | $(252,221) | $(0.00) |
| 2024 | $486,843 | $96,962 | $(260,027) | $(261,372) | $(0.00) |
• Revenues declined 15.6% YoY, driven by a drop in commission (cash pickup) income and Tendercard subscriptions.
• Cost of Sales was flat; gross margin compressed from 80% to 76%.
• Operating Expenses fell 13% to $564k as R&D and launch costs for Pay with Deb tapered.
• Net Loss: $(252k) vs. $(261k) last year.
2.2 Cash Flow & Liquidity
• Cash at year-end: $9,089 (down slightly).
• Operating Cash Burn: $(122k) in 2025 vs. $(65k) in 2024.
• Investing: $(15k) of R&D capex on Deb platform.
• Financing: $137k raised via related-party and short-term loans.
Balance Sheet
• Total Assets: $86k
• Total Liabilities: $1.13 million
• Stockholders’ Deficit: $(1.05 million)
• Working Capital Deficit: $(929k)
2.3 Intangible Assets & Amortization
• Capitalized R&D (“Pay with Deb”): $239k (net $39k after amortization).
• Tendercard Intangibles (brand, tech, customer lists): $21k net.
• Amortization expense: $80k.
3. Risk Factors (Item 1A)
- Going Concern: Auditor cites “substantial doubt” over 12-month horizon due to recurring losses, negative working capital.
- Liquidity Risk: Cash on hand covers only a few weeks of operations; heavy reliance on related-party loans.
- Regulatory: Deb’s wallet system is subject to MSB/BSA/AML compliance; any shortfall could halt operations.
- Technology & Competition: Well-funded incumbents (Visa, PayPal, Apple) have economies of scale.
- Concentration Risk: No Nasdaq listing; OTC markets trading with minimal liquidity (market cap ~$0.28 million).
4. Management & Governance
• CEO & Sole Director: Michael Rosen (57)—seasoned payments entrepreneur, founder of Ambient Healthcare and Safeway Distributors.
• No Independent Directors—board of one; Audit & Governance functions performed by the sole director.
• Related-Party Debt: RMR Management (CEO’s vehicle) holds $387k–$400k of convertible and secured notes.
Internal Control Weaknesses
• Lack of segregation of duties—two employees, heavy reliance on consultants.
• No Audit Committee or financial reporting oversight apart from CEO/CFO.
5. Analysis & Outlook
Growth Strategy
• Leverage reseller networks (MSPs, ISVs) for Deb platform rollout to high-risk merchants.
• Expand Tendercard gift/loyalty during holiday season with renewed reseller push.
• Strategic Blockchain/Web3 partner (Blox Global) could add cross-border P2P/B2B rails.
Challenges Ahead
• Must secure $500k–$1 million in equity or grant financing to remain a going concern & fund growth.
• Need stronger governance, an independent board member, and increased trading liquidity.
• Feature–function parity vs. mature players (Apple Pay, PayPal) will require accelerated R&D.
Valuation & Capital Structure
• 98.17 million shares outstanding; no Nasdaq listing limits institutional interest.
• Pending convertible notes: 1% note (9.5 million shares at $0.01 conversion) and other short-term notes.
6. Investment Score: 3.2 / 10
On a 1–10 scale, we assign Kindcard a 3.2.
Key Drivers
– Pro: Innovative closed-loop wallet, no transaction fees, high-risk focus.
– Con: Unprofitable, negative cash flow, going-concern risk, minimal liquidity.
Suitability
• Speculative: High risk/high reward.
• Time Horizon: 12–24 months to prove traction and secure funding.
7. Conclusion
Kindcard, Inc. shows promise as a fintech disruptor with its closed-loop Pay with Deb wallet and nimble gift/loyalty platform. However, the small scale, persistent losses, and near-term cash crunch raise serious red flags. Prospective investors should treat KCRD as a high-volatility, speculative stake—only suitable for those comfortable with microcap OTC risk and willing to monitor closely for funding events and user adoption milestones.
Net Loss (FY 2025): $(252,221)
Net Loss (FY 2024): $(261,372)
Disclosure: This analysis is for informational purposes only. It is not a recommendation to buy or sell any security.