Kindcard, Inc 10-K for FY2022
Kindcard, Inc. (KCRD)
About this 10-K
Kindcard, Inc filed this 10-K on May 17, 2022, covering the fiscal year ended January 31, 2022 (FY2022).
Headline figures
Fiscal year ended January 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $368.53K
- up 594300.0% from $62 a year earlier
- Net loss
- $397.12K
- compared with a net loss of $32.25K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the fiscal year ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transaction period from ____ to ____
Commission File No.
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices, Zip Code)
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(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Class | Trading Name of each exchange on which registered | Symbols |
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Securities registered pursuant to section 12(g) of the Act:
(Title of each class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes ☒
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | ☐ | |
Accelerated filer | ☐ | Smaller reporting company | |
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| Emerging growth company. |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. N/A
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of May 16, 2022, the Company has
KINDCARD, INC.
TABLE OF CONTENTS
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Use of Certain Defined Terms
Except as otherwise indicated by the context, references in this report to “MWF Global Inc..”, Kindcard, Inc. “we,” “us,” “our,” “our Company,”
Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
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PART I
ITEM 1. BUSINESS
Business Overview
Corporate History
Formerly MWF Global Inc. (now known as Kindcard, Inc. the “Company”) was incorporated in the State of Nevada as a for-profit company on November 18, 2016, and established a fiscal year end of January 31. The Company was organized to sell unique country specific handcrafted natural products with a focus on sourcing these products from South-East Asia and offering these products for sale through the Company’s web site and to establish other distribution channels.
On June 1, 2021 Michael Rosen purchased the majority shares of MWF Global Inc. for the purchase price of $150,000. On June 2, 2021 54,000,000 shares of common stock were issued to RMR Management, LLC, sole owner Michael Rosen at a value of $0.003 per share ($150,0000).
On June 7, 2021, the Company (“Buyer”) entered into a Stock Purchase Agreement with KindCard, Inc., a Massachusetts corporation (“KindCard”) and Croesus Holdings Corp, a Massachusetts corporation (jointly hereinafter, “Seller”).
The June 7, 2021 Stock Purchase Agreement included the acquisition of the Tendercard Division of Croesus Holdings Corp. and a subsidiary of Kindcard, Inc. Tendercard, Inc. incorporated in the State of Nevada as a for-profit company on August 26, 2021. The Company’s principal business activity is providing proprietary stored value programs to small and mid-sized entities, chain stores and other multi-location environments via its host-capture processing system.
On June 16, 2021, Michael Rosen was appointed as a Director of the Company. On June 30, 2021, concurrent with William D Mejia’s resignation as Director, President, Secretary, Treasure of the Company, Mr. Michael Rosen was appointed the President, Secretary and Treasurer of the Company.
On September 16, 2021, the Company announced that the Stock Purchase Agreement, dated June 7, 2021 closed on August 16, 2021. The Company issued 8,000,000 shares of common stock. Subsequent to this closing, KindCard failed to deliver its registered trademark and failed to deliver the software that conforms to industry standards. A settlement has been negotiated and is being finalized at the time of filing this Form 10-K.
Recent Developments
Capital Stock
The Company’s capitalization consists of 200,000,000 authorized common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.
Industry Analysis/Competition
Market Analysis
The Company is well positioned with the build out of its innovative payment technology and believes with the domination of ecommerce, decriminalization of certain products, not to mention launch of very innovative platforms like web3 and blockchain the payments industry is ripe for disruption because the sheer numbers of new, underbanked businesses are exploding. Management believes that traditional banking is antiquated, unable, unwilling to work with the inherent risk that comes with any innovative company pushing the boundaries of a new way to pay for goods and services. The everyday merchant is tired of high fees, friendly fraud, cryptic algorithms, reserves, chargebacks and lack of trust with current institutions while the consumer is levied service charges and fees for mediocre service. Management believes that both the merchant and its consumers are very open to new payment technologies that allow for ease of in person and online purchases in a very 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.
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Competition
The payments industry is exploding with new technology mainly focused on the launch of new payment card types and singular payment platforms for specific industries like Alipay, Paypal, Apple Pay, Goggle Pay and others. The Company has focused its efforts on the build out of a nationwide closed loop platform that can be securely used in multiple environments and across all merchant type classifications. It is designed to be safer for business and consumers to transact with an alternative to cash, credit cards and checks.
Patent and Trademarks
We do not currently own any domestic or foreign patents relating to our proposed handcrafted products.
Employees
As of January 31, 2022, the Company hired certain employees of Tendercard, Inc.
ITEM 1A. RISK FACTORS
As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
ITEM 2. PROPERTIES
The Company does not own any real estate or other properties and has not entered into any long-term lease or rental agreements for property.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or stockholder is a party adverse to the Company or has a material interest adverse to the Company.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is not quoted on any trading platform and therefore no data is available for the periods ended January 31, 2022 and 2021.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Business Overview
Concurrent with the acquisition of the Tendercard Division of Croesus Holdings Corp., (“Tendercard”), the Company intends to abandon the business of MWF Global Inc. who focused on the selling of unique handcrafted natural products with a focus on products manufactured in Southeast Asia via our proposed on-line store and focus on the business of Tendercard.
There is the likelihood that we may never be able to market our unique hand-crafted products beginning with the Caraboa belts and that the Company would need to successfully in its marketing efforts to complete its plan of operation and develop and implement the Company’s on-line retail website. If our Company is not capable of building a market for its proposed product, all funds that we spend on development will be lost.
Kindcard, Inc. (www.kindcard.com) has entered into a definitive license technology agreement to build from ground up a unique payment’s platform designed to provide a safer more secure way for business and consumers to transact financially as an alternative to cash, credit cards and checks. The platform called “Pay With Deb” will allow consumers to download the “Deb” Purse from the Apple and Google Store allowing it to be used for payment in-person or online wherever “Pay With Deb” is accepted. “Pay With Deb” will add a unique way for both low and high-risk merchants to accept payments. The Company is currently in the process of building out its internal corporate executive staff and support team. The Company expects to be in merchant/consumer beta test in-store and online in June and July with a planned nationwide roll out in August.
In addition, Tendercard Inc., now a wholly owned subsidiary of Kindcard, Inc., has also undergone a technology revamp, allowing its current 1000 plus merchants to upgrade their acceptance of gift cards at the point-of-sale through its new certification and ability to easily be boarded on the latest point-of-sale in-store terminals. Tendercard has been in business with its proprietary Gift Card platform for over 15 years allowing merchants to have be able to have one source for their Gift Card needs from card design, printing to loading and use at point-of-sale. With this revamp the company believes it can regain a significant number of clients, numbering at one point over 10000, who moved away from the company because of its inability to certify to the many of new merchant terminals that entered the payments industry. The Company (www.tendercard.net) will be relaunching its new company website along with its new and improved Gift Card offering to the Retail and Hospitality marketplace in the month of July along with an aggressive direct marketing plan to past and new merchants.
Plan of Operations
Our cash balance was $21,131 as of January 31, 2022 and $44 as of January 31, 2021. We believe our cash balance is not sufficient to fund our levels of operations for the next twelve months. We have been utilizing and may utilize funds from our President and Chief Executive Officer, Chairman of the Board of Directors, and majority holder of our common stock, who has informally agreed to advance funds to allow us to pay for offering costs, filing fees, and professional fees. Mr. Rosen, however, has no formal commitment, arrangement or legal obligation to advance or loan funds to the company. In order to develop and begin to implement our business plan, we will need the funding from this offering. We have generated minimal revenues to date.
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Going Concern
To date the Company has generated revenues from its business operations but has incurred operating losses of $397,118. At January 31, 2022, the Company has a working capital deficit of $470,037. The Company will require additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern from a period of one year from the issuance of these financial statements. The Company intends to continue to fund its business by way of private placements and advances from related parties as may be required. As of January 31, 2022 the Company has issued 83,825,000 shares of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.
Results of Operations
Fiscal Year Ended January 31, 2022 compared to the Fiscal Year Ended January 31, 2021
We earned $368,528 in revenues for the year ended January 31, 2022 as compared to $62 in revenues for the year ended January 31, 2021.
Expenses for the year ended January 31, 2022 totaled $626,782. General and administrative expenses were $626,782 consisting primarily of Advertising and marketing expense of $47,464, Communications expense of $27,233, Employee benefits of $21,193, Legal expense of $37,118, Office general and administrative expenses of $15,434, professional fees of $69,310, Salaries and wages of $290,790 and Taxes of $26,968 resulting in a net loss of $286,827. General and administrative expenses for the year ended January 31, 2021 totaled $32,312, consisting primarily of Advertising and marketing expense of $Nil, Communications expense of $Nil, Employee benefits of $Nil, Legal expense of $Nil, Office general and administrative expenses of $14,192, professional fees of $18,120, Salaries and wages of $Nil and Taxes of $Nil resulting in a net loss of $32,250. The increase in expenses between fiscal 2022 and fiscal 2021 was primarily due to the increase in operating activities of Tendercard, Inc.
Capital Resources and Liquidity
Our auditor’s report on our January 31, 2022 financial statements expresses an opinion that substantial doubt exists as to whether we can continue as an ongoing business. Since our sole director maybe unwilling or unable to loan or advance us additional capital, we believe that if we do not raise additional capital over the next 12 months, we may be required to suspend or cease the implementation of our business plans. See “January 31, 2022 Audited Financial Statements – Auditors Report.”
As of January 31, 2022, we had $21,131 of cash compared to $44 of cash as of January 31, 2021. We anticipate that our current cash and cash equivalents and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date the Company has incurred operating losses since inception of $470,037. As at January 31, 2022, the Company had a working capital deficit of $470,037.
The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.
We expect to incur marketing and professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
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If we cannot raise additional funds, we will have to cease business operations. As a result, investors in the Company’s common stock would lose all of their investment.
Off Balance Sheet Arrangements
There are no off-balance sheet arrangements currently contemplated by management or in place that are reasonably likely to have a current or future effect on the business, financial condition, changes in financial condition, revenue or expenses, result of operations, liquidity, capital expenditures and/or capital resources.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Kindcard, Inc.
Consolidated Financial Statements
January 31, 2022 and 2021
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Kindcard, Inc.
Consolidated Financial Statements
Year Ended January 31, 2022 and 2021
Table of Contents
Report of Independent Registered Public Accounting Firm |
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Report of Independent Registered Public Accounting Firm Assurance Dimensions (Firm D:5036)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of KindCard Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of KindCard Inc. (the Company) as of January 31, 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended January 31, 2022, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2022 and the results of its operations and its cash flows for the year ended January 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company had a working capital and stockholders’ deficit of $470,037 at January 31, 2022. The Company had a net loss of $397,118 and had net cash used in operating activities of $110,225 for the year ended January 31, 2022. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.
ASSURANCE DIMENSIONS CERTIFIED PUBLIC ACCOUNTANTS & ASSOCIATES
also d/b/a McNAMARA and ASSOCIATES, PLLC
TAMPA BAY: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053
JACKSONVILLE: 4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053
ORLANDO: 1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053
SOUTH FLORIDA: 2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053
www.assurancedimensions.com
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Critical Audit Matters
The critical audit matters to be communicated, are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Business Acquisition and impairment of goodwill.
Description of the Matter
In June 2021, the Company (“Buyer”) entered into a Stock Purchase Agreement (“the Acquisition”) and acquired 100% of Kindcard, Inc., a Massachusetts corporation (“KindCard”) and the Tendercard Division of Croesus Holdings Corp, a Massachusetts corporation, which was considered a combined business acquisition. Consideration for the acquisition consisted of 8 million shares valued at $24,000 and assumed liabilities of approximately $157,000. The Company recorded goodwill of approximately $110,000 and intangible assets of approximately $21,000 as a result of this acquisition. The fair values recorded were based on an independent valuation obtained by the Company. Subsequent to the acquisition, KindCard failed to deliver its registered trademark and failed to deliver the software that conforms to industry standards and as a result the Company recorded impairment of the goodwill.
Auditing the Company’s (i) valuation of identifiable intangible assets and goodwill and (ii) annual impairment test related to these intangible assets was complex due to the (i) the subjective factors used in the valuation and (ii) the estimation uncertainty in determining their fair values. The significant assumptions used to estimate the intangible assets and goodwill on acquisition in addition to the potential impairment included forecasted sales and discount rates. These assumptions are forward-looking which can vary significantly and depend on market forces and events outside of the Company’s control.
How We Addressed the Matter in Our Audit
To test the estimated fair value of these intangible assets, our audit procedures included, among others, evaluating the valuation methodology used, the significant assumptions discussed above, and the underlying data used by the Company. Such data includes historical sales and projections. We reviewed the assumptions and data provided by management and concluded that the intangible assets and goodwill and subsequent impairment recorded was reasonable.
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ASSURANCE DIMENSIONSCERTIFIED PUBLIC ACCOUNTANTS & ASSOCIATES
also d/b/a McNAMARA and ASSOCIATES, PLLC
TAMPA BAY: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053
JACKSONVILLE: 4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053
ORLANDO: 1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053
SOUTH FLORIDA: 2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053
www.assurancedimensions.com
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Reports of Independent Registered Public Accounting Firm Sadler Gibb
To the Board of Directors and Shareholders of MWF Global Inc.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of MWF Global Inc. (“the Company”) as of January 31, 2021, the related statements of operations, stockholders’ deficit, and cash flows for the year ended January 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2021, and the results of its operations and its cash flows for the year ended January 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Sadler, Gibb & Associates, LLC
We have served as the Company’s auditor since 2017 through December 20, 2021.
Draper, UT
April 30, 2021
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Kindcard, Inc.
Consolidated Financial Statements
at January 31, 2022 and 2021
Kindcard, Inc.
Consolidated Balance Sheets
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Accounts Payable |
| $ |
|
| $ |
| ||
Accrued Payroll Expenses |
|
|
|
|
|
| ||
Due to related party |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
|
|
|
| ||
Long-term Liabilities |
|
|
|
|
|
|
|
|
SBA Loan |
|
|
|
|
|
| ||
Total Long-term Liabilities |
|
|
|
|
|
| ||
Total Liabilities |
|
|
|
|
|
| ||
Commitments and Contingencies - See Note 10 |
|
|
|
|
|
| ||
Stockholders' Deficit |
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
| ||
Authorized |
|
|
|
|
|
|
|
|
Additional Paid In Capital |
|
| ( | ) |
|
| ( | ) |
Accumulated Deficit |
|
| ( | ) |
|
| ( | ) |
Total Stockholders' Deficit |
|
| ( | ) |
|
| ( | ) |
Total Liabilities and Stockholders' Deficit |
| $ |
|
| $ |
| ||
See Notes to Consolidated Financial Statements
| F-4 |
| Table of Contents |
Kindcard, Inc.
Consolidated Statements of Operations
|
| For the Years Ended |
| |||||
|
| January 31, 2022 |
|
| January 31, 2021 |
| ||
Revenue |
| $ |
|
| $ |
| ||
Total Revenue |
|
|
|
|
|
| ||
Cost of Sales |
|
| ( | ) |
|
|
| |
Total Cost of Sales |
|
| ( | ) |
|
|
| |
Gross Profit |
|
|
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|
|
| ||
Operating Expenses |
|
|
|
|
|
|
|
|
General & Administrative Expenses |
|
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|
|
| ||
Impairment Expense |
|
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|
|
|
| ||
Total Operating Expenses |
|
|
|
|
|
| ||
Net Loss from Operations |
|
| ( | ) |
|
| ( | ) |
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Net Loss Per Common Share – Basic and Diluted |
| $ | ( | ) |
| $ | ( | ) |
Weighted Average Number of Common Shares Outstanding – Basic and Diluted |
|
|
|
|
|
| ||
See Notes to Consolidated Financial Statements
| F-5 |
| Table of Contents |
Kindcard, Inc.
Consolidated Statements of Stockholders' Deficit
For the years ended January 31, 2022 and 2021
|
| Common Stock |
|
| Additional |
|
|
|
|
|
|
| ||||||||
|
| Number of Shares |
|
| Amount |
|
| Paid-in Capital |
|
| Accumulated Deficit |
|
| Total |
| |||||
Balance, January 31, 2020 |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||
Net loss for year ended January 31, 2021 |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance at January 31, 2021 |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||
Shares issued for acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss for year ended January 31, 2022 |
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance, January 31, 2022 |
|
|
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||
See Notes to Consolidated Financial Statements
| F-6 |
| Table of Contents |
Kindcard, Inc.
Consolidated Statements of Cash Flows
|
| For the Years Ended |
| |||||
|
| January 31, |
|
| January 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
Cash Flows from Operating Activities: |
|
|
|
|
|
| ||
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net Cash used by operations |
|
|
|
|
|
|
|
|
Expenses paid by related party |
|
|
|
|
|
| ||
Depreciation and amortization |
|
|
|
|
|
| ||
Impairment Expense |
|
|
|
|
| |
| |
Decrease (increase) in operating assets/liabilities |
|
|
|
|
|
|
|
|
Accounts Receivable |
|
| ( | ) |
|
|
| |
Accounts payables |
|
|
|
|
| ( | ) | |
Accrued expenses |
|
|
|
|
|
| ||
Total Adjustments to reconcile Net Income to Net Cash used in operations |
|
|
|
|
| ( | ) | |
Net cash used by operating activities |
| $ | ( | ) |
| $ | ( | ) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchase of PP&E |
| $ | ( | ) |
| $ |
| |
Purchase of software |
|
| ( | ) |
|
|
| |
Cash acquired from acquisition |
|
|
|
|
|
| ||
Net cash used by investing activities |
| $ | ( | ) |
| $ |
| |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from related party loan |
|
|
|
|
|
| ||
Net cash provided by financing activities |
| $ |
|
|
|
| ||
Net cash increase (decrease) for the year |
| $ |
|
| $ | ( | ) | |
Cash at beginning of year |
| $ |
|
| $ |
| ||
Cash at end of year |
| $ |
|
| $ |
| ||
Supplemental disclosures: |
|
|
|
|
|
|
|
|
Non-cash investing & financing activities: |
|
|
|
|
|
|
|
|
Common Stock issued for acquisition |
| $ |
|
| $ |
| ||
Accounts receivable acquired from acquisition |
| $ |
|
| $ |
| ||
Intangible assets acquired from acquisition |
| $ |
|
| $ |
| ||
See Notes to Consolidated Financial Statements
| F-7 |
| Table of Contents |
Kindcard, Inc.
Notes to Consolidated Financial Statements
at January 31, 2022 and 2021
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Formerly MWF Global Inc. (now known as Kindcard, Inc. the “Company”) was incorporated in the State of Nevada as a for-profit company on November 18, 2016, and established a fiscal year end of January 31. The Company was organized to sell unique country specific handcrafted natural products with a focus on sourcing these products from South-East Asia and offering these products for sale through the Company’s web site and to establish other distribution channels. On June 1, 2021 Michael Rosen purchased the majority shares of MWF Global Inc. for the purchase price of $
On June 7, 2021, the Company (“Buyer”) entered into a Stock Purchase Agreement with KindCard, Inc., a Massachusetts corporation (“KindCard”) and Croesus Holdings Corp, a Massachusetts corporation (jointly hereinafter, “Seller”).
The June 7, 2021 Stock Purchase Agreement included the acquisition of the Tendercard Division of Croesus Holdings Corp. now a subsidiary of Kindcard, Inc. Tendercard, Inc. was incorporated in the State of Nevada as a for-profit company on August 26, 2021. The Company’s principal business activity is providing proprietary stored value gift card programs to small and mid-sized entities, chain store and other multi-location environments via its host-capture processing system.
On June 16, 2021, Michael Rosen was appointed as a Director of the Company. On June 30, 2021, concurrent with William D Mejia’s resignation as Director, President, Secretary, Treasure and Principal Executive and Financial Officer of the Company, Mr. Michael Rosen has been appointed the President, Secretary and Treasurer of the Company.
On September 16, 2021, the Company announced that the Stock Purchase Agreement, dated June 7, 2021 closed on August 16, 2021. The Company issued
Going concern
To date the Company has generated revenues from its business operations and has incurred accumulated operating losses of $
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for financial information.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Accordingly, actual results could differ from those estimates, these estimates include Allowance of doubtful accounts, and Impairment of long-lived assets.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
| F-8 |
| Table of Contents |
Kindcard, Inc.
Notes to Consolidated Financial Statements (continued)
January 31, 2022 and 2021
Revenue Recognition
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Revenue is recognized when all of the following criteria are met:
(i) Identification of the contract, or contracts, with a customer (ii) Identification of the performance obligations in the contract (iii) Determination of the transaction price (iv) Allocation of the transaction price to the performance obligations in the contract (v) Recognition of revenue when, or as, we satisfy performance obligation
We currently offer the following products and services:
Vault Program provides cash pick up services for retail & wholesale merchants the within North American retail market. Commission revenues are recorded over the life of these multiyear contracts.
Tendercard provides a stored value point of sale gift card processing solution to small and mid-sized businesses within North American retail market. The Company’s proprietary host-based program provides real time data and accurate records of all activity related to the gift card processing account and the related monthly reporting. Service fee revenues are recorded a over the life of these multiyear contracts.
Fair Value of Financial Instruments
The Company measures its financial and non-financial assets and liabilities, as well as makes related disclosures, in accordance with FASB Accounting Standards Codification No. 820, Fair Value Measurement (“ASC 820”), which provides guidance with respect to valuation techniques to be utilized in the determination of fair value of assets and liabilities. Approaches include, (i) the market approach (comparable market prices), (ii) the income approach (present value of future income or cash flow), and (iii) the cost approach (cost to replace the service capacity of an asset or replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable.
Loss per Common Share
The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted loss per share is the same as basic loss per share due to the lack of dilutive instruments in the Company.
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
| F-9 |
| Table of Contents |
Kindcard, Inc.
Notes to Consolidated Financial Statements (continued)
January 31, 2022 and 2021
NOTE 2 – BUSINESS ACQUISITION
On June 7, 2021, the Company (“Buyer”) entered into a Stock Purchase Agreement (“the Acquisition”) and acquired 100% of Kindcard, Inc., a Massachusetts corporation (“KindCard”) and the Tendercard Division of Croesus Holdings Corp, a Massachusetts corporation (jointly hereinafter, “Seller”). Total consideration was
Tendercard, Inc. was incorporated in the State of Nevada as a for-profit company on August 26, 2021. The Company’s principal business activity is providing proprietary stored value gift card programs to small and mid-sized entities, chain store and other multi-location environments via its host-capture processing system.
On September 16, 2021, the Company announced that the Stock Purchase Agreement, dated June 7, 2021 closed on August 16, 2021. The Company issued
The Company recorded the acquisition in accordance with ASC-805, pertaining to business combinations. The following table summarizes the consideration paid for the acquisition and the amounts of the assets acquired at fair market value assumed recognized at the acquisition date.
Purchase Price Considerations |
| Fair Value |
| |
Stock Consideration |
| $ |
| |
SBA Loan |
|
|
| |
Total Purchase Consideration & Assumed Liabilities |
| $ |
| |
Tangible Assets |
|
|
|
|
Cash |
|
|
| |
Accounts Receivable |
|
|
| |
Intangible Assets |
|
|
|
|
Customer Lists |
|
|
| |
Website |
|
|
| |
Trade Name |
|
|
| |
Technology |
|
|
| |
Goodwill |
|
|
| |
Total Assets |
| $ |
| |
| F-10 |
| Table of Contents |
Kindcard, Inc.
Notes to Consolidated Financial Statements (continued)
January 31, 2022 and 2021
NOTE 3 – ACCOUNTS RECEIVABLE, Net
We estimate credit loss reserves for accounts receivable on an individual receivable basis. A specific allowance is established based on expected future cash flows and the financial condition of the debtor. We charge off customer balances in part or in full when it is more likely than not that we will not collect that amount of the balance due. We consider any balance unpaid after the contract payment period to be past due. There are $
NOTE 4 – LONG TERM DEPOSIT
The Company accounts for software development costs in accordance with applicable guidelines. Software development costs include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Software development costs also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Such costs related to software development are included in software development expense until the point that technological feasibility is reached. Once technological feasibility is reached, such costs are capitalized and depreciated over the useful estimated lives of the software. For software modifications or developments, the Company expenses the costs. The Company entered into a development contract for its DEB Platform of $
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of the asset generally ranging from three to seven years.
Property and equipment consist of the following at:
|
| January 31, |
|
| January 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
Merchandise and equipment: Vault |
| $ |
|
| $ |
| ||
Merchandise and equipment: Card Printer |
|
|
|
|
|
| ||
Less: accumulated depreciation |
|
| ( | ) |
|
|
| |
Total |
| $ |
|
| $ |
| ||
Depreciation expense amounted to approximately $
NOTE 6 – GOODWILL AND INTANGIBLE ASSETS
The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired and liabilities assumed, including related tax effects. Goodwill is not amortized; instead, goodwill is tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors such as macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its fair value.
| F-11 |
| Table of Contents |
Kindcard, Inc.
Notes to Consolidated Financial Statements (continued)
January 31, 2022 and 2021
NOTE 6 – GOODWILL AND INTANGIBLE ASSETS (continued)
Goodwill
Goodwill recorded was $
Intangible assets
Intangible assets are comprised of customer relationships and brands acquired in a business combination specifically related to the Tendercard division (see note 2). The Company amortizes intangible assets with a definitive life over their respective useful lives. Assets with indefinite lives are tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist. The Company did not note any impairment as of January 31, 2022.
Intangible assets consist of the assets assumed in the acquisition of the Tendercard Division on June 7, 2021 (see note 2) and its DEB Platform. On December 21, 2021 the Company entered into a contract to develop the DEB Platform, its proprietary payment processing platform for a total cost of $
|
| January 31, 2022 |
|
| January 31, 2021 |
| ||
Definite-lived intangible assets |
|
|
|
|
|
| ||
Technology: DEB Platform |
| $ |
|
| $ |
| ||
Technology: Tendercard Program |
|
|
|
|
|
| ||
Customer Lists |
|
|
|
|
|
| ||
Trade Name |
|
|
|
|
|
| ||
Less: accumulated amortization |
|
| ( | ) |
|
|
| |
Definite-lived intangible assets, net |
| $ |
|
| $ |
| ||
Indefinite-lived intangible assets |
|
|
|
|
|
|
|
|
Website |
| $ |
|
| $ |
| ||
Total Intangibles |
| $ |
|
| $ |
| ||
The following is the future estimated amortization expense related to intangible assets as of January 31, 2022:
Year ending January 31, |
|
|
|
|
2023 - |
|
|
| |
2024 - |
|
|
| |
2025 - |
|
|
| |
2026 - |
|
|
| |
2027 - |
|
|
| |
Total - |
| $ |
|
NOTE 7 – INCOME TAXES
A reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:
Due to recurring losses, the Company’s tax provision for the years ended January 31, 2022 and 2021 was $
|
| January 31, 2022 |
|
| January 31, 2021 |
| ||
|
|
|
|
|
|
| ||
Net loss before income taxes per financial statements |
| $ | ( | ) |
| $ | ( | ) |
Income tax rate |
|
| % |
|
| % | ||
Income tax recovery |
|
| ( | ) |
|
| ( | ) |
Valuation allowance change |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Provision for income taxes |
| $ |
|
| $ |
| ||
The significant component of deferred income tax assets at January 31, 2022 and 2021, is as follows:
|
| January 31, 2022 |
|
| January 31, 2021 |
| ||
Net operating loss carry-forward |
| $ |
|
| $ |
| ||
Valuation allowance |
|
| ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Net deferred income tax asset |
| $ |
|
| $ |
| ||
The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more likely-than-not to be realized from future operations. The Company has chosen to provide a full valuation allowance against all available income tax loss carry forwards. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. The valuation allowance is reviewed annually. When circumstances change, and which cause a change in management’s judgment about the realizability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.
As of January 31, 2022, and 2021, the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the year ended January 31, 2022 and 2021 and no interest or penalties have been accrued as of January 31, 2022 and 2021. As of January 31, 2022, and 2021, the Company did not have any amounts recorded pertaining to uncertain tax positions.
The tax years from 2017 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.
NOTE 8 – CURRENT LIABILITIES
Accounts Payable
Accounts Payable is comprised of Trade payables of $
Accrued Payroll Expenses
Balance represents Accrued Salaries & Wages $
NOTE 9 – DUE TO RELATED PARTY
Due to Related Party
During the year ended January 31, 2022 the CEO paid expenses of $
| F-12 |
| Table of Contents |
Kindcard Inc.
Notes to Consolidated Financial Statements (continued)
January 31, 2022 and 2021
NOTE 10 – SBA Loan
The balance consists of Small Business Administration Economic Disaster Injury Loan assumed in the acquisition of Kindcard on June 7, 2021, with a principal balance of $
Year ending January 31,
2023: |
| $ |
| |
2024: |
| $ |
| |
2025: |
| $ |
| |
2026: |
| $ |
| |
2027: |
| $ |
| |
Thereafter |
| $ |
| |
Total |
| $ |
|
NOTE 11 – COMMITMENTS AND CONTINGENCIES
The recent outbreak of the coronavirus COVID-19 has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have a material adverse impact on global economic conditions as well as on the Company's business activities. The extent to which COVID-19 may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. These events are highly uncertain and, as such, the Company cannot determine their financial impact at this time. No adjustments have been made to the amounts reported in these consolidated financial statements as a result of this matter.
NOTE 12 – COMMON STOCK
The Company is authorized to issue
The Company issued
NOTE 13 – SUBSEQUENT EVENTS
An Asset Purchase Agreement, dated as of 1st day of January, 2022, was entered into between Wholesale Payments LLC, a Wyoming limited liability company (“Seller”) and Kindcard, Inc., a Nevada corporation (“Buyer”) to purchase 100% of the assets of Wholesale Payments, LLC. Pursuant to Sections 206(b)(ii) and 206(b)(iii), the Buyer and the Seller agreed to terminate this Agreement on March 9, 2022. No assets were transferred to the Company as of January 31, 2022.
| F-13 |
| Table of Contents |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
Dismissal of Previous Independent Registered Public Accounting Firm
On December 20, 2021, the Board of Directors dismissed the Company's independent registered public accounting firm Sadler Gibb & Associates LLC (“Sadler Gibb”).
Engagement of New Independent Registered Public Accounting Firm
On January 31, 2022, Kindcard, Inc. appointed Assurance Dimensions Certified Public Accountants & Associates as the Company’s independent registered public accounting firm for the fiscal year ending January 31, 2022.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this annual report, as required by Rule 13a -15d and 15d-15e under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s principal executive officer and principal financial officer. Based upon that evaluation, our company’s principal executive officer and principal financial officer concluded that as of January 31, 2022 our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s Principal Executive and Principal Financial officer and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
| 1. | Pertains to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of assets; |
|
|
|
| 2. | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America and receipts and expenditures are being made in accordance with authorizations of management and directors; and |
|
|
|
| 3. | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements. |
| 12 |
| Table of Contents |
Management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments as of the end of the period covered by this report. Management conducted the assessment based on certain criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. As of January 31, 2022, management determined material weaknesses existed with our internal control over financial reporting as discussed below.
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. Due to these material weaknesses management concluded that our internal control over financial reporting was not effective as of January 31, 2022.
Material Weakness Discussion and Remediation
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an eeffect on the Company's previous reported financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures could result in the Company’s review of its financial statements in the future of being in-effective.
We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company. This will be achieved by: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turnover issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the small business issuer's last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
| 13 |
| Table of Contents |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers and director are as follows:
Name |
| Age |
| Position |
Michael Rosen |
| 54 |
| President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and Chairman of the Board of Directors |
Business Experience
Mr. Michael Rosen
Michael Rosen co-founded Acute Management Group in 2012 and has since served as president and head of B2B Sales & Marketing.
Mr. Rosen began his healthcare career with Ambient Healthcare in 2001. He served as Vice-President and shareholder and grew Ambient Healthcare from one location to 24 locations and increased Ambient Healthcare employees from a 12 to over 700. Ambient Healthcare was successfully sold to a private equity fund in 2015.
In 2016 Mr. Rosen cofounded Safeway Distributors. He served as Vice President and head of distribution. Safeway Distributors was successfully sold in 2020.
Mr. Rosen was born in Providence, Rhode Island and studied at the University of Rhode Island.
Director Independence
Our board of directors is currently composed of one member, Michael Rosen, who does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.
Involvement in Legal Proceedings
To our knowledge, there have been no material legal proceedings during the last ten years that would require disclosure under the federal securities laws that are material to an evaluation of the ability or integrity of any of our directors or executive officers.
| 14 |
| Table of Contents |
Potential Conflicts of Interest
We are not aware of any current or potential conflicts of interest with Mr. Rosen, other business interests and his involvement with Kindcard, Inc.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
Kindcard, Inc., has made no provisions for paying cash or non-cash compensation to its sole officer and director. No salaries are being paid at the present time, and none will be paid unless and until our operations generate sufficient cash flows.
The table below summarizes all compensation awarded to, earned by, or paid to our named executive officer for all services rendered in all capacities to us for the years ending January 31, 2022 and January 31, 2021.
Summary Compensation of Named Executive Officers
Name and Principal Position |
| Fiscal Year |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||
Michael Rosen President, Chief Executive Officer, Secretary, Treasurer |
| 2022 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0 |
|
Michael Rosen President, Chief Executive Officer, Secretary, Treasurer |
| 2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0 |
|
William Dumo Mejia President, Chief Executive Officer, Secretary, Treasurer |
| 2020 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0 |
|
Outstanding Equity Awards at Fiscal Year End
We did not pay any salaries in 2022 and 2021. None of our executive officers received any equity awards, including, options, restricted stock, performance awards or other equity incentives during the fiscal year ended January 31, 2022 and January 31, 2021 for Kincard, Inc.
Employment Contracts
At this time, Kindcard, Inc. has not entered into any employment agreements with its sole officer and director. If there is sufficient cash flow available from our future operations, the company may enter into employment agreements with our sole officer and director or future key staff members.
Stock Awards Plan
The company has not adopted a Stock Awards Plan but may do so in the future. The terms of any such plan have not been determined.
Director Compensation
The Board of Directors of the Company has not adopted a stock option plan. The company has no plans to adopt it but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board (the “Committee”). The committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted. Kindcard, Inc. may develop an incentive-based stock option plan for its officers and directors and may reserve up to 10% of its outstanding shares of common stock for that purpose.
| 15 |
| Table of Contents |
The table below summarizes all compensation awarded to, earned by, or paid to our directors for all services rendered in all capacities to us for the period from January 31, 2022, and January 31, 2021.
DIRECTOR COMPENSATION | ||||||||||||||||||||||||||||
Name |
| Fees Earned or Paid in Cash ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Non-Qualified Deferred Compensation Earnings ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| |||||||
Michael Rosen |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
William Dumo Mejia |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Board Committees
We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors. We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information with respect to the beneficial ownership of our voting securities by (i) each director and named executive officer, (ii) all executive officers and directors as a group; and (iii) each shareholder known to be the beneficial owner of 5% or more of the outstanding common stock of the Company as of January 31, 2022
Beneficial ownership is determined in accordance with the rules of the SEC. Generally, a person is considered to beneficially own securities: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, and (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). For purposes of computing the percentage of outstanding shares held by each person or group of persons, any shares that such person or persons has the right to acquire within 60 days of January 31, 2021 are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Ownership Common Stock (1) |
| |||||
Directors and Officers |
| No. of Shares |
|
| % of Class |
| ||
RMR Management LLC, 5600 Saint Annes Way, Boca Raton FL(1) |
|
| 54,000,000 |
|
| 71.217 | %(2) | |
|
|
| ||||||
All officers and directors as a group |
|
| 54,000,000 |
|
|
| 71.217 | % |
(1) Michael Rosen hold sole voting and dispositive power of 54,000,000 common shares of stock
(2) Based on 75,825,000 shares of common stock issued and outstanding as of January 31, 2021.
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| Table of Contents |
ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Transactions with Related Persons
During the year ended January 31, 2022, the CEO paid expenses of $200,869 on behalf of the Company. The total amount owed to the CEO as of January 31, 2022 was $296,498 (January 31, 2020 - $63,048, January 31, 2021 - $32,581). The amounts due to related party are unsecured and non- interest-bearing with no set terms of repayment.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees paid to Auditors
Audit Fees
The following table summarizes the fees of Assurance Dimensions, Inc. and Sadler & Gibb Associates, LLC, our independent registered public accounting firms billed for each of the last two fiscal years for audit services and other services:
Fee Category |
| 2022 |
|
| 2021 |
| ||
Audit Related Fees Paid to Assurance Dimensions, Inc.& Sadler & Gibb Associates, LLC (1) |
| $ | 50,000 |
|
| $ | 13,000 |
|
Tax Fees (2) |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Total Fees |
| $ | 50,000 |
|
| $ | 50,000 |
|
(1) Consists of fees for professional services rendered in connection with the financial statements included in our Annual Report on Form 10-K and quarterly reports on Form 10-Q.
(2) Consists of fees relating to any tax compliance and tax planning.
The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management.
We do not have an Audit Committee. Our Board pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees paid for fiscal years 2022 and 2021 were pre-approved by our Board.
| 17 |
| Table of Contents |
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Please see the “Exhibit Index,” which is incorporated herein by reference, following the signature page for a list of our exhibits.
| 18 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Kindcard, Inc. |
|
|
|
|
Dated: May 16, 2022 | By: /s/ Michael Rosen |
|
| Michael Rosen President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
| Date |
/s/ Michael Rosen |
| May 16, 2022 |
Michael Rosen President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer |
|
|
| 19 |
| Table of Contents |
EXHIBIT INDEX
| ||
|
|
|
| ||
|
|
|
| ||
|
|
|
31.2 |
| Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15(d)-14(a) of the Securities Act of 1934 * |
|
|
|
| ||
|
|
|
32.2 |
| Certification of Chief Financial Officer under Section 1350 as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** |
|
|
|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
|
|
|
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document |
|
|
|
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
[1] Incorporated by reference from the Company’s S-1 filed with the Commission on July 24, 2017.
[2] Incorporate by reference from the Company’s S-1 filed with the Commission on July 24, 2017
* Included in Exhibit 31.1
| 20 |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Rosen, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Kindcard, Inc.; |
|
|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
|
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
|
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
|
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
|
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
|
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
|
|
|
|
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
| Dated: May 16, 2022 | Kindcard, Inc. |
|
|
|
|
|
|
| By: /s/ Michael Rosen |
|
|
| Michael Rosen President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer |
|
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Michael Rosen, President and Chief Executive Officer of Kindcard, Inc., hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
| 1. | the annual report on Form 10-K of Kindcard, Inc. for the fiscal year ended January 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
|
|
|
| 2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Kindcard, Inc.. |
| Dated: May 16, 2022 | Kindcard, Inc. |
|
|
|
|
|
|
| By: /s/ Michael Rosen. |
|
|
| Michael Rosen President and Director Principal Executive Officer Principal Financial Officer Principal Accounting Officer |
|