OneSolution Technology Inc. SEC 10-K Report

OneSolution Technology Inc., a company primarily engaged in the arts and collectibles business through its subsidiary Heavenly Grace Limited, has released its annual 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the evolving regulatory landscape of Hong Kong and China.

Financial Highlights

• Revenue, net: $76,921. The revenue increased slightly from the previous year, primarily due to growth in technical consultancy services.
• Gross Profit: $30,769. The increase in gross profit was attributable to relative growth in revenue from technical consultancy services.
• Loss from operation: $(572,737). Operating expenses decreased slightly, but the company still reported a loss from operations.
• Net Income (Loss): $1,948,092. The company reported a net income due to a significant gain on the disposal of subsidiaries.
• Net income (loss) per share – Basic and Diluted: $0.00. The net income per share remained less than $0.001, reflecting the company's improved financial performance.

Business Highlights

• Business Overview: Heavenly Grace Limited, a primary operating subsidiary, is engaged in the arts and collectibles business, utilizing blockchain and NFT technologies to enhance the trading experience. The company operates both online and physical trading platforms, providing services such as authentication, valuation, certification, and custody.
• Operational Structure: The company operates through a Delaware holding company structure with subsidiaries in the British Virgin Islands and Hong Kong. This structure presents unique risks, particularly related to regulatory changes in China and Hong Kong.
• Digital Ownership Tokens (DOTs): Heavenly Grace uses blockchain technology to create Digital Ownership Tokens (DOTs) for artworks and collectibles, providing a digital ownership title to physical items. The DOTs are minted and held by third parties, and the company adopts a 'sell then mint' process.
• Geographical Operations: The company primarily sources collectibles from China and Hong Kong, with plans to expand globally. The trading platform is hosted in Hong Kong, and the company collaborates with auction houses in Hong Kong and France.
• Customer Base: The company has a significant reliance on a single major customer, Marvel Digital Group Limited, which contributed to 100% of the revenue for the fiscal years ended March 31, 2025, and 2024.
• Future Outlook: The company plans to open its online trading platform to connect sellers and collectors directly, enabling transactions in exchange for platform and transaction fees. There is also an intention to expand collectible sources worldwide.
• Regulatory Environment: The company is not currently required to obtain permission from Chinese authorities to operate or issue securities to foreign investors. However, there are risks associated with potential changes in Chinese regulations that could impact operations.
• Competitive Landscape: The company competes with traditional collectible shops and leading auction houses like Christie’s and Sotheby’s. The competitive factors include the breadth of the artist and collectibles base, technology sophistication, legal expertise, and brand recognition.
• Employee and Consultant Structure: The company employs a small team, including executive officers, operations and R&D staff, and administration staff, all located in Hong Kong and the PRC.
• Insurance and Risk Management: The company maintains insurance in accordance with industry practices in Hong Kong, including Employee’s Compensation Insurance, office insurance, and third-party risks insurance.

Strategic Initiatives

• Corporate Restructuring: OneSolution Technology Inc. underwent a corporate restructuring on September 30, 2024, by disposing of its subsidiaries Powertech Management Limited and Powertech Corporation Limited, resulting in a net gain of $2,513,875. This strategic move shifted the company's focus to the arts and collectibles business through the acquisition of Heavenly Grace Limited.
• Product Launch: The company is preparing to launch its first batch of smart chargers, marking its entry into the market introduction phase.
• Capital Management: The company reported a working capital deficit of $954,533 as of March 31, 2025, down from $3,045,587 the previous year. It relied on advances from related parties, amounting to $103,035 in 2025, to support its financing activities. The company did not pay dividends during the reported years and does not anticipate paying any in the foreseeable future, as it prioritizes investments in product development and expansion. Additionally, the company issued 1,016,666,664 shares of common stock to settle consulting and service fees.
• Future Outlook: OneSolution Technology Inc. expects to incur significantly greater expenses as it expands its business and enters strategic partnerships. The company plans to rely on financial support from major shareholders and aims to secure up to $20,000,000 in investment from Williamsburg Venture Holdings, LLC over the next 2-3 years. The company is focused on improving profitability and securing external financing to continue as a going concern, with an emphasis on enhancing its e-commerce platform and building customer relationships.

Challenges and Risks

• Regulatory Risks: Heavenly Grace Limited faces significant regulatory risks due to its operations in Hong Kong and potential future operations in China. The evolving regulatory landscape in China, including recent statements and actions by the PRC government, poses uncertainties regarding the need for approvals from Chinese authorities, which could impact the company's ability to continue its current business structure and operations.
• Customer Concentration Risk: The company is heavily reliant on a single major customer, Marvel Digital Group Limited, which accounted for 100% of its revenue for the fiscal year ended March 31, 2025. This concentration risk means that any loss or reduction in business from this customer could significantly harm the company's financial condition.
• Operational Risks: The company faces operational risks from its dependence on third-party service providers for critical aspects of its business, such as the creation of DOTs. Any disruptions in these services could impair the company's ability to support its users.
• Financial Dependency: The company acknowledges the need for approximately $10 million over the next 18-24 months to implement its business plan, indicating a reliance on external financing. This financial dependency poses a risk if the company is unable to secure the necessary funds on satisfactory terms.
• Market Risks: The company is exposed to market risks related to the volatility of costs and funding requirements, particularly in the context of employee benefits and compliance with international regulations. Additionally, the potential impact of international conflicts and changes in government laws could affect the company's operations and demand for its services. The company also faces risks related to foreign currency exchange rate fluctuations, which could adversely affect its financial results.

SEC Filing: OneSolution Technology Inc. [ KRFG ] - 10-K - Jul. 15, 2025