Executive Summary / Key Takeaways

• OneSolution Technology Inc. ($KRFG) is undergoing a strategic transformation, pivoting from its historical ventures to focus on the burgeoning arts and collectibles market through its subsidiary, Heavenly Grace Limited. This new direction leverages blockchain and NFT technologies to create Digital Ownership Tokens (DOTs), aiming to revolutionize provenance, transparency, and transaction logistics in the sector.
• Despite a stable gross profit margin of approximately 40% for the three months ended June 30, 2025, the company reported a net loss of $307,611, reflecting significant investments in sales and marketing ($251,074) and general and administrative expenses ($64,225) during the period.
• KRFG faces substantial "going concern" uncertainties, marked by recurring losses and an accumulated deficit of $7.75 million as of June 30, 2025, necessitating continued financial support from shareholders and external financing.
• The company's operational structure as a U.S.-listed Hong Kong holding company exposes it to unique regulatory and political risks from both Hong Kong and PRC authorities, including potential delisting under the HFCAA if auditor inspections are disallowed.
• KRFG's future hinges on the successful expansion of its online trading platform, global sourcing of collectibles, and the ability to attract both sellers and collectors to its blockchain-enabled ecosystem, which could establish a competitive moat through technological differentiation.

A New Canvas: OneSolution Technology's Strategic Pivot into Digital Collectibles

OneSolution Technology Inc. ($KRFG), a Delaware holding company, is charting a new course, transforming from its diverse past into a focused player in the arts and collectibles market. This strategic pivot, formalized with the acquisition of Heavenly Grace Limited in November 2024 and the commencement of its operations in April 2025, positions KRFG at the intersection of traditional art commerce and cutting-edge blockchain technology. The company's overarching strategy is to enhance the collector's experience and streamline transactions by leveraging Digital Ownership Tokens (DOTs) for improved transparency and verifiable provenance.

The company's history reflects a dynamic evolution. Incorporated in 1995 as ARXA International Energy, Inc., it later became King Resources, Inc., before adopting its current name, OneSolution Technology Inc., in December 2023. A significant corporate restructuring in September 2024 saw the divestiture of its equity interests in Powertech Management Limited and Powertech Corporation Limited, yielding a net gain of $2.51 million. This move cleared the path for the acquisition of Heavenly Grace Limited, a Hong Kong-based entity, marking a decisive shift towards the arts and collectibles sector. KRFG operates primarily through its Hong Kong subsidiary, Heavenly Grace, which engages in both online and physical trading of arts and collectibles.

Technological Edge: Blockchain and NFTs for Authenticity

At the core of OneSolution Technology's investment thesis is its innovative application of blockchain and NFT technologies within the arts and collectibles market. The company utilizes these technologies to create Digital Ownership Tokens (DOTs), which serve as title documentation and a transparent ledger for each artwork or collectible. This approach aims to provide specific, tangible benefits over traditional methods, such as enhanced authenticity verification, immutable ownership records, and streamlined transaction logistics.

The "sell then mint" process adopted by KRFG is a notable operational detail: DOTs are not minted until a sale has been confirmed, mirroring how legal documents are drafted and signed after a property transaction. This process ensures that the digital ownership title is directly tied to a confirmed transaction. The physical art pieces are stored in KRFG's insured warehouse prior to sale. This technological differentiation contributes significantly to KRFG's competitive moat by offering a verifiable and transparent system in a market often plagued by issues of authenticity and provenance. For investors, this translates into a potential for increased trust and efficiency within the collectibles market, driving adoption and potentially higher transaction volumes on KRFG's platforms.

Competitive Landscape: Carving a Niche in a Diverse Market

OneSolution Technology operates in a specialized niche within the broader technology and collectibles landscape. Competitive analysis identifies large energy and infrastructure players like MYR Group Inc. (MYRG), ExxonMobil (XOM), and Chevron (CVX) as potential indirect competitors due to their involvement in power solutions, KRFG's current focus is distinctly different. Its primary operating subsidiary, Heavenly Grace Limited, is engaged in the arts and collectibles business, leveraging technology to differentiate itself.

In this specific market, KRFG's competitive advantages stem from its proprietary technology in creating DOTs for collectibles and its direct-to-consumer distribution model. This specialization allows KRFG to offer user-friendly designs and potentially foster stronger customer loyalty through enhanced transparency and security. While direct quantitative comparisons with all niche competitors in the digital collectibles space are challenging to ascertain, KRFG's strategic positioning aims to lead in product innovation for everyday applications within the art market. However, KRFG's smaller scale and dependence on supply chains for components represent vulnerabilities, potentially leading to higher costs and production delays compared to larger, more diversified entities. The company's ability to secure high-value collectibles and expand its platform will be crucial in solidifying its competitive standing against both traditional art houses and emerging digital art platforms.

Financial Performance: A Foundation in Transition

OneSolution Technology's financial performance for the three months ended June 30, 2025, reflects a company in a transitional phase, building out its new business model. The company reported net revenue of $19,221, a marginal increase from $19,189 in the comparable period of 2024. Gross profit remained stable at $7,688, yielding a gross profit margin of approximately 40%. This consistency in gross margin suggests a stable pricing and cost structure for its current technical consultancy services, which accounted for 100% of revenue from a single customer, Marvel Digital Group Limited.

However, the company incurred a net loss of $307,611 for the three months ended June 30, 2025, a significant increase from the $161,652 net loss in the prior year. This widening loss is primarily attributable to a substantial increase in operating expenses. Sales and marketing expenses surged to $251,074 from $66,000, largely due to $250,000 in consulting fees. General and administrative expenses also rose by approximately $26,785 to $64,225, driven by higher dues, subscriptions, salaries, and professional fees. Notably, research and development expenses decreased to $0, indicating a pause in R&D activity during the quarter. These figures underscore KRFG's current investment phase, where significant capital is being deployed to establish its market presence and operational infrastructure, rather than generating immediate profitability.

Liquidity and Capital Resources: The Going Concern Challenge

OneSolution Technology's financial health presents a clear "going concern" uncertainty. As of June 30, 2025, the company reported an accumulated deficit of $7.75 million. With current assets of $59,799 against current liabilities of $1.32 million, the company's ability to meet its obligations is heavily reliant on external support. Net cash used in operating activities for the three months ended June 30, 2025, was $42,933, primarily offset by $40,544 in advances from related parties, highlighting the ongoing need for financing.

Management explicitly states that the company's continuation as a going concern is dependent upon improving profitability and obtaining continued financial support from stockholders and external financing. While management believes external financing can be secured, there is no assurance of success on satisfactory terms. The company does not anticipate paying dividends in the foreseeable future, intending to retain all funds for business operations and expansion. Subsequent to the quarter, on July 15, 2025, KRFG issued 13.33 billion shares of common stock to settle consulting fees and an additional 14.00 billion shares as a refundable earnest deposit under a consignment arrangement, further diluting existing shareholders but addressing immediate liabilities. This underscores the critical need for successful execution of its new business model to achieve self-sufficiency.

Strategic Outlook and Regulatory Headwinds

KRFG's strategic outlook centers on expanding its arts and collectibles business. The company plans to open its online trading platform to directly connect sellers and collectors, generating revenue through platform and transaction fees. While currently sourcing collectibles from China and Hong Kong, KRFG intends to expand globally. This initiative, if successful, could significantly scale its operations and diversify its revenue streams beyond the current single customer concentration.

However, this ambitious outlook is shadowed by significant regulatory and political risks. As a U.S.-listed Hong Kong holding company, KRFG is exposed to potential changes in regulations by Hong Kong and PRC authorities, which could materially affect its operations or the value of its securities. The risk of the PRC government disallowing its holding company structure or intervening in its operations is a prominent concern. Furthermore, compliance with the Holding Foreign Companies Accountable Act (HFCAA) poses a threat: if Nigerian authorities (where KRFG's auditor is based) were to disallow PCAOB inspection, the company would need to change its auditor to avoid potential delisting from U.S. exchanges. These geopolitical and regulatory uncertainties represent a substantial overhang on KRFG's future prospects and its ability to execute its growth strategy effectively.

Conclusion

OneSolution Technology Inc. is at a pivotal juncture, having strategically pivoted into the digital arts and collectibles market with a clear technological differentiator in blockchain-enabled Digital Ownership Tokens. This move positions KRFG to capitalize on the growing demand for transparency and verifiable ownership in the collectibles space. While the company's stable gross margins are a positive sign, its current financial performance reflects a nascent stage of development, characterized by significant losses and a reliance on external financing to fund its ambitious growth initiatives.

The success of KRFG's investment thesis hinges on its ability to overcome substantial "going concern" challenges, effectively scale its online platform, and navigate the complex regulatory landscape of Hong Kong and the PRC. Its technological leadership in creating DOTs offers a compelling value proposition, but sustained growth and profitability will require robust execution, successful market penetration, and a clear path to financial independence. Investors considering KRFG must weigh the transformative potential of its blockchain-driven strategy against the inherent risks associated with its operational structure, geopolitical environment, and current liquidity constraints.