This Quarterly Report Form 10-Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicableSecurities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. OverviewBlueOne Card Inc. , aNevada corporation (the "Company"), through our relationship with our program manager,EndlessOne Global, Inc. , aNevada corporation (the "Program Manager"), is a reseller of an all-in-one branded card with numerous user benefits. Through our relationship with our Program Manager, we are a FinTech company aiming to provide innovative pay out solutions and prepaid cards to consumers. Unlike other prepaid card distributors and companies, we specifically aim to target those who are unbanked, or non-bankable and who have needs crossing international borders. According to the 2018 data from theFederal Reserve , there are an estimated 55 million adults currently residing in theU.S. who are unbanked or underbanked.2 This means that about 17% of the entireU.S. population has difficulties utilizing the standard banking system. This is our target group customers. Through our relationship with our Program Manager, we earn our revenues mostly through monthly fees charged to customers for the issued general purpose reloadable ("GPR") prepaid card, reloading fee, ATM withdrawal fee, and card to card money transaction fee.
We are currently headquartered in
BackgroundBlueOne Card, Inc. (formerly known as "Avenue South Ltd. ," "TBSS International, Inc. ," or "Manneking Inc. ") was incorporated onJuly 6, 2007 under the laws of theState of Nevada . We started our business as a retailer and importer of domestic home furnishings fromHong Kong . OnSeptember 30, 2011 , we changed our name toTBSS International, Inc. , which was engaged in gold mining and drilling and general construction.
On
On
Reseller Agreement with
EffectiveAugust 15, 2020 , we entered into the Authorized Reseller Agreement with the Program Manager (the "Reseller Agreement") for a two-year term, pursuant to which we have agreed to be a reseller or an independent sales representative of the Program Manager and its products and the Program Manager has agreed to support our reselling efforts. The Reseller Agreement's term was extended onAugust 1, 2022 for a two-year period, and it expires onAugust 14, 2024 . The Reseller Agreement does not provide exclusivity and there are no volume sales requirements pertaining to our reselling efforts. The Reseller Agreement is renewable by mutual consent of each of the parties for one-year terms unless either party provides written notice to the other party at least 90 days prior to the termination of the term of the Reseller Agreement. The Reseller Agreement may be terminated by either party upon a material breach of either party with the non-breaching party providing written notice to the breaching party and the breach remaining uncured with 60 days of the notice. The Reseller Agreement may also be terminated by either party by written notice if either party ceases to carry on as a going concern, becomes the object of the institution of voluntary or involuntary proceedings in bankruptcy, insolvency, or liquidation, makes an assignment for the benefit of creditors, or if a receiver is appointed with respect to all or a substantial part of its assets.
2https://en.wikipedia.org/wiki/Unbanked#:~:text=The%20unbanked%20in%20the%20United%20States,-The%20unbanked%20are&text=The%20Federal%20Reserve%20estimated%20there,state%20Mississippi%2C%20at%2016.4%25
13 Our Unique Platform Through our relationship with our Program Manager, we provide a unique platform different from other competitors. Unlike many other institutions and companies who only do card to card transfer domestically, our General Purpose Reloadable ("GPR") GPR BlueOne prepaid card can instantly transfer money from card to card across the border through our mobile application. Consumers who receive the card-to-card transfer can easily cash out the money at any Automated Teller Machines ("ATM") in the world. Thus, using our platform, consumers can save time, as well as enjoy reasonable foreign exchange rate cost.
Our Principal Products and Services
Through our relationship with our Program Manager, we offer GPR prepaid cards that provide consumer benefits such as no overdraft fees, no interest fees, virtual bank accounts, and free direct deposit.
Some of the benefits of the Program Manager's prepaid, branded cards are as follows:
? The mobile application is functional now for iOS devices (Apple), android, and
windows (Microsoft).
? The Program Manager provides a Global Remittance Network ("GRN") meaning that
it will connect any proprietary accounts or card systems to other systems
worldwide. ? Free checking account and check books.
? We intend to resell the Program Manager's prepaid, branded cards to liquor
stores throughout theU.S. and online at www.blueonecard.com as well. ? The Program Manager's prepaid, branded cards provides a Dynamic Card Verification Value ("CVV") function.
? The Program Manger's prepaid, branded cards access are lock and unlocked with
Sensor Assisted Flight Envelope ("SAFE") technology. Consumers will also
instantly be able to lock and unlock the cards via text Short Message Service
("SMS"). ? The Program Manager provides a free checking account. ? We believe checks will be able to be directly deposited via the Program Manager's mobile application.
Critical Accounting Policies
This "Management's Discussion and Analysis of Financial Condition and Results of Operations" section is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America ("U.S. GAAP"). The preparation of financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosures. On an ongoing basis, we evaluate our estimates, including, but not limited to, those related to income taxes, fair value derivatives, and accrued liabilities. We base our estimates on historical experience, performance metrics and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results will differ from these estimates under different assumptions or conditions. We apply the following critical accounting policies in the preparation of our financial statements: Use of Estimates Financial statements prepared in accordance withU.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable, the valuation of long-lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, assumptions used to value equity instruments issued for financing and compensation, and the valuation of deferred tax assets. Actual results could differ from those estimates. 14
Recent Accounting Pronouncements
See Note 1 of Notes to the Financial Statements contained in this Form 10-Q for management's discussion of recent accounting pronouncements.
Results of Operations for the Three Months and Six Months Ended
Revenues and Cost of Sales We did not sell any prepaid cards to the customers during the three months and six months endedSeptember 30, 2022 as compared to selling prepaid cards of$19,750 and$19,750 for the same comparable periods in 2021. Cost of sales were$0 for the three months and six months endedSeptember 30, 2022 as compared to$12,328 and$12,328 for the same comparable periods in 2021. Operating Expenses Legal & Filing Fees Legal and filing fees consisted of fees incurred by the Company in preparing and filing the regulatory reports with theSecurities and Exchange Commission . The Company recorded legal and filing fees of$4,524 and$21,775 for the three months and six months endedSeptember 30, 2022 , compared to$3,131 and$8,458 for the same comparable periods in 2021, respectively. The increase in legal and filing fees for the three months and six months endedSeptember 30, 2022 resulted primarily due to the Company incurring fees for applying for listing on the OTCQB platform and other expenses relating to the preparation of legal documents and filing fees in the ordinary course of business. Rent The Company recorded rent expense of$26,400 and$46,737 for the three months and six months endedSeptember 30, 2022 , compared to$17 ,337and$34,674 for the same comparable periods in 2021, respectively. The increase in rent expense for the three months and six months endedSeptember 30, 2022 as compared to the comparable period in 2021, resulted due to the increase in monthly rent of the Company premises in 2022 and monthly rent towards leasing a vehicle inJuly 2022 .
General & Administrative Expenses
General and administrative expenses ("G&A") primarily included accounting, consulting and professional fees, officer's compensation and payroll taxes, depreciation, dues and subscriptions, and other administrative expenses. For the three months and six months endedSeptember 30, 2022 , we incurred G&A of$109,996 and$475,327 as compared to$138,856 and$224,250 for the same comparable periods of 2021. The reduction in G&A for the three months endedSeptember 30, 2022 was primarily due to the Company controlling and better managing the professional advisors and consultants, research and development fees and marketing fees, payroll and other administrative expenses to expand its infrastructure and operations. The increase in G&A expenses for the six months endedSeptember 30, 2022 resulted primarily due to retaining the services of professional business advisors to provide strategic consulting services to up list the Company to OTCQX exchange. 15 Other Income (Expense) Other income and expenses include interest expense relating to the financing the purchase of Company vehicle and credit card interest. We reported interest expense of$1,167 and$2,591 for the three months and six months endedSeptember 30, 2022 , as compared to$434 and$1,158 for the same comparable periods of 2021. The increase in interest expense resulted due to the credit card interest charged by the bank due to Company making partial payments on its credit card balances. Net Loss We reported a net loss of$142,086 and$546,430 for the three months and six months endedSeptember 30, 2022 as compared to a net loss of$152,336 and$261,118 for the same comparable periods in 2021. The increase in the net loss was primarily due to the increase in operating expenses incurred by us.
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