BLUEONE CARD, INC. 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 payout 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
We were a "Reporting Issuer" subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act fromNovember 2, 2010 , upon the effectiveness of the Registration Statement on Form S-1, until we suspended our reporting obligationsMay 29, 2019 through the filing of a Form 15.
Reseller Agreement with
Effective as ofAugust 15, 2020 , we entered into the Authorized Reseller Agreement with the Program Manager (the "Reseller Agreement") 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 term of the Reseller Agreement is for 24 months. 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. 2
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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 GPR BlueOne prepaid card can instantly transfer money from card to card across the border through our mobile application, which will be available Spring of 2021. Consumers who receive the card-to-card transfer can easily cash out the money at any 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 our GPR BlueOne prepaid cards are as follows:
? Our mobile platform will be available Spring of 2021 for iOS devices (Apple),
android, and windows (Microsoft).
? We provide a Global Remittance Network ("GRN") meaning that we can connect any
proprietary accounts or card systems to other systems worldwide.
? Free checking account and check books.
? We believe our GPR BlueOne prepaid cards will be distributed throughout liquor
stores and easily obtainable online at www.blueonecard.com as well.
? Dynamic CVV function.
? Lock and unlock credit card access with SAFE technology. Consumers can
instantly lock and unlock their cards via text (SMS).
? Free checking account.
? Direct deposit of checks via our 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 with accounting principles generally accepted in theU.S. 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 Nine Months Ended
Revenue
We had no revenues for the three months and nine months ended
Cost of Sales
We incurred no cost of sales for the three months and nine months ended
Operating Expenses
General & Administrative Expenses
General and administrative expenses ("G&A") primarily included accounting,
consulting and professional fees, rent, legal and filing fees, officer's
compensation, and other administrative expenses. For the three months ended
December 31, 2020 , we incurred G&A of $79,969 as compared to $20,689 for the
same comparable period of 2019. For the nine months ended December 31, 2020 , we
incurred G&A of $140,857 as compared to $29,723 for the same comparable period
of 2019. The increases in G&A were primarily due to the Company engaging
accountants, consultants, rent, Edgarizing and filing fees, payroll and other
administrative expenses to expand its infrastructure and operations.
Depreciation
Depreciation expense for the three months ended December 31, 2020 and 2019 was
$10,526 and $1,875 . Depreciation expense for the nine months ended December 31,
2020 and 2019 was $28,310 and $1,875 , respectively. The increases in
depreciation expense in the respective periods was due to the purchase of office
furniture and Company vehicle.
15
Other Income (Expense)
Other income and expenses include interest expense relating to the finance
arrangement on purchase of Company vehicle. We incurred interest expense of
Net Losses We incurred a net loss of$91,548 for the three months endedDecember 31, 2020 as compared to a net loss of$22,564 for the same comparable period in 2019. We incurred a net loss of$172,103 for the nine months endedDecember 31, 2020 as compared to a net loss of$31,598 for the same comparable period in 2019. The increase in the net losses was primarily due to the increase in operating expenses incurred by us.
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