BLUEONE CARD, INC. Management Discussion and Analysis or Plan of Operation (Form 10-Q)
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 applicable
Securities and Exchange Commissionregulations and is not intended to serve as a basis for projections of future events. Overview BlueOne Card Inc., a Nevadacorporation (the "Company"), through our relationship with our program manager, EndlessOne Global, Inc., a Nevadacorporation (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 the Federal Reserve, there are an estimated 55 million adults currently residing in the U.S.who are unbanked or underbanked.2 This means that about 17% of the entire U.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 currently have our head office in
BlueOne Card, Inc.(formerly known as " Avenue South Ltd.," " TBSS International, Inc.," or " Manneking Inc.") was incorporated on July 6, 2007under the laws of the State of Nevada. We started our business as a retailer and importer of domestic home furnishings from Hong Kong. On September 30, 2011, we changed our name to TBSS International, Inc., which was engaged in gold mining and drilling and general construction.
We were a "Reporting Issuer" subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act from
November 2, 2010, upon the effectiveness of the Registration Statement on Form S-1, until we suspended our reporting obligations May 29, 2019through the filing of a Form 15.
Reseller agreement with
August 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.
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, which will be available during Fall of 2021. 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 main 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 charges, virtual bank accounts and free direct deposit.
Some of the advantages of our GPR BlueOne prepaid cards are:
? Our mobile platform will be available in fall 2021 for iOS (Apple) devices,
Android and Windows (Microsoft).
? We provide a Global Remittance Network (“GRN”), which means we can connect any
proprietary accounts or card systems to other systems worldwide. ? Free checking account and check books.
? We believe that our GPR BlueOne prepaid cards will be distributed in all alcohol
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 in
the 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 U.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 the 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 and nine months ended
Revenue We sold 5,000 and 0 prepaid debit cards and recorded
$52,450and $0in revenues for the three months ended December 31, 2021and 2020. We sold 7,500 and 0 prepaid debt cards and charged a one-time set up fee of $3,500during the nine months ended December 31, 2021, and recorded $72,200and $0in revenues for the nine months ended December 31, 2021and 2020, respectively, since the commencement of our business plan. Revenues for the three months and nine months periods ended December 31, 2021as compared to the same comparable periods in 2020, increased due to the increase in sale of prepaid debit cards to customers. Cost of Sales We recorded $42,450and $0as cost of sales for the three months ended December 31, 2021and 2020. We recorded $54,778and $0as cost of sales for the nine months ended December 31, 2021and 2020, respectively. Cost of sales for the three months and nine months ended December 31, 2021increased as compared to the same comparable periods in 2020 primarily due to the increase in sale of prepaid debit cards. Operating Expenses Legal & Filing Fees Legal and filing fees consisted of fees incurred by the Company in preparing and filing the regulatory reports with the Securities and Exchange Commission. The Company recorded legal and filing fees of $1,622and $10,080for the three months and nine months periods ended December 31, 2021and 2020, compared to and $5,144and $9,205for the three months and nine months ended December 31, 2020, respectively. The decrease in legal and filing fees for the three months ended December 31, 2021resulted because the Company incurred expenses relating to the preparation of legal documents and filing fees due to the name change and change of ownership in 2020. The increase in legal and filing fees for the nine months ended December 31, 2021as compared to the same comparable period in 2020 resulted because the Company filed the registration statement with the Securities and Exchange Commissionon August 31, 2021and incurred legal and filing fees. Rent The Company recorded rent expense of $18,337and $11,777for the three months ended December 31, 2021and 2020, and $53,011and $21,254for the nine months ended December 31, 2021and 2020, respectively. The increase in rent expense for the three months and nine months ended December 31, 2021resulted due to the Company leasing an office facility in November 2020and recording three months and nine months' rent to manage its business operations. For the three months and nine months ended December 31, 2020, the Company's office lease term matured in April 2020and it recorded only one month rent in that quarter. The Company leased the new office space starting November 1, 2020and recorded the rent expense for two months for the period ended December 31, 2020, respectively.
General and 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 nine months ended
December 31, 2021, we incurred G&A of $124,077and $348,327as compared to $73,573and $138,708for the same comparable periods of 2020. The increases in G&A were primarily due to the Company engaging accountants, consultants, research and development fees and marketing fees, payroll and other administrative expenses to expand its infrastructure and operations. 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 $829and $1,987for the three months and nine months ended December 31, 2021and 2020, as compared to $1,054and $2,936for the same comparable periods of 2020. The reduction in interest expense resulted since we started to pay the credit card balances on a timely basis reducing the interest charged. Net Loss We reported a net loss of $134,865and $395,983for the three months and nine months ended December 31, 2021as compared to a net loss of $91,548and $172,103for the same comparable periods in 2020. The increase in the net loss was primarily due to the increase in operating expenses incurred by us.
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