BLUEONE CARD, INC. The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and other financial information included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements."
Cautionary Note Concerning Factors That May Affect Future Results
This Annual Report, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements in other reports filed with theSecurities and Exchange Commission , in materials delivered to shareholders and in press releases. In addition, the Company's representatives may from time to time make oral forward-looking statements. Forward-looking statements relate to future events and typically address the Company's expected future business and financial performance. Words such as "plan," "expect," "aim," "believe," "project," "target," "anticipate," "intend," "estimate," "should," "could," "forecast" and other words and terms of similar meaning, typically identify such forward-looking statements. In particular, these include, among others, statements relating to:
? the Company's strategy for growth, future revenues, earnings, cash flow, uses
of cash and other measures of financial performance, and market position,
? worldwide economic, political, and capital markets conditions, such as
interest rates, foreign currency exchange rates, financial conditions of our
suppliers and customers, and natural and other disasters or climate change
affecting the operations of the Company or our suppliers and customers,
? new business opportunities, product development, and future performance or
results of current or anticipated products,
? the scope, nature or impact of acquisition, strategic alliance and divestiture
activities,
? the outcome of contingencies, such as legal and regulatory proceedings,
? future levels of indebtedness, common stock repurchases and capital spending,
? future availability of and access to credit markets,
? pension and postretirement obligation assumptions and future contributions,
? asset impairments, ? tax liabilities, ? information technology security, and
? the effects of changes in tax (including the newly enacted Tax Cuts and Jobs
Act), environmental and other laws and regulations in
other countries in which we operate.
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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 prepaid, branded card to be issued by the Program Manager which we believe has numerous user benefits. Through our relationship with our Program Manager, we are 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 customers who are unbanked, or non-bankable, and who have needs crossing international borders. The Program Manager's platform is still in the beta-testing stage and no revenues have been derived therefrom. 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 the Program Manager, we will earn our revenues mostly through commissions derived from monthly fees charged to customers to the Program Manager provided by us for the issued general purpose reloadable prepaid card, reloading fees, ATM withdrawal fees, and card to card money transaction fees. We will be acting as an independent sales representative of the Program Manager and we will not receive revenue from customer contracts, which will be executed with the Program Manager. To date, we have not generated any revenues from our planned business and our business is in a development stage. The Program Manager's platform is still in the beta-testing stage and no revenues have been derived therefrom.
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. , and got engaged in gold mining and drilling and general construction.
On
OnOctober 15, 2019 , we executed a 1 for 100 reverse stock-split. OnJune 30, 2020 , we also executed a 1 for 100 reverse stock-split with a Certificate of Change, and changed our trading symbol to "BCRD." We filed aFINRA corporate action pursuant to FINRA Rule 6490 which was announced on the Daily List as ofJuly 23, 2020 .
Critical Accounting Policies
This "Management's Discussion and Analysis of Financial Condition and Results of Operations" section is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America ("U.S. GAAP"). The preparation of consolidated 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 inventories, income taxes, accounts receivable allowance, fair value derivatives, and reserve for warranty claims. 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 consolidated financial statements:
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
28 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. Revenue Recognition We recognize revenue in accordance with Accounting Standard Update ("ASU") No. 2014-09. This standard provides authoritative guidance clarifying the principles for recognizing revenue and developing a common revenue standard forU.S. generally accepted accounting principles. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in the exchange for those goods or services. Under this guidance, revenue is recognized when control of promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We review our sales transactions to identify contractual rights, performance obligations, and transaction prices, including the allocation of prices to separate performance obligations, if applicable. Revenue and costs of sales are recognized once products are delivered to the customer's control and performance obligations are satisfied.
Recent Accounting Pronouncements
See Note 1 of Notes to Financial Statements contained in this Annual Report for management's discussion of recent accounting pronouncements.
Results of Operations for the year ended
Revenue and Cost of Sales
We did not earn revenues or incurred any cost of sales for the years ended
Operating Expenses Operating expenses included legal, accounting and professional fees, all costs associated with marketing, rent and other expenses. We incurred operating expenses of$272,295 for the year endedMarch 31, 2021 as compared to$95,533 for the year endedMarch 31, 2020 . The increase of$176,762 in operating expenses was primarily due to the increase in filing fees and regulatory fees paid to revive the Company inNevada , increase in payroll costs, increase in depreciation expense, and increase in legal, accounting and professional fees paid to consultants. 29 Other Income (Expense) Our other income and expenses include interest expense relating to the finance arrangement on purchase of Company vehicle. We incurred interest expense of$3,597 for the year endedMarch 31, 2021 as compared to $$241 for the year endedMarch 31, 2020 , respectively. Net Losses We incurred a net loss of$275,892 for the year endedMarch 31 , 2021as compared to a net loss of$95,774 for the year endedMarch 31, 2020 . The increase in loss of$180,118 was due to the increase in operating expenses incurred by us.
Liquidity and Capital Resources
Liquidity and Capital Resources for the year endedMarch 31, 2021 compared to the year endedMarch 31, 2020 March 31, 2021 March 31, 2020 Summary of Cash Flows: Net cash used in operating activities$ (310,177 ) $ (12,481) Net cash used in investing activities (19,500 )
(112,519)
Net cash provided by financing activities 670,179
125,000
Net increase in cash and cash equivalents 340,502
-
Beginning cash and cash equivalents -
-
Ending cash and cash equivalents$ 340,502 $ - To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favourable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to: ? Curtail our operations significantly, or
? Seek arrangements with strategic partners or other parties that may require us
to relinquish significant rights to technology platform and correlated
services, or
? Explore other strategic alternatives including a merger or sale of our
Company.
Operating Activities
Net cash used in operations of $310,177 for the year ended March 31, 2021 was
primarily a result of loss of $275,892 , depreciation of $38,836 , stock
compensation to officer of $1,000 , and decrease in operating assets and
liabilities of $94,121 due to decrease in prepaid deposits of $146,372 , increase
in accrued liabilities of $8,317 , increase in customer deposits of $20,000 , and
increase in related party payables of $43,934 . Net cash used in operations of
$12,481 for the year ended March 31, 2020 was primarily a result of loss of
$95,774 , depreciation of $7,501 , and increase in operating assets and
liabilities of $75,792 due to increase in prepaid deposits of $8,700 , increase
in accrued liabilities of $19,181 and increase in related party payables of
$65,311 .
30
Investing Activities
Net cash used in investing activities for the year ended March 31, 2021 of
$19,500 resulted from cash paid as a down payment for purchase of a vehicle. Net
cash used in investing activities for the year ended March 31, 2020 of $112,519
resulted from the cash used to purchase property and equipment.
Financing Activities
Net cash provided by financing activities for the year ended March 31, 2021 was
$670,179 , which consisted of cash proceeds of $680,000 received from the sale of
common stock, offset by cash paid of $9,821 for the note payable for purchase of
vehicle. Net cash provided by financing activities for the year ended March 31,
2020 was $125,000 from cash received from sale of common stock.
Future Capital Requirements
Our current available cash and cash equivalents are insufficient to satisfy our
liquidity requirements. Our capital requirements for the fiscal year ending
March 31, 2022 will depend on numerous factors, including management's
evaluation of the timing of projects to pursue. Subject to our ability to
generate revenues and cash flow from operations and our ability to raise
additional capital (including through possible joint ventures and/or
partnerships), we expect to incur substantial expenditures to carry out our
business plan, as well as costs associated with our capital raising efforts and
being a public company.
Our plans to finance our operations include seeking equity and debt financing,
alliances or other partnership agreements, or other business transactions, that
would generate sufficient resources to ensure continuation of our operations.
The sale of additional equity or debt securities may result in additional
dilution to our shareholders. If we raise additional funds through the issuance
of debt securities or preferred stock, these securities could have rights senior
to those of our common stock and could contain covenants that would restrict our
operations. Any such required additional capital may not be available on
reasonable terms, if at all. If we were unable to obtain additional financing,
we may be required to reduce the scope of, delay or eliminate some or all of our
planned activities and limit our operations which could have a material adverse
effect on our business, financial condition and results of operations.
Inflation
The amounts presented in our financial statements do not provide for the effect
of inflation on our operations or financial position. The net operating losses
shown would be greater than reported if the effects of inflation were reflected
either by charging operations with amounts that represent replacement costs or
by using other inflation adjustments.
Going Concern
The accompanying financial statements have been prepared on a going concern
basis. For the year ended March 31, 2021 , we recorded a net loss of $275,892 ,
had net cash used in operating activities of $310,177 , had working capital of
$335,653 , and accumulated deficit of $608,986 . These matters raise substantial
doubt about our ability to continue as a going concern for a period of one year
from the date of this filing. Our ability to continue as a going concern is
dependent upon our ability to obtain the necessary financing to meet our
obligations and repay our liabilities arising from normal business operations
when they come due, to fund possible future acquisitions, and to generate
profitable operations in the future. Our management plans to provide for our
capital requirements by continuing to issue additional equity and debt
securities. The outcome of these matters cannot be predicted at this time and
there are no assurances that, if achieved, we will have sufficient funds to
execute our business plan or generate positive operating results. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
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Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
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