COMMITMENTS AND CONTINGENCIES

9 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Leases

The Company reported the following summary of non-cancellable operating leases in accordance with the provisions of ASC 842 Topic 842 “Leases” as follows:

Summary of Non-Cancellable Operating Leases:

	Vehicle		Office Lease		Total
Right-of-use asset, net	$	11,760	$	35,011	$	46,771
Current lease liabilities	$	10,392	$	24,557	$	34,949
Non-current lease liabilities		-		11,308		11,308
Total operating lease liabilities	$	10,392	$	35,865	$	46,257

Vehicle

On July 12, 2022, the Company executed a non-cancellable operating lease for a vehicle with the lease commencing on July 12, 2022 for a three-year term. The Company paid $10,000 at the execution of the lease which included $1,793 as first month payment, and $8,207 as vehicle registration, capitalized cost reduction and other handling fees. The Company recorded rent expenses of $6,063 and $18,190 for the three months and nine months ended December 31, 2024 and $6,063 and $18,190 for the three months and nine months ended December 31, 2023. The lease expires on July 11, 2025.

Supplemental balance sheet information related to the vehicle lease is as follows as of December 31, 2024:

Operating Lease
Right-of-use asset, net	$	11,760
Current lease liabilities	$	10,392
Non-current lease liabilities		-
Total operating lease liabilities	$	10,392
Weighted average remaining lease term (years)		0.42
Weighted average discount rate per annum		12	%

As the lease does not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payment, which is reflective of the specific term of the lease.

Anticipated future costs are as follows:

For the years ending	Vehicle
March 31, 2025 (remaining)	$	5,379
March 31, 2026		5,380
Total lease payments		10,759
Less: imputed interest		(367	)
Present value of lease liabilities	$	10,392

Office Lease – J Plaza

On April 13, 2023, the Company executed a non-cancellable office space in a retail shopping center, for a monthly base rent of $2,196 and monthly common area maintenance charges of $1,531. The lease commenced on April 13, 2023 and extends for a term of three years and two months. The Company has an option to extend the lease for a period of 36 months after completion of the initial lease term. The Company has not included the extension period in calculating the present value of the lease. The rent is payable on the first day of each month, commencing either (1) opening of the business after tenant improvements, or (2) sixty days after the lease execution date. The Company made a payment of $8,119 of one-month rent and a security deposit of two months base rent of $4,391.

The Company recorded rent expense including common area maintenance of $11,359 and $34,077 for the three months and nine months ended December 31, 2024 and $11,359 and $34,077 for the three months and nine months ended December 31, 2023, respectively.

BLUEONE CARD, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Unaudited)

Supplemental balance sheet information related to the office lease is as follows as of December 31, 2024:

Operating Lease
Right-of-use asset, net	$	35,011
Current lease liabilities	$	24,557
Non-current lease liabilities		11,308
Total operating lease liabilities	$	35,865
Weighted average remaining lease term (years)		1.33
Weighted average discount rate per annum		12	%

As the lease does not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payment, which is reflective of the specific term of the lease.

Anticipated future costs are as follows:

For the years ending	Office Lease
March 31, 2025 (remaining)	$	6,786
March 31, 2026		27,755
March 31, 2027		4,660
Total lease payments		39,201
Less: imputed interest		(3,336	)
Present value of lease liabilities	$	35,865

Office Leases - Others

On August 27, 2020, the Company formally executed a month-to-month cancellable operating lease for leasing office space in an executive suite, commencing on September 1, 2020 for $259 per month. The Company paid a security deposit of $259 on September 7, 2020. The monthly rent increased to $279 effective January 1, 2021 and then to $289 effective October 1, 2022. The Company has recorded rent expenses of $867 and $2,601 for the three months and nine months ended December 31, 2024 and $867 and $2,601 for the three months and nine months ended December 31, 2023, respectively.

On October 26, 2020, the Company executed a non-cancellable operating lease agreement for its principal office for a monthly rent of $5,500, with the lease commencing on November 1, 2020 for a period of 12 months. The Company paid a security deposit of $5,500 on October 28, 2020. On November 25, 2021, the Company executed a month-to-month lease for this office facility at a monthly rental of $6,500. The Company has recorded rent expenses of $19,500 and $58,500 for the three months and nine months ended December 31, 2024 and $19,500 and $58,500 for the three months and nine months ended December 31, 2023, respectively.

The Company has recorded total rent expense for all above leases of $37,789 and $113,146 for the three months and nine months ended December 31, 2024 and $37,792 and $113,371 for the three months and nine months ended December 31, 2023, respectively.

The Company has considered the provisions of ASC 842 Topic 842 “Leases”. The Company has elected not to recognize lease assets and lease liabilities for leases with a term of 12 months or less, as it is permitted to make an accounting policy election. The Company records the rent expense on a straight-line basis ratable over the term of the lease.

Employment Agreement

On December 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with its President, CEO, Secretary, and Chairman (the “Officer”). The initial term of the Agreement is for three years and, if written notice is not provided within 90 days of the termination of each term, the term is automatically extended for an additional one-year term. The Agreement may be terminated by either party upon 90 days’ prior written notice. Whether the Agreement is terminated without “Cause,” for “Good Reason,” or for “Cause,” as defined in the Agreement, determines what compensation is owed and when. There is also a 30-day cure period for any termination for “Cause,” as defined in the Agreement. The Agreement contains confidentiality, non-compete, and non-solicitation provisions. Pursuant to the terms of Agreement, Mr. Koh is entitled to bonuses, reimbursement of expenses, a vehicle allowance, four weeks of paid vacation, and other incentives. The Agreement does provide for payments to be made as a result of any “Change in Control,” as defined in the agreement.

Pursuant to the Agreement, the Officer is entitled to an annual base salary of $150,000 and that amount is subject to an automatic 10% annual increase on the anniversary date (See Note 7).

BLUEONE CARD, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Unaudited)

Reseller Agreement with Expanse Financial Technologies, Inc. (“ExpanseFT”)

Effective February 27, 2024, the Company entered into an Authorized Reseller Agreement (the “Reseller Agreement”) with ExpanseFT (the “Program Manager”) pursuant to which the Company 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 does not provide exclusivity and there are no volume sales requirements pertaining to our reselling efforts.

The term of the Reseller Agreement is for five (5) years. The Reseller Agreement is renewable by mutual consent of each of the parties for two-year terms unless either party provides written notice to the other party at least 180 days prior to 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 30 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. The Program Manager shall provide us with prepaid debit and gift cards of requested quantity, create a range of prepaid debit accounts, using banking identification numbers provided to the Program Manager by our issuing bank and produce and deliver plastic card production tape media, including personal identification number (PIN) generation for the range of created prepaid debit accounts. Upon the first loading of value to a prepaid debit account, the Program Manager will create and activate a cardholder account on the Program Manager’s system and create linkage between the cardholder account on ExpanseFT system and our cardholder aggregate settlement account at our issuing bank or another bank.

The Company agreed to pay for all new programming outside the scope listed in this agreement such as but not limited to mobile apps, websites back office and the integrations with the sponsoring banks and processors as we go. The Company agreed to pay a one-time commitment fee of $60,000 to initiate the process to establish one banking identification number, including the program setup, integration, API connection and implementation process required to bring the program live. On March 1, 2024, we made a non-refundable payment of $42,500 recorded as Research and Development expense for the one-time fee for program implementation to the Program Manager towards implementation and customization fees for our program. The Company has a commitment to pay an annual due diligence fee of $5,000 per card program to the Program Manager once the program takes into effect. In addition, the Company is obligated to pay a minimum monthly program management fee to the Program Manager as follows:

Months 0-3	$	-
Months 4 – 12		5,000
Year 2		10,000
Year 3 and thereafter		15,000

Legal Costs and Contingencies

In the normal course of business, the Company incurs costs to hiring and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received.

If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. The Company was not aware of any loss contingencies as of December 31, 2024.

BLUEONE CARD, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Unaudited)