COMMITMENTS AND CONTINGENCIES

9 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 7 – 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	$	33,508	$	59,696	$	93,204
Current lease liabilities	$	19,013	$	24,246	$	43,259
Non-current lease liabilities		10,392		35,865		46,257
Total operating lease liabilities	$	29,405	$	60,111	$	89,516

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 expense of $6,063 and $18,190 for the three months and nine months ended December 31, 2023 and $6,063 and $12,127 for the three months and nine months ended December 31, 2022. The lease expires on July 11, 2025.

Supplemental balance sheet information related to the lease is as follows as of December 31, 2023:

Operating Lease
Right-of-use asset, net	$	33,508
Current lease liabilities	$	19,013
Non-current lease liabilities		10,392
Total operating lease liabilities	$	29,405
Weighted average remaining lease term (years)		1.42
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, 2024 (remaining)	$	5,379
March 31, 2025		21,518
March 31, 2026		5,380
Total lease payments		32,277
Less: imputed interest		(2,872	)
Present value of lease liabilities	$	29,405

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, 2023.

Supplemental balance sheet information related to the lease is as follows as of December 31, 2023:

Operating Lease
Right-of-use asset, net	$	59,696
Current lease liabilities	$	24,246
Non-current lease liabilities		35,865
Total operating lease liabilities	$	60,111
Weighted average remaining lease term (years)		2.58
Weighted average discount rate per annum		12	%

As the lease do 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.

BLUEONE CARD, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

December 31, 2023

(Unaudited)

Anticipated future costs are as follows:

For the years ending	Office Lease
March 31, 2024 (remaining)	$	10,981
March 31, 2025		26,947
March 31, 2026		27,755
March 31, 2027		4,658
Total lease payments		70,341
Less: imputed interest		(10,230	)
Present value of lease liabilities	$	60,111

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 expense of $867 and $2,601 for the three months and nine months ended December 31, 2023 and $867 and $2,541 for the same comparable periods of 2022, 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 expense of $19,500 and $58,500 for the three months and nine months ended December 31, 2023 and $19,500 and $58,500 for the same comparable period in 2022, respectively.

The Company has recorded total rent expense of $37,792 and $113,371 for the three months and nine months ended December 31, 2023 and $26,430 and $73,168 for the same comparable period of 2022, 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.

As a bonus for entering into the agreement, the Company issued 1,000,000 shares of its common stock to its Officer in December 2020 and, in the event that the Agreement is terminated prior to one year from the date of the Agreement, the Officer is obligated to return the shares to the Company. The common stock issued to the officer vested in December 2021. 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 6).

Service Agreement with EndlessOne Global Inc. (“E1G”)

The Company entered into a Service Agreement with E1G on September 1, 2020 whereby, E1G provided data processing, transaction processing and related services for its cardholders, mobile apps, website’s back office and integration services with sponsoring banks and processors. The Service Agreement required a one-time fee of $250,000 to initiate the process to establish the banking identification number, including the program setup, integration and API connection and implementation process required to bring the program live. The Company has paid E1G $551,683 and $145,892 for the internal-use software development as of December 31, 2023 and March 31, 2023, respectively.

Legal Costs and Contingencies

In the normal course of business, the Company incurs costs to hire 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, 2023.

BLUEONE CARD, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

December 31, 2023

(Unaudited)