As filed with the Securities and Exchange Commission on , 2021
Registration No.: ____
United States
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
BLUEONE CARD, INC.
(Exact name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
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____________________________
4695 MacArthur Court
Suite 1100
Newport Beach, CA92660
(800)210-9755
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)
James Koh, President
4695 MacArthur Court
Suite 1100
Newport Beach, CA 92660
(800) 210-9755
(Name, address, including zip code, and telephone number
including area code, of agent for service)
Copies to:
Brian Higley, Esq.
Business Legal Advisors, LLC
14888 Auburn Sky Drive
Draper, UT 84020
(801) 634-19844
brian@businesslegaladvisor.com
Approximate date of commencement of proposed sale to the public: As soon as practicable From time to time after this Registration Statement becomes effective.
If any of the securities being registered on this Formform are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. Θ
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If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☐ |
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | Amount to be registered(1)(3) | Proposed maximum offering price per unit (2) | Proposed maximum aggregate offering price(2) | Amount of registration fee |
Common stock, $0.001 par value | 1,750,000 | $0.05 | $87,500 | $18 |
Calculation of 1933 solely for the purpose of computing the amount of the registration fee, based on the price per share paid by the selling stockholders named herein in connection with their acquisition from the issuer of the securities being registered in the in the issuer’s recent private placement of common stock, which was consummated at a price per share of $0.02 in March 2010.3. Represents shares of the Registrant’s common stock being registered for resale that have been issued to the selling stockholders named in this registration statement.
Registration Fee
Title of Each Class of Securities to be Registered | Amount to be Registered(1) | Proposed Maximum Offering Price Per Share(2) | Proposed Maximum Aggregate Offering Price(2) | Amount of Registration Fee(3) | ||||||||||||
Common Stock, $0.0001 par value | 948,992 | $ | 0.50 | $ | 474,496 | $ | 51.77 |
(1) | Pursuant to Rule 416(a) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement shall also cover any additional shares of the registrant’s common stock that become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the number of the registrant’s outstanding shares of common stock. | |
(2) | Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act. This is not any indication of the price at which shares may be sold hereunder, which is expected to be determined at the market for sales by selling shareholders. | |
(3) | Calculated pursuant to Rule 457(o) under the Securities Act based on the proposed maximum aggregate offering price. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.
PROSPECTUS
Subject to completion, dated September 13 , 2010
AVENUE SOUTH LTD.
1,750,000 Shares of Common Stock
This prospectus relates to 1,750,000 shares of common stock of Avenue South Ltd. that may be sold from time to time by the selling stockholders named in this prospectus.
We will not receive any proceeds from the sales by the selling stockholders.
Our common stock is presently not traded on any market or securities exchange. The 1,750,000 shares of our common stock will be sold by the selling stockholders at a fixed price of $0.05 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with The Financial Industry Regulatory Authority, or FINRA, which operates the OTC Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling stockholders.SUBJECT TO COMPLETION, DATED , 2021
Any participating broker-dealers and any selling stockholders who are affiliates of broker-dealers may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended, or the Securities Act, and any commissions or discounts given to any such broker-dealer or affiliates of a broker-dealer may be regarded as underwriting commissions or discounts under the Securities Act. The selling stockholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute their common stock.
Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 7 to read about factors you should consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this Prospectus is , 2010.
The information in this preliminary prospectus is not complete and may be changed. These securitiesWe may not be soldsell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it iswe are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
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You should only rely onPROSPECTUS
BlueOne Card, Inc.
948,992 Shares of Common Stock
This prospectus relates to the information contained in this prospectus. We have not, andresale by the selling stockholders have not, authorized any other personof up to provide you with different information. This prospectus948,992 shares of our common stock. Each of the selling stockholders received his, her, or its shares in private exempt sales from November 6, 2019 to August 26, 2021.
Our common stock is notquoted on the OTC Pink under the symbol, “BCRD.”
Until such time that our common stock is listed for quotation on an offer to sell, norestablished public trading market (including the OTCQB), the shares offered by the selling stockholders will be sold at a fixed price of $0.50 per share. As of and after such time (if ever) that our Common Stock is it seekingquoted on an offer to buy, these securities in any state whereestablished public trading market (including the offer or sale is not permitted. The information inOTCQB), the shares offered under this prospectus is accurate onlyby the selling stockholders may be sold on the public market, in negotiated transactions with a broker-dealer or market maker as principal or agent or in privately negotiated transactions not involving a broker-dealer, and the prices at which the selling stockholders may sell the shares may be determined by the prevailing market price of the date on the front cover, but the information may have changed since that date.
The items in the following summary are described in more detail later in this prospectus. This summary provides an overview of selected information and does not contain all the information you should consider. Therefore, you should also read the more detailed information set out in this prospectus, including the financial statements, the notes thereto and matters set forth under “Risk Factors.”
The Company
Overview
We are a retailer of domestic distinctive art reproductions, collectibles and home décor items for sale in the United States and for export sales. We sell through our website www.avenuesouth.com and through an informal relationship with a home furnishing distributor in Hong Kong. We do not plan to occupy any physical stores or outlets or hold any inventory. Upon receiving sales orders from our customers, our suppliers will drop-ship the products we buy from them, directly to our customers. We believe that the products we sell are relatively unique because they are not readily available at many retail outlets. We feel that we have a strong platform for selling our type of products on the internet and we believe there are significant opportunities for us to sell our products outside the United States.
We acquire our product inventory from approximately 15 wholesale vendors all located in the United States. We do not manufacture any of our own products. We have not entered into any formal supply agreements with these vendors. We are required to pay in full for product inventory purchased from these vendors, prior to them drop-shipping their inventory to our customer. Our retail customers are required to pre-pay for their sales orders.
We are a development stage company. For the year ended March 31, 2010 we sold $13,500 worth of our products, which constituted our entire inventory on handCommon Stock at the time to Crown Trend Trading Limited, our (“major customer”), a home furnishing distributor to various retail store outlets in Hong Kong, to whom we give 30 day payment terms. For the three months ended June 30, 2010 our revenues were $20,010, allof sale, may be different from the sale of our products to this major customer. Revenue for the month of July 2010 to our major customer will be approximately $10,000. We expect to see an increase in the demand for our products from our major customer in Hong Kong and potentially other customers. We will seek to broaden or further develop our relationship with our major customer by entering into a formal distribution agreement so that we may continue to distribute more of our products through them. We pre-pay allshipping and handling costs and we then charge back all these shipping and handling costs to our customers. Our customers have a 30 day right of return on the products we sell to them. We will also seek to develop relationships with other home furnishing distributors in the United States and Hong Kong in order to increase our products sales and distribution base.
Our Competitive Strengths
We believe that we have the following competitive strengths:
● Existing relationships with our wholesale suppliers;
● Robust website that features streamlined navigation;
● Distinct product inventory sourced by our President;
● A continuing presence in Hong Kong where our Vice President of Sales is marketing our products to the Hong Kong market;
● No storage costs;
● Personalized customer support from our President and Vice President Sales; and
● Low overhead costs.
Our Growth Strategy
We will implement the following strategic plans to take advantage of industry opportunities and our competitive strengths:
● We plan to develop relationships with home furnishing distributors in the U.S. and in Hong Kong that will help us increase our domestic and international sales.
● We plan to begin marketing our website and product inventory on the internet and through other marketing channels later in 2010 or in 2011.
● We plan to leverage the social and business network of Ms. Ngai, our Hong Kong based director, and our Hong Kong stockholder base to find new sales opportunities in Hong Kong. We believe we can increase our product sales to the Hong Kong market.
● We plan to diversify our product portfolio to satisfy a larger array of customer preferences.
Risk Factors
Our ability to successfully operate our business and achieve our goals and strategies is subject to numerous risks as discussed more fully in the section titled “Risk Factors,” including:
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Any of the above risks could materially and adversely affect our business, financial position and results of operations. An investment in our common stock involves risks. You should read and consider the information set forth in “Risk Factors” and all other information set forth in this prospectus before investing in our common stock.
Corporate Information
We were incorporated on July 6, 2007 (“successor inception date or “inception”) in the State of Nevada for the sole purpose of acquiring Avenue South, Inc. Avenue South, Inc. was incorporated on February 15, 2005 (“predecessor inception date”) in the State of North Carolina for the purpose of engaging in the business of online sales of imported and domestic distinctive art reproductions, collectibles and home décor items.
Our President, Irina Goldman, acquired Avenue South, Inc. on July 6, 2007, from David F. Ruppen, the former owner of Avenue South, Inc., for a cash purchase price of $10,000. Immediately thereafter, on the same day, July 6, 2007, Irina Goldman, our company and Avenue South, Inc. entered into a share exchange agreement, or (“Share Exchange Agreement”), pursuant to which Ms. Goldman exchanged her one share of Avenue South, Inc. for 2,000,000 shares of our company. Upon the consummation of the transactions contemplated by the Share Exchange Agreement, Irina Goldman became our sole stockholder and Avenue South, Inc. became our wholly-owned subsidiary.
Our principal office is located at 5 Victory Road, Suffern, NY. Our telephone number is (845) 548-0888.
We maintain a website at http://www.avenuesouth.com. Information available on our website is not incorporated by reference in and is not deemed a part of this prospectus.
Conventions Used in this Prospectus
In this prospectus, unless indicated otherwise, references to:
● “we,” “us,” “our” or the “Company” are to Avenue South Ltd. and our subsidiary, Avenue South, Inc., on a consolidated basis;
● “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China;
● “U.S. dollar,” “$” and “US$” are to the legal currency of the United States;
● “SEC” are toNeither the Securities and Exchange Commission;Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is ____________, 2021
● “Securities Act” are
EXPLANATORY NOTE
BlueOne Card, Inc. is filing this Registration Statement on Form S-1 (the “Registration Statement”) to register the resales of up to 948,992 shares of our common stock, par value $0.0001 per share, pursuant to the Securities Act of 1933, as amended and “Exchange Act” are to(the “Securities Act”). Unless otherwise mentioned or unless the Securities Exchange Act of 1934, as amended.
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The Offering
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Summary Financial Data
The following summary sets forth selected financial data for the periods and at the dates indicated. The financial data has been derived from our unaudited financial statements for the three months ended June 30, 2010 and June 30, 2009 and for our audited financial statements for each of the fiscal years ended March 31, 2010 and March 31, 2009. The information set forth below should be read in conjunction with, and is qualified in its entirety by reference to, our financial statements beginning on page F-1 of this prospectus and the information set forth in the section of this prospectus captioned "Management’s Discussion and Analysis of Financial Position and Results of Operations".
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Three Months Ended | Three Months Ended | Year Ended | Year Ended | |
June 30, 2010 | June 30, 2009 | March 31, 2010 | March 31, 2009 | |
Revenues | 20,010 | 0 | 13,500 | 417 |
Expenses | 17,063 | 697 | 12,292 | 8,190 |
Net Income (Loss) | 2,947 | (697) | 1,208 | (7,773) |
Net Loss per share | (0.00) | (0.00) | (0.00) | (0.00) |
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As of June 30, 2010 | As of March 31, 2010 | As of March 31, 2009 | |
Working Capital | 49,157 | 11,210 | 10,002 |
Total Assets | 161,367 | 123,420 | 12,237 |
Total Current Liabilities | 112,210 | 112,210 | 2,235 |
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An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information includedcontext requires otherwise, when used in this prospectus, before making an investment decision. If anyRegistration Statement, the terms “BlueOne Card,” “Company,” “we,” “us,” and “our” refer to BlueOne Card, Inc., a Nevada corporation.
FORWARD LOOKING STATEMENTS
This Registration Statement contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of the following risks actually occurs,historical fact, contained in this Registration Statement, including statements regarding our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
RISKS RELATED TO OUR BUSINESS
We do not have sufficient working capital to meet our cash requirements for the next 12 months and we are not certain that we will be able to secure the financing we need to meet those requirements. If we do not obtain the financing we need to satisfy our financial requirements, we may have to wind down our business and you may lose your entire investment.
As of June 30, 2010 we had $49,157 of working capital. We intend to meet our ongoing cash requirements of approximately $160,000 for the next 12 months through a combination of equity and debt financing from our principal stockholder and other investors. However, there can be no assurance that we will be able to secure such financing and our principal stockholder has not committed to provide additional financing to us and she may require the repayment of her loan to us. If financing is available, it may involve issuing securities which could be dilutive to holders of our capital stock. If we do not raise additional capital from conventional sources, such as our existing or new investors or commercial banks, it is likely that our growth will be restricted and we may be forced to scale back or curtail implementing our business plan and our business may fail. This lack of working capital does not enable us to run our operations and incur operating expenses such as salaries, rent expense and marketing costs, which other retail sales and wholesale sales distributors incur in operating their businesses, which puts us at a competitive disadvantage. If we do not have sufficient capital to fund our operations, you may lose your entire investment.
Because our auditors have issued a going concern opinion, there is substantial uncertainty we will continue operations in which case you could lose your investment.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next 12 months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.
From the inception of our Company (July 6, 2007, date of inception of the successor operations) until June 30, 2010, we only generated $34,220 in revenues and have incurred losses during that same period of $4,843. From the date of inception of our operating subsidiary (February 15, 2005, date of inception of our predecessor operations) to July 5, 2007) we only generated $10,787 in revenues and have incurred losses during the same period of $37,912. We expect to continue to incur losses into the future. There is no assurance ourstrategy, future operations, will result in any profit. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment. If our business operations expand and our operating expenses increase, our profit margins may decrease and we may not be able to develop into a profitable business in the future.
Our ability to achieve and maintain profitability and positive cash flow is dependent upon:
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Based upon current plans, we expect to incur operating losses in future periods because we will continue to be in the development stage and will be incurring expenses and not generating significant revenues. We cannot guarantee that we will be successful in generating significant revenues in the future. Failure to generate revenues which are greater than our expenses will result in the loss of all or a portion of your investment.
Changing consumer preferences will require periodic new product introduction. If we are unable to continually satisfy new consumer preferences, we may not generate any material level of revenues.
As a result of changing consumer preferences, many Internet websites are successfully marketed for a limited period of time. Even if our products become popular, there can be no assurance that any of our products will continue to be popular for a sustained period of time. Our success will be dependent upon our ability to develop new and improved product lines. Our failure to introduce new product lines and to achieve and sustain market acceptance could result in us being unable to continually meet consumer preferences and generate any material level of revenues.
We face intense competition now and if we are unable to successfully compete with our competitors we will not be able to achieve profitability.
The Internet home furnishing industry is highly competitive. Most of our competitors have longer operating histories, greater brand recognition, broader product lines and greater financial resources and advertising budgets than we do. Many of our competitors offer similar products or alternatives to our products. We may not be able to develop a more appealing online website than our competitors and we may not be able to otherwise compete effectively against our competitors.
Further, our competitors may be able to develop their markets more effectively, have significantly more products than us, may be able to sell their products on more favorable terms, and may be able to adopt more aggressive pricing than us. They may have longer operating histories, greater brand name recognition, larger customer bases and significantly greater financial, technical and marketing resources. In the event that we are unable to successfully compete with our competitors we will not be able to achieve profitability.
We face a difficult current retail environment and changing economic conditions that may further adversely affect consumer demand and spending, and as a result, adversely affect our financial condition.
Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects. Such uncertainty, as well as other variations in global economic conditions such as consumer confidence, rising fuel costs and slowing housing starts, may continue to cause inconsistent and unpredictable consumer spending habits. Many industry analysts believe the current home furnishings environment is as difficult as the industry has ever experienced. Should consumer demand for home furnishings continue at these current low levels for an extended period of time or further deteriorate, it will be difficult to achieve our financial goals and plans.
Our relationship with our major customer Crown Trend Trading Ltd. creates risks associated with a concentrated sales source.
We currently generate all of our net sales from our business with Crown Trend Trading Ltd., but we cannot be assured that Crown Trend Trading Ltd will continue to purchase from us. Several of our competitors are likely to pursue business opportunities with this customer and threaten our current position. If we fail to maintain this relationship, our sales will be significantly diminished. Even if we maintain our relationship, our sales concentration as a result of this relationship increases the potential impact to our business that could result from any changes in the economic terms of this relationship. Any change in the terms of our sales to this customer could have a material impact on our financial position, future revenues, projected costs, prospects, plans and resultsobjectives of operations. Further, to the extent Crown Trend Trading Ltd overall business or market share decreases, or does not increase as anticipated, we may be adversely impacted.
If we do not attract customers to our website on cost-effective terms, we will not make a profit, which ultimately will result in a cessation of operations.
Our success depends on our ability to attract retail customers to our website on cost-effective terms. Our strategy to attract customers to our website, which has not been formalized or implemented, includes viral marketing, the practice of generating "buzz" among Internet users in our products through the developing and maintaining weblogs or "blogs", online journals thatmanagement, are updated frequently and available to the public, postings on online communities such as Facebook, MySpace, Yahoo!(R) Groups and amateur websites such as YouTube.com, and other methods of getting Internet users to refer others to our website by e-mail or word of mouth; search engine optimization, marketing our website via search engines by purchasing sponsored placement in search results; and entering into affiliate marketing relationships with website providers to increase our access to Internet consumers. We expect to rely on word of mouth marketing as the primary source of traffic to our website, with search engine optimization and affiliate marketing as secondary sources. Our marketing strategy may not be enough to attract sufficient traffic to our website. If we do not attract customers to our website on cost-effective terms, we will not make a profit, which ultimately will result in a cessation of operations.
Our success depends on the continuing efforts of the members of our senior management and the loss of their services could result in a disruption of operations which could result in reduced revenues.
We have no employees and our future success depends heavily upon the continuing services of the members of our senior management team, in particular, our President and principal shareholder Irina Goldman, and our Vice President of Sales and Director Fung Chun Ngai. If one or both of these people are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, and our business may be disrupted and our financial condition and results of operations may be materially and adversely affected.
forward-looking statements. The loss of Ms. Ngai as our Director, Treasurer and Vice President of Sales may result in the loss of our major customer. Ms. Ngai does not have any business relationship with Crown Trend outside of our company’s sales to Crown Trend. Ms. Ngai, however, is our only employee or agent in Hong Kong and she is, and historically has been, responsible for maintaining our relationship with Crown Trend given her physical proximity to Crown Trend. Given that Ms. Ngai is physically located in Hong Kong and has been responsible for maintaining our relationship with Crown Trend and facilitating responses to sales inquires, sales returns and sales orders, the loss of her services could adversely affect our business relationship with Crown Trend and the service level provided to Crown Trend.
We do not currently maintain key person insurance on Ms. Goldman or Ms. Ngai.
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Our President and director has never been associated with a larger and profitable home furnishing company, which could adversely affect our ability to becoming profitable in the future.
Our President and director has never been associated with a larger profitable home furnishing company, and her lack of experience in operating a larger home furnishing company like ours could adversely affect our ability to successfully become profitable in the future.
Because our President, Irina Goldman, owns more than 50% of our outstanding shares, she will retain control of us and be able to decide who will be directors and you may not be able to elect any directors which could decrease the price and marketability of the shares.
Irina Goldman, our President and director, owns 2,450,000 shares of our common stock constituting approximately 58% of our outstanding common stock. As a result, Ms. Goldman will be able to elect all of our directors and control our operations. She will also be able to unilaterally decide major corporate actions such as mergers, acquisitions, future securities offerings, amendments to our charter and bylaws and other significant corporate events. Ms. Goldman’s unilateral control over us could decrease the price and marketability of our shares.
Our business depends on the development and maintenance of the Internet infrastructure. Outages and delays could reduce the level of Internet usage generally as well as the level of usage of our services and reduce our revenues.
The success of our services will depend largely on the development and maintenance of the Internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, and security, as well as timely development of complementary products, for providing reliable Internet access and services. The Internet has experienced, and is likely to continue to experience, significant growth in the numbers of users and amount of traffic. The Internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasing bandwidth requirements, or problems caused by “viruses,words “anticipate,” “worms,“believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “would,” “could,” “should,” “continue,” and similar programs may harm the performance of the Internet. The backbone computers of the Internet have been the targets of such programs. The Internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of Internet usage generally as well as the level of usage of our services and reduce our revenues.
Interruption or failure of our information technology and communications systems could impair our ability to effectively provide our products and services, which could damage our reputation and harm our operating results.
Our ability to provide our products and services depends on the continuing operation of our information technology and communications systems. Any damage to or failure of our systems could interrupt our service. Service interruptions could reduce our revenues and profits, and damage our name if our system is perceived to be unreliable. Our systemsexpressions are vulnerable to damage or interruption as a result of terrorist attacks, war, earthquakes, floods, fires, power loss, telecommunications failures, computer viruses, interruptions in access to our websites through the use of “denial of service” or similar attacks, hacking or other attempts to harm our systems, and similar events. Some of our systems are not fully redundant, and our disaster recovery planning does not account for all possible scenarios. The occurrence of a natural disaster or a closure of an internet data center by a third-party provider without adequate notice could result in lengthy service interruptions. Interruption or failure of our information technology and communications systems could impair our ability to effectively provide our products and services, which could damage our reputation and harm our operating results.
If our website contains undetected errors, we could lose the confidence of users, resulting in loss of customers and a reduction of revenue.
Our websites could contain undetected errors or “bugs” that could adversely affect the ability of our customers to order products through our website. The occurrence of errors may cause us to lose market share, damage our reputation and brand name, and reduce our revenues.
If the security measures that we use to protect our user’s personal information such as credit card numbers, are ineffective, our customers may lose their confidence in our websites and stop visiting it. This may result in a reduction in revenues and increase our operating expenses, which would prevent us from achieving profitability.
We use www.authorize.net for our website security. Any breach in our website security could expose us to a risk of loss or litigation and possible liability. We anticipate that we will rely on encryption and authentication technology licensed from third parties to provide secure transmission of confidential information. As a result of advances in computer capabilities, new discoveries in the field of cryptography or other developments, a compromise or breach of our security precautions may occur. A compromise in our proposed security could severely harm our business. A party who is able to circumvent our proposed security measures could misappropriate proprietary information, including customer credit card information, or cause interruptions in the operation of our website. We may be required to spend significant funds and other resources to protect against the threat of security breaches or to alleviate problems caused by these breaches. However, protection may not be available at a reasonable price, or at all. Concerns regarding the security of e-commerce and the privacy of users may also inhibit the growth of the Internet as a means of conducting commercial transactions. This may result in a reduction in revenues and increase our operating expenses, which would prevent us from achieving profitability.
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RISKS RELATED TO THE OWNERSHIP OF OUR STOCK
Our stock has not been listed on any public exchange, and no prediction can be made as to when, if ever, a public market for our common stock would develop.
To date, there has been no public market for our common stock. No prediction can be made as to when, if ever, a public market for our common stock will develop. There is no liquidity for shares distributed in this offering and investors may have difficulty in selling any shares acquired in the offering at prices they want. If a public market for the common stock does develop at a future time, sales of shares by stockholders of substantial amounts of our common stock in the public market could reduce the prevailing market price and could impair our future ability to raise capital through the sale of additional equity securities. The company is not listed on any public exchange and there are no market makers currently applying to handle the company’s stock.
We will likely conduct offerings of our equity securities in the future, in which case your proportionate interest will be diluted.
We completed a private placement offering of 1,750,000 shares of our common stock at a price of $0.02 per share to investors on March 28, 2010. Since our inception, we have relied on the proceeds of that private placement offering and stock sales to our principal stockholder and loans from our principal stockholder to fund our operations. We will likely be required to undertake additional equity offerings in the future to finance our current business. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, your percentage interest in us will be diluted.
Penny stock regulations under U.S. federal securities laws may adversely affect the ability of investors to resell their shares.
We anticipate that our common stock will be subject to the penny stock rules under the Securities Exchange Act of 1934. These rules regulate broker-dealer practices for transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00 per share. The penny stock rules require broker-dealers that derive more than five percent of their customer transaction revenues from transactions in penny stocks to deliver a standardized risk disclosure document that provides information about penny stocks, and the nature and level of risks in the penny stock market, to any non-institutional customer to whom the broker-dealer recommends a penny stock transaction. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction, the broker and/or dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The transaction costs associated with penny stocks are high, reducing the number of broker-dealers who may be willing to engage in the trading of our shares. These additional penny stock disclosure requirements are burdensome and may reduce all the trading activity in the market for our common stock. As long as the common stock is subject to the penny stock rules, holders of our common stock may find it more difficult to sell their shares.
Reporting requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act of 2002, including establishing and maintaining acceptable internal controls over financial reporting, are costly.
We presently do not have a business that produces significant revenues, however, the rules and regulations pursuant to the Exchange Act require a public company to provide periodic reports which will require that we engage legal, accounting and auditing services. The engagement of such services can be costly and we are likely to incur losses which may adversely affect our ability to continue as a going concern. Additionally, the Sarbanes-Oxley Act of 2002 will require that our company establish and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley Act of 2002 and the limited time that management will devote to our company may make it difficult for us to establish and maintain adequate internal controls over financial reporting. In the event that we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports or prevent fraud, which may harm our financial condition and result in loss of investor confidence and a decline in our share price.
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Our security holders may face significant restrictions on the resale of our securities due to state “blue sky” laws.
Each state has its own securities laws, often called “blue sky” laws, which (1) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration and (2) govern the reporting requirements for broker-dealers and stock brokers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. Also, the broker must be registered in that state. We do not know whether our securities will be registered, or exempt, under the laws of any states. A determination regarding registration will be made by the broker-dealers, if any, who agree to serve as the market-makers for our securities. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. Investors should consider the resale market for our securities to be limited. Security holders may be unable to resell their securities, or they may be unable to resell them without the significant expense of state registration or qualification.
We do not intend to pay dividends and there will be less ways in which you can make a gain on any investment in us.
We have never paid any cash or stock dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in us will need to come through appreciation of the stock’s price. There will be less ways in which you can make a gain on any investment in us.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Our Business.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” above. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements, reflectalthough not all forward-looking statements contain these identifying words.
We may not actually achieve the plans, intentions or expectations disclosed in our current views with respect to future eventsforward-looking statements, and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on theseour forward-looking statements. TheseActual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements include, among other things,we make. We have included important cautionary statements relating to:our goals and strategies;our future business development, financial condition andin this Registration Statement that we believe could cause actual results of operations;our expectations regarding demand for our products;our abilityor events to diversify our product base; andgeneral economic and business conditions indiffer materially from the United States and Hong Kong.
Also, forward-looking statements represent our estimates and assumptions only asthat we make. Our forward-looking statements do not reflect the potential impact of the date of this prospectus. any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this prospectusRegistration Statement and the documents that we reference in this prospectus, or that wehave filed as exhibits to the registration statement of which this prospectus is a part, completely andRegistration Statement with the understanding that our actual future results may be materially different from what we expect.
Except The forward-looking statements contained in this Registration Statement are made as required by law,of the date of this Registration Statement, and we do not assume noany obligation to update any forward-looking statements publicly,except as required by applicable law.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we have and will continue to file periodic reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the “SEC”). These periodic reports, proxy statements and other information are available for inspection and copying at the public reference room and website of the SEC referred to above. You may access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to updateSection 13(a) or 15(d) of the reasons actual results could differ materially from those anticipatedExchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We have not incorporated by reference into this prospectus the information contained in, any forward-looking statements, even if new information becomesor that can be accessed through, our website, and you should not consider it to be a part of this prospectus.
Our Internet website address is http://www.blueonecard.com. Information contained on the website does not constitute part of this Registration Statement. We have included our website address in this Registration Statement solely as an inactive textual reference. When this Registration Statement is effective, we will make available, inthrough a link to the future.SEC’s website, electronic copies of the materials we file with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
REGISTRATION STATEMENT ON FORM S-1
TABLE OF PROCEEDSCONTENTS
We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders. The selling stockholders will receive all of the net proceeds from the sales of common stock offered by them under this prospectus.
DETERMINATION OF OFFERING PRICE
The selling security holders will sell their shares at an initial offering price of $0.05 per share until a market for our common shares develops on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. There is no established public trading market for our stock and we determined the offering price of $0.05 based on our 2010 projected revenues. We projected $100,000 in revenue for the year ended March 31, 2011, and using an arbitrary multiple of 2 times our revenue, we calculated a valuation of the company of $200,000. Taking this valuation and dividing it by the 4,200,000 total shares outstanding in the company after the private placement, the per share valuation of the company is approximately $0.05 per share. We did not consider any other factors in determining the $0.05 share price. The number of securities that may be actually sold by a selling security holder will be determined by each selling security holder. The selling security holders are under no obligation to sell all or any portion of the securities offered, nor are the selling security holders obligated to sell such shares immediately under this Prospectus. A security holder may sell securities at any price depending on privately negotiated factors such as a security holder’s own cash requirements, or objective criteria of value such as the market value of our assets.
DILUTION
All of the 1,750,000 shares of our common stock to be sold by the selling security holders are currently issued and outstanding. Accordingly, they will not cause dilution to any of our existing stockholders. We will likely conduct new offerings of our equity securities in the future, in which case your proportionate ownership interest will be diluted as well.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
There is currently no established public trading market for our common stock. Our common stock is not listed on any securities exchange or on the OTC Bulletin Board, and there are no market makers for our common stock known to us. In addition, we are not aware of any trading transactions that have occurred between private parties since our common stock was issued.
We plan to identify a market maker who will be willing to apply for the quotation of our common stock on the OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurances that our shares will ever be traded on the OTC Bulletin Board, or, if traded, that a public market will materialize.
Approximate Number of Holders of Our Common Stock
As of July 1, 2010, there were 29 stockholders of record of our common stock, as reported by our transfer agent. In computing the number of holders of record, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single stockholder.
Dividends
We have never declared dividends or paid cash dividends. Our board of directors will make any future decisions regarding dividends. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the near future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
We have not authorized anyone to provide you with information different from that contained in this prospectus. The selling stockholders are a web-based retailer of importedoffering to sell, and domestic distinctive art reproductions, collectibles and home décor items. We sell our products through our website www.avenuesouth.com and through an informal relationship with our major customer, a home furnishing distributor in Hong Kong. We do not occupy any physical stores or outlets. We believe that the products we sell are relatively unique and will sell successfully through our website because they are not readily available at many retail outlets.
Recent Developments
On March 28, 2010, we completed or closed our private placement in which we issued and soldseeking offers to non U.S. persons under Regulation S of the Securities Act 1,750,000buy, shares of our common stock for an aggregate purchase priceonly in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of $35,000, or $0.02 per share. As a resultthe date of this private placement, we raised approximately $35,000 in gross proceeds, which left us with approximately $35,000 in net proceeds as we did not incurprospectus, regardless of the time of delivery of this prospectus or of any offering expenses.sale of common stock.
For investors outside the U.S.: We have not and the selling stockholders have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the U.S. You are required to inform yourselves about and to observe any restrictions relating to the offering of the shares of common stock and the distribution and possession of this prospectus outside of the U.S.
Unless otherwise mentioned or unless the context requires otherwise, when used in this Registration Statement, the terms “BlueOne Card,” “Company,” “we,” “us,” and “our” refer to BlueOne Card, Inc., a contractual obligation,Nevada corporation.
PROSPECTUS SUMMARY
The following summary highlights material information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the “Risk Factors” section, the financial statements and the notes to the financial statements.
History
BlueOne Card, Inc. (formerly known as “Avenue South Ltd.,” “TBSS International, Inc.,” or “Manneking Inc.”) was incorporated on July 6, 2007 under 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., and got engaged in gold mining and drilling and general construction.
On April 26, 2019, Corporate Compliance, LLC filed a re-application for custodianship pursuant to NRS 78.347. The Eighth Judicial District Court of Clark County, Nevada granted custodianship over TBSS International, Inc. to Corporate Compliance, LLC. On October 15, 2019, we changed our name to “Manneking Inc.,” and then to “BlueOne Card, Inc.” on June 30, 2020.
On October 15, 2019, we executed a 1 for 100 reverse stock-split. On June 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 a FINRA corporate action pursuant to FINRA Rule 6490 which was announced on the Daily List as of July 23, 2020.
We were a “Reporting Issuer” subject to the reporting requirements of Sections 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 on May 29, 2019 through the filing of a Form 15. On February 1, 2021, we filed a Registration Rights AgreementStatement on Form 10 registering our Common Stock and, on April 2, 2021, our Registration Statement became effective and we entered intoare currently subject to the reporting requirements of Sections 13 and 15(d) of the Exchange Act.
General Overview
BlueOne Card Inc., a Nevada corporation, through our relationship with our program manager, EndlessOne Global, Inc., a Nevada corporation (the “Program Manager”), is a reseller of an all-in-one prepaid, branded card 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.
On August 2, 2021, we sold our first set of 2,500 debit cards to a customer plus charged a one-time set up fee of $3,500, for a total cash consideration of $19,500 and recorded our first revenues since the commencement of our business plan.
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.1 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 the investorsProgram Manager, we will earn our revenues mostly through commissions derived from monthly fees charged to customers to the private placement on March 28, 2010,Program Manager provided by us for the issued general purpose reloadable prepaid card, reloading fees, ATM withdrawal fees, and card to registercard 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.
We are currently headquartered in Newport Beach, California.
The Offering
Common stock offered by selling stockholders: | Up to 948,992 outstanding shares of common stock. | |
Offering price: | $0.50 per share until our shares are quoted on an established public trading market (including the OTCQB) and, thereafter, at prevailing market prices or privately negotiated prices. | |
Common stock outstanding: | ||
Before offering | 9,952,075 | |
After offering | 9,952,075 | |
Use of proceeds: | We will not receive any proceeds from the sale of the common stock by the selling stockholders. | |
Market for Common Stock: | The Company’s Common Stock is quoted on the OTC Markets quotation service platform under the symbol “BCRD.” | |
Risk factors: | Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 2 of this prospectus for a discussion of factors you should consider before making a decision to invest in our securities. |
1https://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
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RISK FACTORS
Investment in our common stock has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our common stock soldcould go down. This means you could lose all or a part of your investment.
Risks Related to Our Business
Any reference to risks associates with the Program Manager are not the official stance of the Program Manager and should not be interpreted as such. All assertions pertaining to the Program Manager herein are reasonable assumptions of risks facing the Program Manager. As a reseller of the Program Manager’s prepaid, branded cards, our business is dependent upon the Program Manager.
A pandemic, epidemic or outbreak of an infectious disease in the markets in which we operate or that otherwise impacts our facilities and customers could adversely impact our business.
If a pandemic, epidemic, or outbreak of an infectious disease including the recent outbreak of respiratory illness caused by a novel coronavirus (COVID-19) first identified in Wuhan, Hubei Province, China, or other public health crisis were to affect our markets, facilities, our customers, or the Program Manager, our business could be adversely affected. Consequences of the coronavirus outbreak are resulting in disruptions in or restrictions on our ability to travel. If such an infectious disease broke out at our office, facilities or work sites or those of the Program Manager, our operations may be affected significantly, our productivity may be affected, and we may incur increased costs. If the persons and entities with whom we have contractual relationships, principally, the Program Manager, are affected by an outbreak of infectious disease, we may incur increased costs or our customers could experience complications with our products and services. If our subcontractors with whom it works were affected by an outbreak of infectious disease, our labour supply may be affected and we may incur increased labour costs. Further, an infectious outbreak may cause disruption to the U.S. and global economy, or the local economies of the markets in which we operate, increase costs associated with our business, affect job growth and consumer confidence, or cause economic changes that we cannot anticipate. Overall, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to our markets or our facilities is difficult to predict and could adversely impact our business. In response to the COVID-19 situation, federal, state and local governments (or other governments or bodies) are considering placing, or have placed, restrictions on travel and conducting or operating business activities. At this private placement. Upontime those restrictions are very fluid and evolving. We have been and will continue to be impacted by those restrictions. Given that the failure bytype, degree and length of such restrictions are not known at this time, we cannot predict the Companyoverall impact of such restrictions on us, our customers, our subcontractors, and others with whom we work or the overall economic environment. As such, the impact these restrictions may have on our financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact may be material. In addition, due to the speed with which the COVID-19 situation is developing and evolving, there is uncertainty around its ultimate impact on public health, business operations and the overall economy; therefore, the negative impact on our financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact may be material.
Our business is dependent upon our contractual relationship with EndlessOne Global, the Program Manager, and, it if the Reseller Agreement is terminated or if the Program Manager defaults on its contractual obligations or its business experiences difficulties, our business would likely fail.
We have entered into the Reseller Agreement with EndlessOne Global, Inc. pursuant to which we have agreed to be a reseller of the Program Manager’s prepaid, branded cards. At the time, our ability to generate revenues is completely dependent upon our ability to resell the Program Manager’s prepaid, branded cards to end customers. If we are unable to have success as a reseller, our business will likely fail. If the Registration Statement declared effective within 180 daysProgram Manager’s business or products and services experience difficulties, our business will likely fail.
The Reseller Agreement terminates 24 months from the date of the closingReseller Agreement, subject to one-year extensions and early termination. If the Reseller Agreement is terminated at any time and we are unable to engage a different program manager at terms similar or better than those in the Reseller Agreement, our business will likely fail.
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The Reseller Agreement does not grant us exclusivity as a reseller of our offering (September 27, 2010), the Company may be requiredProgram Manager’s products and services. In the event that the Program Manager engages others to issue additional sharesact as resellers of its common stock (valued at $0.02 per share)products and services, we may experience a decrease in our ability to each Subscribermake sales as liquidated damages. The penalty amount is equala reseller, which would likely have a material adverse impact on our business and may cause it to five percent of the subscription price paid by each subscriber for the first month starting September 27, 2010, if the Registration Statement is not declared effective by that date. The penalty amount equals an additional 87,500 total common shares that may be issued to all the investors for a one month delay and one percent of the subscription price paid in shares (valued at $0.02 per share) to each subscriber for every month thereafter. The maximum amount of liquidated damages due shall not exceed twenty five percent of the Subscription Price paid by the Subscribers (valued at $0.02 per share), which equals a potential maximum of 437,500 additional total common shares that may be issued to all subscribers.fail.
Principal Factors Affecting our Financial Performance
Our operating results may fluctuate in the future, which could cause our stock price to decline.
Our quarterly and annual results of operations may fluctuate in the future as a result of a variety of factors, many of which are primarilyoutside of our control. If our results of operations fall below the expectations of investors or any securities analysts who follow our Common Stock, the trading price of our Common Stock could decline substantially. Fluctuations in our quarterly or annual results of operations might result from a number of factors, including, but not limited to:
● | The unprecedented impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors and other stakeholders | |
● | the timing and volume of purchases and use of our products and services by our customers; | |
● | our ability to effectively sell our products through direct-to-consumer initiatives; | |
● | the timing and success of new product or service introductions by us or our competitors; | |
● | changes in the level of interchange rates that can be charged; | |
● | fluctuations in customer retention rates; | |
● | changes in the mix of products and services that we sell; | |
● | changes in the mix of retail distributors through which we sell our products and services; | |
● | the timing of commencement of new product development and initiatives, the timing of costs of existing product roll-outs and the length of time we must invest in those new products, channels or retail distributors before they generate material operating revenues; | |
● | changes in our or our competitors’ pricing policies or sales terms; | |
● | costs associated with significant changes in our risk policies and controls; | |
● | the amount and timing of costs related to the acquisition of complementary businesses; | |
● | the amount and timing of costs of any major litigation to which we are a party; | |
● | disruptions in the performance of our products and services, including interruptions in the services we provide to other businesses, and the associated financial impact thereof; | |
● | the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business, operations and infrastructure; | |
● | continued low interest rate environment or interest rate volatility; | |
● | accounting charges related to impairment of goodwill and other intangible assets; | |
● | our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market; | |
● | volatility in the trading price of our Common Stock, which may lead to higher or lower stock-based compensation expenses; and | |
● | changes in the political or regulatory environment affecting the banking or electronic payments industries. |
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If we are unable to find and retain distributors for the Program Manager’s prepaid, branded cards, our business will fail.
Through the Reseller Agreement with the Program Manager, we are a reseller of the Program Manager’s prepaid, branded cards. In order to generate revenues pursuant to the Reseller Agreement, we will need to either sell the cards directly to the end user or find distributors for the cards. Initially, we plan to target up to 7,000 liquor stores throughout the U.S. as distributors. In the event we are unable to make sales directly to end users or establish relationships with distributors, we will be unable to generate revenues and our business will fail.
The loss of operating revenues from our anticipated retail distributors would adversely affect business.
We expect that a significant portion of our operating revenues will be derived from revenues generated from the sales of the Program Manager’s prepaid, branded cards sold through distributors such as liquor stores, which we estimate will be our largest retail distributors. We expect that liquor stores will have a significant impact on our operating revenues in future periods. Once we have established distribution through liquor stores, it would be difficult to replace them and the operating revenues derived from products and services sold therein. Accordingly, the loss of liquor stores as a primary means of distribution would have a material adverse effect on our business and results of operations. In addition, any publicity associated with the loss of any of our distributors could harm our reputation, making it more difficult to attract and retain consumers and other distributors, and could lessen our negotiating power with our remaining and prospective distributors.
Our future success depends upon the active and effective promotion of our Program Manager’s products and services by retail distributors, but their interests and operational decisions might not always align with our interests.
Most of our operating revenues will be derived from commissions on the sales of our Program Manager’s products and services sold at the stores of our retail distributors, including liquor stores. Revenues from commissions depend on a number of factors outside our control and may vary from period to period. Because we will compete with many other providers of our Program Manager’s products and services, including competing prepaid cards, for placement and promotion of products in the stores of our prospective retail distributors, our success depends on our retail distributors and their willingness to promote our products and services successfully. In general, our contracts with these third parties will likely allow them to exercise significant discretion over the placement and promotion of our Program Manager’s products and services; which means that they could give higher priority to the products and services of other companies for a variety of reasons. Accordingly, losing the support of our retail distributors might limit or reduce the sales of our Program Manager’s products and services. Our operating revenues and operating expenses may also be negatively affected by operational decisions by our retail distributors. For example, if a retail distributor reduces shelf space for our Program Manager’s products or implements changes in its systems that disrupt the following factors:Our auditors have issued a going concern opinion. This meansintegration between its systems and ours, our resales could be reduced or decline and we may incur additional merchandising costs to ensure our Program Manager’s products are appropriately stocked. Even if our retail distributors actively and effectively promote our Program Manager’s products and services, there can be no assurance that there is substantial doubttheir efforts will maintain or result in growth of our operating revenues.
Due to the fact that we can continue as an ongoing business forour revenues are derived from fees from the next 12 months. resales of the Program Manager’s products and services, future revenue growth depends on our ability to retain and attract new long-term users of the Program Manager’s products.
Our ability to achieveincrease account usage and account holder retention and to attract new long-term users of our Program Manager’s products can have a significant impact on our operating revenues. We may be unable to generate increases in account usage, account holder retention or attract new long-term users of our Program Manager’s products for a number of reasons, including if our Program Manager is unable to maintain profitabilityits existing distribution channels, predict accurately consumer preferences or industry changes and positive cash flow is dependent upon:
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The industries in which we compete are highly competitive, which could adversely affect our results of operations.
The industries in which we compete are highly competitive and subject to rapid and significant changes. Due to our relationship with the Program Manager as a reseller of its prepaid, branded cards, we compete against companies and financial institutions across the retail banking, financial services, transaction processing, consumer technology and financial technology services industries and may compete with others in the market who may in the future provide offerings similar to those of the Program Manager, and, particularly, our Program Manager competes with vendors who may provide program management and other services though a platform similar to its Backend as a Service (“BaaS”) platform. These and other competitors in the banking and electronic payments industries are introducing innovative products and services that may compete with those of our Program Manager. We expect that this competition will continue as banking and electronic payments industries continue to evolve, particularly if non-traditional payments processors and other parties gain greater market share in these industries. If we are unable to differentiate our Program Manager’s products and platform from and successfully compete with those of our competitors, our business, results of operations and financial condition will be materially and adversely affected.
Many existing and potential competitors are entities substantially larger in size, more highly diversified in revenue and substantially more established with significantly more broadly known brand awareness than ours. As such, many of our competitors can leverage their size, robust networks, financial wherewithal, brand awareness, pricing power and technological assets to compete with us. We could also experience increased price competition as a result of new entrants offering free or low-cost alternatives to our Program Manager’s products and services. If this happens, we expect that the purchase and use of our Program Manager’s products and services would decline. If price competition materially intensifies, we may have to increase the incentives that we offer to our retail distributors and decrease the prices of our Program Manager’s products and services, any of which would likely adversely affect our results of operations.
Our long-term success depends on our ability to developcompete effectively against existing and continually updatepotential competitors that seek to provide banking and electronic payment products and services. If we fail to compete effectively against these competitors, our website;ourrevenues, results of operations, prospects for future growth and overall business could be materially and adversely affected.
The Program Manager may make significant investments in products and services that may not be successful.
Our prospects for growth depend on the Program Manager’s ability to procureinnovate by offering new, and maintainadding value to its existing product and service offerings and on commercially reasonable terms relationships with third parties from whom we acquire inventory;ourits ability to identifyeffectively commercialize such innovations. The Program Manager will continue to make investments in research, development, and pursue mediums throughmarketing for new products and services. Investments in new products and services are speculative. Commercial success depends on many factors, including innovativeness, price, the competitive environment and effective distribution and marketing. If customers do not perceive the Program Manager’s new offerings as providing significant value, they may fail to accept the Program Manager’s new products and services, which we willwould negatively impact our operating revenues.
The Program Manager’s business is dependent on the efficient and uninterrupted operation of computer network systems and data centers, including third party systems, and any disruption in the operations of these systems and data centers could materially and adversely affect our business.
The Program Manager’s ability to provide reliable service to its customers and other network participants depends on the efficient and uninterrupted operation of its computer network systems and data centers as well as those of our retail distributors, network acceptance members and third-party processors. The Program Manager’s business involves the movement of large sums of money, processing of large numbers of transactions and management of the data necessary to do both. Our success depends on the Program Manager’s account programs, including the Program Manager’s BaaS programs, as well as the Program Manager’s processing and settlement services, the efficient and error-free handling of the money that is collected, remitted or deposited in connection with the provision of the Program Manager’s products and services. The Program Manager relies on the ability of its employees, systems and processes and those of the banks that issue its cards, retail distributors, other business partners and third-party processors to process and facilitate these transactions in an efficient, uninterrupted and error-free manner. Their failure to do so could materially and adversely impact our operating revenues and results of operations.
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The Program Manager’s systems and the systems of third-party processors are susceptible to outages and interruptions due to fire, natural disaster, power loss, telecommunications failures, software or hardware defects, terrorist attacks and similar events. The Program Manager uses both internally developed and third-party systems, including cloud computing and storage systems, for its services and certain aspects of transaction processing. Interruptions in the Program Manager’s service may result for a number of reasons.
Any damage to, or failure of, the Program Manager’s processes or systems generally, or those of its vendors (including as a result of disruptions at the Program Manager’s third-party data center hosting facilities and cloud providers), or an improper action by its employees, agents or third-party vendors, could result in interruptions in its service, causing customers, retail distributors and other partners to become dissatisfied with the Program Manager’s products and services or obligate the Program Manager to issue credits or pay fines or other penalties to them. Sustained or repeated process or system failures could reduce the attractiveness of the Program Manager’s products and services, including its BaaS platform, and result in contract terminations, thereby reducing operating revenue and harming our results of operations. Further, negative publicity arising from these types of disruptions could be abledamaging to marketthe Program Manager’s and our products;
If the Program Manager is unable to keep pace with the rapid technological developments in its industry and the larger electronic payments industry necessary to continue providing its BaaS platform partners and cardholders with new and innovative products and services, the use of the Program Manager’s cards and other products and services could decline.
The electronic payments industry is subject to rapid and significant technological changes. We cannot predict the effect of technological changes on our business. The Program Manager relies, in part, on third parties for the development of, and access to, new technologies. We expect those new services and technologies applicable to our website whoindustry will continue to emerge, and these new services and technologies may be superior to, or render obsolete, the technologies we currently utilize through resale of the Program Manager’s products and services. Additionally, the Program Manager may make future investments in, or enter into strategic alliances to develop, new technologies and services or to implement infrastructure change to further its strategic objectives, strengthen its existing businesses and remain competitive. However, the Program Manager’s ability to transition to new services and technologies that it develops may be inhibited by a lack of industry-wide standards, by resistance from our retail distributors, its BaaS platform partners, third-party processors or consumers to these changes, or by the intellectual property rights of third parties. Since we are interesteda reseller of the Program Manager’s prepaid, branded cards, our future success will depend, in purchasingpart, on the Program Manager’s ability to develop new technologies and adapt to technological changes and evolving industry standards. These initiatives are inherently risky, and they may not be successful or may have an adverse effect on our products;business, financial condition and
Fraudulent and other illegal activity involving the Program Manager’s products and services could lead to reputational damage to us, reduce the use and acceptance of the Program Manager’s cards and reload network, and may adversely affect our financial position and results of operations.
Criminals are using increasingly sophisticated methods to engage in illegal activities using deposit account products (including prepaid cards), reload products, or customer information. Illegal activities involving the Program Manager’s products and services often include malicious social engineering schemes. Illegal activities may also include fraudulent payment or refund schemes and identity theft. The Program Manager relies upon third parties for transaction processing services, which subjects the Program Manager and its end customers to risks related to the vulnerabilities of those third parties. A single significant incident of fraud, or increases in the overall level of fraud, involving the Program Manager’s cards and other products and services, have in the past and could in the future result in reputational damage it and to us. Such damage could reduce the use and acceptance of the Program Manager’s cards and other products and services, cause retail distributors to cease doing business with us or lead to greater regulation that would increase the Program Manager’s compliance costs. Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines on the Program Manager, which could adversely affect our business, results of operations and financial condition.
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The Program Manager operates in a highly regulated environment, and failure by it, the banks that issue its cards, and the businesses that participate in it reloads network to comply with applicable laws and regulations could have an adverse effect on our business, financial position and results of operations.
The Program Manager operates in a highly regulated environment, and failure by it, the banks that issue its cards or the businesses that participate in it reloads network or other business partners to comply with the laws and regulations to which it is subject could negatively impact our business. The Program Manager is subject to state money transmission licensing requirements and a wide range of U.S. federal and other state laws and regulations. In particular, the Program Manager’s products and services are subject to an increasingly strict set of legal and regulatory requirements intended to protect consumers and to help detect and prevent money laundering, terrorist financing and other illicit activities. For example, the Program Manager is subject to the anti-money laundering reporting and recordkeeping requirements the Bank Secrecy Act (“BSA”), as amended by the PATRIOT Act. In addition, legal requirements relating to the collection, storage, handling, use, disclosure, transfer, and security of personal data continue to increase, along with enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations.
Many of these laws and regulations are evolving, can be unclear and inconsistent across various jurisdictions, and ensuring compliance with them is difficult and costly. Failure by the Program Manager or those businesses to comply with the laws and regulations to which they are or may become subject could result in fines, penalties or limitations on our ability to keep manageconduct our business, or federal or state actions, any of which could significantly harm the Program Manager’s and our reputation with consumers, banks that issue the Program Manager’s prepaid cards and regulators, and could materially and adversely affect our business, operating results and financial condition.
Changes in laws and regulations to which the Program Manager is subject, or to which they may become subject, may increase our costs of operation, decrease our operating revenues and disrupt our business.
The banking, financial technology, transaction processing service industries are highly regulated and, from time to time, the regulations affecting these industries, and the manner in which they are interpreted, are subject to change and legal action. Accordingly, changes in laws and regulations or the interpretation or enforcement thereof may occur that could increase our compliance and other costs of doing business, require significant systems redevelopment, or render the Program Manager’s products or services less profitable or obsolete, any of which could have an adverse effect on our results of operations. For example, the Program Manager could face more stringent anti-money laundering rules and regulations, as well as more stringent licensing rules and regulations, compliance with which could be expensive and time consuming. In addition, adverse rulings relating to the industries in which the Program Manager participates in the countries in which it and we operate could cause the Program Manager’s products and services to be subject to additional laws and regulations, which could make the Program Manager’s products and services, of which we are a reseller, less profitable.
If additional regulatory requirements were imposed on the sale of the Program Manager’s products and services, the requirements could lead to a loss of retail distributors, which, in turn, could materially and adversely impact our operations. Moreover, if the Program Manager’s products are adversely impacted by the interpretation or enforcement of these regulations or we or any of our retail distributors were unwilling or unable to make any such operational changes to comply with the interpretation or enforcement thereof, we would no longer be able to resell the Program Manager’s products and services through that noncompliant retail distributor, which could have a material adverse effect on our business, financial position and results of operations.
From time to time, international, U.S. federal and state legislators and regulatory authorities, including state attorneys general, increase their focus on the banking and consumer financial services industries and may propose and adopt new legislation that could result in significant adverse changes in the regulatory landscape for financial institutions and financial services companies.
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If new regulations or laws result in changes in the way the Program Manager is regulated, these regulations could expose the Program Manager to increased regulatory oversight, more burdensome regulation of its business, and increased litigation risk, each of which could increase the Program Manager’s costs which may decrease our operating revenues. Furthermore, limitations placed on fees we charge or the disclosures that must be provided with respect to the Program Manager’s products and services could increase our costs and maintain low overhead.may decrease our operating revenues.
Based upon current plans,Changes in rules or standards set by the payment networks, such as Visa and MasterCard, or changes in debit network fees or products or interchange rates, could adversely affect our business, financial position and results of operations.
The Program Manager is subject to association rules that could subject it to a variety of fines or penalties that may be levied by the card associations or networks for acts or omissions by the Program Manager or businesses that work with it, including card processors, such as MasterCard PTS. The termination of the card association registrations held by the Program Manager or any changes in card association or other debit network rules or standards, including interpretation and implementation of existing rules or standards, that increase the cost of doing business or limit the Program Manager’s ability to provide its products and services could have an adverse effect on our business, operating results and financial condition. In addition, from time to time, card associations may increase the fees that they charge, which could increase our operating expenses, reduce our profit margin and adversely affect our business, results of operations and financial condition.
Furthermore, we expect a substantial portion of our operating revenues to incurbe derived from interchange fees. The amount of interchange revenues that we earn is highly dependent on the interchange rates that the payment networks set and adjust from time to time.
The enactment of the Dodd-Frank Act required the Federal Reserve Board to implement regulations that have substantially limited interchange fees for many issuers. While the interchange rates that may be earned by us are exempt from the limitations imposed by the Dodd-Frank Act, there can be no assurance that future regulation or changes by the payment networks will not impact our interchange revenues substantially. If interchange rates decline, whether due to actions by the payment networks or future regulation, we would likely need to change our fee structure to offset the loss of interchange revenues. However, our ability to make these changes will be limited by the terms of our future contracts and other commercial factors, such as price competition. To the extent we increase the pricing of the Program Manager’s products and services, we might find it more difficult to acquire consumers and to maintain or grow card usage and customer retention, and we could suffer reputational damage and become subject to greater regulatory scrutiny. The Program Manager’s may also have to discontinue certain products or services. As a result, our total operating lossesrevenues, operating results, prospects for future growth and overall business could be materially and adversely affected.
The Program Manager receives important services from third-party vendors. Replacing them would be difficult and disruptive to its business.
Some services relating to the Program Manager’s business, including fraud management and other customer verification services, transaction processing and settlement, card production, and customer service, are outsourced to third-party vendors. It would be difficult to replace some of the Program Manager’s third-party vendors in future periods because we willa timely manner if they were unwilling or unable to provide the Program Manager with these services during the term of their agreements with us and our business and operations could be adversely affected.
Our business could suffer if there is a decline in the use of prepaid cards as a payment mechanism or there are adverse developments with respect to the prepaid financial services industry in general.
As the prepaid financial services industry evolves, consumers may find prepaid financial services to be less attractive than traditional or other financial services. Consumers might not use prepaid financial services for any number of reasons, including the general perception of our industry, new technologies and a decrease in our distribution partners’ willingness to sell these products as a result of a more challenging regulatory environment. If consumers do not continue or increase their usage of prepaid cards, including making changes in the way prepaid cards are loaded, our operating revenues may decline. Any projected growth for the industry may not occur or may occur more slowly than estimated.
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If consumer acceptance of prepaid financial services does not continue to bedevelop or develops more slowly than expected or if there is a shift in the development stagemix of payment forms, such as cash, credit cards, traditional debit cards and willprepaid cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations.
A data security breach could expose the Program Manager to liability and protracted and costly litigation, and could adversely affect its and our reputation and operating revenues.
The Program Manager and its retail distributors, network acceptance members, third-party processors and the merchants that accept the Program Manager’s cards receive, transmit and store confidential customer and other information in connection with the sale and use of the Program Manager’s products and services. The Program Manager’s encryption software and the other technologies the Program Manager uses to provide security for storage, processing and transmission of confidential customer and other information may not be incurring expenseseffective to protect against data security breaches by third parties. The risk of unauthorized circumvention of its security measures has been heightened by advances in computer capabilities and not generatingthe increasing sophistication of hackers. The Program Manager’s network acceptance members, other business partners, third-party processors and the merchants that accept the Program Manager’s cards also may experience similar security breaches involving the receipt, transmission and storage of the Program Manager’s confidential customer and other information. Improper access to the Program Manager or these third parties’ systems or databases could result in the theft, publication, deletion or modification of confidential customer and other information.
A data security breach of the systems on which sensitive cardholder or other customer or end-customer data and account information are stored could lead to fraudulent activity involving the Program Manager’s products and services, reputational damage and claims or regulatory actions against the Program Manager and possibly us. If we are sued in connection with any data security breach, we could be involved in protracted and costly litigation. If unsuccessful in defending that litigation, we might be forced to pay damages and/or change our business practices, any of which could have a material adverse effect on our operating revenues and profitability. The Program Manager would also likely have to pay (or indemnify the banks that issue our cards for) fines, penalties and/or other assessments imposed by Visa or MasterCard as a result of any data security breach. Further, a significant revenues.data security breach could lead to additional regulation, which could impose new and costly compliance obligations. In addition, a data security breach at one of the third-party banks that issue the Program Manager’s cards or at the Program Manager’s network acceptance members, other business partners, third-party processors or the merchants that accept the Program Manager’s cards could result in significant reputational harm to the Program Manager and, as a reseller of the Program Manager’s prepaid, branded cards, to us and cause the use and acceptance of the Program Manager’s cards or other products and services to decline, either of which could have a significant adverse impact on our operating revenues and future growth prospects.
Litigation or investigations could result in significant settlements, fines or penalties.
The Program Manager or we may be subject to securities class actions and other litigation or regulatory or judicial proceedings or investigations. The outcome of litigation and regulatory or judicial proceedings or investigations is difficult to predict. Plaintiffs or regulatory agencies or authorities in these matters may seek recovery of very large or indeterminate amounts, seek to have aspects of our business suspended or modified or seek to impose sanctions, including significant monetary fines. The monetary and other impact of these actions, litigations, proceedings or investigations may remain unknown for substantial periods of time. The cost to defend, settle or otherwise resolve these matters may be significant. Further, an unfavourable resolution of litigation, proceedings or investigations against us could have a material adverse effect on our business, operating results, or financial condition. If regulatory or judicial proceedings or investigations were to be initiated against the Program Manager or us by private or governmental entities, adverse publicity that may be associated with these proceedings or investigations could negatively impact our relationships with Crown Trend Trading Ltd.,retail distributors and decrease acceptance and use of, and loyalty to, the Program Manager’s products and related services, and could impact the price of our majorCommon Stock. In addition, such proceedings or investigations could increase the risk that we will be involved in litigation. The outcome of any such litigation is difficult to predict and the cost to defend, settle or otherwise resolve these matters may be significant. For the foregoing reasons, if regulatory or judicial proceedings or investigations were to be initiated against us by private or governmental entities, our business, results of operations and financial condition could be adversely affected or our stock price could decline.
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We may be unable to adequately protect our brand and third parties may allege that we are infringing their intellectual property rights.
The “BlueOne Card” brand is important to our business, and we plan to utilize trademark registrations and other means to protect it. Our business would be harmed if we were unable to protect our brand against infringement and its value was to decrease as a result.
The Program Manager may be unable to adequately protect its brand and its intellectual property rights related to its products and services and third parties may allege that it is infringing their intellectual property rights.
The Program Manager’s brands and marks are important to its business, and it utilizes trademark registrations and other means to protect them. The Program Manager’s business would be harmed if it was unable to protect its brand against infringement and its value was to decrease as a result.
The Program Manager relies on a combination of patent, trademark and copyright laws, trade secret protection and confidentiality and license agreements to protect the intellectual property rights related to the Program Manager’s products and services. The intellectual property rights of the Program Manager could be challenged, invalidated or circumvented.
The Program Manager may unknowingly violate the intellectual property or other proprietary rights of others and, thus, may be subject to claims by third parties. These assertions may increase over time as a result of growth and the general increase in the pace of patent claims assertions, particularly in the U.S. Because of the existence of a large number of patents in the mobile technology field, the secrecy of some pending patents, and the rapid rate of issuance of new patents, it is not economically practical or even possible to determine in advance whether a product or any of its elements infringes or will infringe on the patent rights of others. Regardless of the merit of these claims, the Program Manager may be required to devote significant time and resources to defending against these claims or to protecting and enforcing its own rights. The Program Manager might also be required to develop a non-infringing technology or enter into license agreements and there can be no assurance that licenses will be available on acceptable terms and conditions, if at all. Some of our intellectual property rights may not be protected by intellectual property laws, particularly in foreign jurisdictions. The loss of the Program Manager’s intellectual property or the inability to secure or enforce its intellectual property rights or to defend successfully against an infringement action could harm our business, results of operations, financial condition and prospects.
The Program Manager is exposed to losses from customer accounts.
Fraudulent activity involving the Program Manager’s products may lead to customer disputed transactions, for which the Program Manager may be liable under banking regulations and principal distributorpayment network rules. The Program Manager’s fraud detection and risk control mechanisms may not prevent all fraudulent or illegal activity. To the extent the Program Manager incurs losses from disputed transactions, our business, results of operations and financial condition could be materially and adversely affected.
Additionally, the Program Manager’s cardholders can incur charges in excess of the funds available in their accounts, and the Program Manager may become liable for these overdrafts. While the Program Manager declines authorization attempts for amounts that exceed the available balance in a cardholder’s account, the application of card association rules, the timing of the settlement of transactions and the assessment of the card’s monthly maintenance fee, among other things, can result in overdrawn accounts.
Maintenance fee assessment overdrafts occur as a result of the Program Manager charging a cardholder, pursuant to the card’s terms and conditions, the monthly maintenance fee at thisa time when he or she does not have sufficient funds in his or her account. The Program Manager’s remaining overdraft exposure arises primarily from late-posting. A late-post occurs when a merchant posts a transaction within a payment network-permitted timeframe but subsequent to sellthe Program Manager’s release of the authorization for that transaction, as permitted by card association rules. Under card association rules, the Program Manager may be liable for the amount of the transaction even if the cardholder has made additional purchases in the intervening period and funds are no longer available on the card at the time the transaction is posted.
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Economic, political and other conditions may adversely affect trends in consumer spending.
The electronic payments industry, including the prepaid financial services segment within that industry, depends heavily upon the overall level of consumer spending. If conditions in the U.S. become uncertain or deteriorate, we may experience a reduction in the number of our product inventory.accounts that are purchased or reloaded, the number of transactions involving the Program Manager’s prepaid, branded cards and the use of our reload network and related services. A sustained reduction in the use of the Program Manager’s products and related services, either as a result of a general reduction in consumer spending or as a result of a disproportionate reduction in the use of card-based payment systems, would materially harm our business, results of operations and financial condition.
We must be able to operate and scale our technology effectively.
The Program Manager’s ability to continue to provide its products and services to network participants, as well as to enhance its existing products and services and offer new products and services, is dependent on its information technology systems. If the Program Manager is unable to manage and scale the technology associated with its business effectively, it could experience increased costs, reductions in system availability and losses of its network participants. Any failure of our systems in scalability and functionality would adversely impact our business, financial condition and results of operations.
We are highly dependent on the services of our key executive, the loss of whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.
We are highly dependent on our management, specifically James Koh. We have an employment agreement in place with Mr. Koh. If we lose key employees, our business may suffer. Furthermore, our future success will also depend, in part, on the continued service of our management personnel and our ability to identify, hire, and retain additional key personnel. We do not havecarry “key-man” life insurance on the lives of any formal relationship with them and they may in their sole discretion and without any penalty cease being our distributor at any time. If they cease the distribution of our products then our sole source of distribution willexecutives, employees or advisors. We experience intense competition for qualified personnel and may be through our website, which has not generated any significant revenueunable to date.
Our future our sales are dependentsuccess depends on our ability to attract, retail customersintegrate, retain and incentivize key personnel.
Our future success will depend, to a significant extent, on our website on cost-effective terms. Our strategyability to attract, customers tointegrate, retain and recognize key personnel, namely our website, which has not been formalized or implemented, includes viralmanagement team and experienced sales, marketing the practice of generating "buzz" among Internet users in our products through the developing and maintaining weblogs or "blogs", online journals that are updated frequentlyprogram and available to the public, postings on online communities such as Facebook, MySpace, Yahoo!(R) Groupstechnology development personnel. Replacing departing key personnel can involve organizational disruption and amateur websites such as YouTube.com, and other methods of getting Internet users to refer others to our website by e-mail or word of mouth; search engine optimization, marketing our website via search engines by purchasing sponsored placement in search results; and entering into affiliate marketing relationships with website providers to increase our access to Internet consumers. We expect to rely on word of mouth marketing as the primary source of traffic to our website, with search engine optimization and affiliate marketing as secondary sources.
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We might require additional capital to support our business in the future, and this capital might not be available on acceptable terms, or at all.
If our unrestricted cash and cash equivalents balances and any cash generated from operations are not sufficient to meet our future cash requirements, we will need to access additional capital to fund our operations. We may also need to raise additional capital to take advantage of new business or acquisition opportunities. We may seek to raise capital by, among other things:
● | issuing additional shares of our Common Stock or other equity securities; | |
● | issuing convertible or other debt securities; and | |
● | borrowing funds under a credit facility. |
We may not be able to raise needed cash in a timely basis on terms acceptable to us or at all. Financings, if available, may be on terms that are dilutive or potentially dilutive to our stockholders. The holders of new securities may also receive rights, preferences or privileges that are senior to those of existing holders of our Common Stock. In addition, if we were to raise cash through a debt financing, the terms of the financing might impose additional conditions or restrictions on our operations that could adversely affect our business. If we require new sources of financing but they are insufficient or unavailable, we would be required to modify our operating plans to take into account the limitations of available funding, which would harm our ability to maintain or grow our business.
The occurrence of catastrophic events could damage our facilities or the facilities of third parties on which we depend, which could force us to curtail our operations.
We and some of the third-party service providers on which we depend for various support functions, such as customer service and card processing, are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism and similar unforeseen events beyond our control. Our principal offices, for example, are situated in southern California near known earthquake fault zones. If any catastrophic event were to occur, our ability to operate our business could be seriously impaired. In addition, we might not have adequate insurance to cover our losses resulting from catastrophic events or other significant business interruptions. Any significant losses that are not recoverable under our insurance policies, as well as the damage to, or interruption of, our infrastructure and processes, could seriously impair our business and financial condition.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. If we are unable to maintain adequate internal control over financial reporting, we might be unable to report our financial information on a timely basis and might suffer adverse regulatory consequences. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. We have in the past and may in the future discover areas of our internal financial and accounting controls and procedures that need improvement. Our internal control over financial reporting will not prevent or detect all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company will be detected. If we are unable to maintain proper and effective internal controls, we may not be able to produce accurate financial statements on a timely basis, which could adversely affect our ability to operate our business and could result in regulatory action, and could require us to restate, our financial statements. Any such restatement could result in a loss of public confidence in the reliability of our financial statements and sanctions imposed on us by the SEC.
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Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect our financial condition and results of operations.
Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and results of operations and are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain. If those assumptions, estimates or judgments were incorrectly made, we could be required to correct and restate prior period financial statements. Accounting standard-setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC and banking regulators) may also amend or even reverse their previous interpretations or positions on how various standards should be applied. These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the need to revise and republish prior period financial statements.
Risks Related to Our Financial Condition
There are doubts about our ability to continue as a going concern.
We are a development stage enterprise and have recently commenced planned principal operations. We have not entered into any formal supply agreements with these vendors. We are required to pay in full for product inventory purchased from these vendors upon delivery. If the prices charged by these vendors increaseearned significant revenues and we are not able to pass on the increased price to our customers, then our margins will be reduced and this will affect our potential for future profitability.
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Resultshave incurred losses of Operations$108,782 for the three months ended June 30, 20102021 and June 30, 2009 and from July 6, 2007 (successor inception)$275,892 for the fiscal year ended March 31, 2021. These factors raise substantial doubt about our ability to June 30, 2010.continue as a going concern.
Revenues
We generated revenues of $34,220There can be no assurance that sufficient funds required during the periodnext year or thereafter will be generated from operations or that funds will be available from external sources, such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations, or to raise capital from external sources would force us to substantially curtail or cease operations and would, therefore, have a material adverse effect on our inceptionbusiness. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on our existing stockholders.
We intend to overcome the circumstances that impact our ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. We anticipate raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support our business operations; however, we may not have commitments from third parties for a sufficient amount of additional capital. We cannot be certain that any such financing will be available on acceptable terms, or at all, and our failure to raise capital, when needed, could limit our ability to continue our operations. Our ability to obtain additional funding will determine our ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favourable terms would have a material adverse effect on our financial performance, results of operations, and stock price and require us to curtail or cease operations, sell off our assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of our Common Stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary, to raise additional funds, and may require that we relinquish valuable rights.
Pandemics, natural disasters and geo-political events could adversely affect our business.
Pandemics, natural disasters, including hurricanes, cyclones, typhoons, tropical storms, floods, earthquakes and tsunamis, weather conditions, including winter storms, droughts and tornadoes, whether as a result of climate change or otherwise, and geo-political events, including civil unrest or terrorist attacks, that affect us, or other service providers, could adversely affect our business.
COVID-19 was declared a pandemic by the World Health Organization in March 2020. To date, this pandemic has affected nearly all regions around the world. In the United States, businesses as well as federal, state and local governments implemented significant actions to mitigate this public health crisis. While we cannot predict the duration or scope of the COVID-19 pandemic, it may negatively impact our business and such impact could be material to our financial results, condition and outlook related to:
● | reduction or volatility in demand for our products, which may be caused by, among other things, reduced online traffic and changes in consumer spending behaviours (e.g. consumer confidence in general macroeconomic conditions and a decrease in consumer spending); |
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● | disruption to our operations or the operations of our suppliers, through the effects of business and facilities closures, worker sickness and COVID-19 related inability to work, social, economic, political or labour instability in affected areas, transportation delays, travel restrictions and changes in operating procedures, including for additional cleaning and safety protocols; | |
● | impacts to our third-party marketplaces’ ability to operate or manage increases in their operating costs and other supply chain effects that may have an adverse effect on our ability to meet consumer demand and achieve cost targets; | |
● | increased volatility or significant disruption of global financial markets due in part to the COVID-19 pandemic, which could have a negative impact on our ability to access capital markets and other funding sources, on acceptable terms or at all and impede our ability to comply with debt covenants; and | |
● | the further spread of COVID-19, and the requirements to take action to mitigate the spread of the pandemic, will impact our ability to carry out our business as usual and may materially adversely impact global economic conditions, our business, results of operations, cash flows and financial condition. |
Our management has a limited experience operating a public company and is subject to the risks commonly encountered by early-stage companies.
Although our management has experience in operating small companies, our management has not had to manage expansion while being a public company. Many investors may treat us as an early-stage company. In addition, our management has not overseen a company with large growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. These risks include:
● | risks that we may not have sufficient capital to achieve our growth strategy; | |
● | risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements; | |
● | risks that our growth strategy may not be successful; and | |
● | risks those fluctuations in our operating results will be significant relative to our revenues. |
These risks are described in more detail herein. Our future growth will depend substantially on our ability to address these and the other risks described herein. If we do not successfully address these risks, our business could be significantly harmed.
We have limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operations.
As we have limited operations in our business and have yet to generate significant revenue, it is extremely difficult to make accurate predictions and forecasts on our finances. This is compounded by the fact that we operate in a rapidly transforming industry. There is no guarantee that our products or services will remain attractive to potential and current users as these industries undergo rapid change, or that potential customers will utilize our services.
As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
We have not yet produced a net profit and may not in the near future, if at all. While we expect to earn revenues and grow, we have not achieved profitability and cannot be certain that we will be able to sustain our current growth rate or realize sufficient revenue to achieve profitability. Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, generating revenues throughout the year and keeping operating expenses below revenue levels in order to achieve positive cash flows, none of which can be assured.
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We may be unable to manage growth, which may impact our potential profitability.
Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to:
● | establish definitive business strategies, goals and objectives; | |
● | maintain a system of management controls; and | |
● | attract and retain qualified personnel, as well as develop, train, and manage management-level and other employees. |
If we fail to manage our growth effectively, our business, financial condition, or operating results could be materially harmed, and our stock price may decline.
Our lack of adequate D&O insurance may also make it difficult for it to retain and attract talented and skilled directors and officers.
In the future, we may be subject to additional litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance. Without adequate D&O insurance, the amounts we would pay to indemnify its officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, our lack of adequate D&O insurance may make it difficult for it to retain and attract talented and skilled directors and officers, which could adversely affect our business.
We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.
We estimate that it will cost approximately $150,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.
Risks Related to Ownership of Our Common Stock
The price of Common Stock may be volatile.
In the recent past, stocks generally, and financial services company stocks in particular, have experienced high levels of volatility. The trading price of our Common Stock has been highly volatile since trading commenced. The trading price of our Common Stock depends on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. Factors that could cause fluctuations in the trading price of our Common Stock include the following:
● | price and volume fluctuations in the overall stock market from time to time; | |
● | significant volatility in the market prices and trading volumes of financial services company stocks; | |
● | actual or anticipated changes in our results of operations or fluctuations in our operating results; | |
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● | actual or anticipated changes in the expectations of investors or the recommendations of any securities analysts who follow our Common Stock; | |
● | actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; | |
● | the public’s reaction to our press releases, other public announcements and filings with the SEC; | |
● | business disruptions and costs related to shareholder activism; | |
● | litigation and investigations or proceedings involving us, our industry or both or investigations by regulators into our operations or those of our competitors; | |
● | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; | |
● | changes in accounting standards, policies, guidelines, interpretations or principles; | |
● | general economic conditions; | |
● | changes to the markets in which our Common Stock is traded; and | |
● | sales of shares of our Common Stock by us or our stockholders. |
In the past, many companies that have experienced volatility in the market price of their stock have become subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
Our Common Stock is thinly traded, our stockholders may be unable to sell at or near ask prices or at all if they need to sell their shares to raise money or otherwise desire to liquidate their shares.
Our Common Stock has historically been sporadically traded on the OTC Markets, meaning that the number of persons interested in purchasing our shares at, or near ask prices at any given time, may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as us or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer, which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give shareholders any assurance that a broader or more active public trading market for our shares of Common Stock will develop or be sustained, or that current trading levels will be sustained.
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The market price for our Common Stock is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history, and lack of revenue, which could lead to wide fluctuations our share price. The price at which a shareholder purchases our shares may not be indicative of the price that will prevail in the trading market. Our shareholders may be unable to sell their shares at or above the purchase price, which may result in substantial losses to our shareholders.
The market for our shares of Common Stock is characterized by significant price volatility when compared to seasoned issuers and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our shares are sporadically traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our shares is sold into the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative investment due to, among other matters, our limited operating history and lack of significant revenue or profit to date, and the uncertainty of future market acceptance for our products and services. As a consequence of this enhanced risk, more risk-averse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the securities of a seasoned issuer. The following factors may add to the volatility in the price of our shares: actual or anticipated variations in our quarterly or annual operating results, government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures, our capital commitments, and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our shares regardless of operating performance. We cannot make any predictions or projections as to what the prevailing market price for our shares will be at any time, including as to whether our shares will sustain their current market prices, or as to what effect the sale of shares or the availability of shares for sale at any time will have on the prevailing market price.
Our shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behaviour of the market or of broker-dealers who participate in the market, our management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The possible occurrence of these patterns or practices could increase the volatility of our share price.
We do not expect to pay dividends in the future; any return on investment may be limited to the value of our Common Stock.
We do not currently anticipate paying cash dividends on our Common Stock in the foreseeable future. The payment of dividends on Common Stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our Common Stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our Common Stock may be less valuable because a return on investment will only occur if our stock price appreciates.
Our Common Stock is currently deemed a “penny stock,” which makes it more difficult for our shareholders to sell their shares.
The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock if and when such shares are eligible for sale and may cause a decline in the market value of its stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
As an issuer of a “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.
Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that file reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.
Our charter documents and Nevada law could discourage, delay or prevent a takeover that stockholders consider favourable and could also reduce the market price of our Common Stock.
Our Articles of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to nominate directors for election to our board of directors and take other corporate actions. These provisions, among other things:
● | provide for non-cumulative voting in the election of directors; | |
● | authorize our board of directors, without stockholder approval, to issue preferred stock with terms determined by our board of directors and to issue additional shares of our Common Stock; and | |
● | provide that only our board of directors may set the number of directors constituting our board of directors or fill vacant directorships. |
These and other provisions in our Articles of Incorporation and Bylaws, as well as provisions under Nevada law, could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future for shares of our Common Stock and result in the trading price of our Common Stock being lower than it otherwise would be.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Registration Statement, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important cautionary statements in this prospectus that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
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You should read this prospectus and the documents that we have filed as exhibits to this prospectus with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this prospectus are made as of the date of this prospectus, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the selling stockholders.
MARKET FOR OUR COMMON STOCK
Our Common Stock is quoted on the OTC Pink under the symbol “BCRD.” The table below sets forth for the periods indicated the quarterly high and low bid prices as reported by OTC Markets. Limited trading volume has occurred during these periods. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.
Quarter | High | Low | |||||||||
FISCAL YEAR ENDING MARCH 31, 2022 | First | $ | 1.05 | $ | 1.05 |
Quarter | High | Low | |||||||||
FISCAL YEAR ENDED MARCH 31, 2021 | First | $ | 95.00 | $ | 12.55 | ||||||
Second | $ | 50.80 | $ | 1.05 | |||||||
Third | $ | 1.05 | $ | 1.05 | |||||||
Fourth | $ | 1.05 | $ | 1.05 |
Quarter | High | Low | |||||||||
FISCAL YEAR ENDED MARCH 31, 2020 | First | $ | 120.00 | $ | 35.00 | ||||||
Second | $ | 95.00 | $ | 47.50 | |||||||
Third | $ | 280.00 | $ | 35.00 | |||||||
Fourth | $ | 90.99 | $ | 20.00 |
Our Common Stock is considered to be “penny stock” under rules promulgated by the SEC. Under these rules, broker-dealers participating in transactions in these securities must first deliver a risk disclosure document which describes risks associated with these stocks, broker-dealer duties, customers’ rights and remedies, market and other information, and make suitability determinations approving the customers for these stock transactions based on financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing, provide monthly account statements to customers, and obtain specific written consent of each customer. With these restrictions, the likely effect of designation as a penny stock is to decrease the willingness of broker-dealers to make a market for the stock, to decrease the liquidity of the stock and increase the transaction cost of sales and purchases of these stocks compared to other securities.
Dividend Information
We have not paid any cash dividends on our Common Stock to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
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Holders of Record
As of August 26, 2021, an aggregate of 9,952,075 shares of our Common Stock were issued and outstanding and were owned by approximately 65 stockholders of record.
Unregistered Sales of Equity Securities
From July 1, 2021 to August 26, 2021, the Company sold through a private placement, 62,000 shares of its common stock to 30 investors for a total cash consideration of $124,000.
The shares of common stock were issued and sold pursuant to exemptions from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) and/or Regulation D thereof. No sales commissions were paid in connection with the sales of these securities and no general solicitation was used.
Securities Authorized for Issuance under Equity Compensation Plans
As of March 31, 2021, there were no equity compensation plans either approved by or not approved by our shareholders.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, 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.”
Overview
BlueOne Card Inc., through our relationship with 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 GPR prepaid card, reloading fee, ATM withdrawal fee, and card to card money transaction fee.
We are currently headquartered in Newport Beach, California.
Background
BlueOne Card, Inc. (formerly known as “Avenue South Ltd.,” “TBSS International, Inc.,” or “Manneking Inc.”) was incorporated on July 6, 2007 under 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.
On April 26, 2019, Corporate Compliance, LLC filed a re-application for custodianship pursuant to NRS 78.347. The Eighth Judicial District Court of Clark County, Nevada granted custodianship over TBSS International, Inc. to Corporate Compliance, LLC. On October 15, 2019, we changed our name to “Manneking Inc.,” and then to “BlueOne Card, Inc.” on June 30, 2010. We generated revenues of $20,010 during the three months ended2020.
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
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On June 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 a FINRA corporate action pursuant to FINRA Rule 6490 which was announced on the Daily List as of July 23, 2020.
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, 2019 through the filing of a Form 15. On February 1, 2021, we filed a Registration Statement on Form 10 registering our Common Stock and, $0 during the same period in 2009. This increase in revenue for the three months ended June 30, 2010 is due toon April 2, 2021, our sales to our major customer, a Hong Kong based wholesale distributor of home furnishings of $20,010. We anticipate future increases in revenue from our major customer and perhaps obtain other new distributors and consumer sales through our website but at this time, our ability to generate significant revenues continues to be uncertainRegistration Statement became effective and we continueare currently subject to the reporting requirements of Sections 13 and 15(d) of the Exchange Act.
Reseller Agreement with EndlessOne Global, Inc.
Effective August 15, 2020, we entered into the Reseller Agreement pursuant to which we have agreed to be a development stage company.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.
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 is currently available on Apple and Android. 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 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 is currently available 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. |
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● | 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.
Recent Accounting Pronouncements
See Note 1 of Notes to the Financial Statements contained in this prospectus for management’s discussion of recent accounting pronouncements.
Results of Operations for the Three Months Ended June 30, 2021 (Unaudited) Compared to the Three Months Ended June 30, 2020 (Unaudited)
Revenues and Cost of Sales
Our cost of sales from our inception on July 6, 2007 to June 30, 2010 was $27,223.
Our cost of sales was $16,948 for the three months ended June 30, 2010 compared to $0 for the three months ended June 30, 2009. The increase in theWe did not earn revenues or incurred any cost of sales for the three months ended June 30, 2010 was due to our increase2021 and 2020, respectively.
Operating Expenses
Legal & Filing Fees
Legal and filing fees consisted of fees incurred by the Company in revenuepreparing and filing the regulatory reports with the Securities and Exchange Commission. The Company recorded legal and filing fees of $5,327 and $2,405 for the three months ended June 30, 2010 as we were able2021 and 2020, respectively. The increase in legal fees primarily resulted due to continue to sell our merchandise to our major customer this quarter, which generated $20,010the preparation of revenuelegal documents for capital raise during the three months ended June 30, 2021.
Rent
The Company recorded rent expense of $17,337 and $8,700 for the three months ended June 30, 2010.
Gross Profit
Our gross profit from our inception on July 6, 2007 to June 30, 2010 was $6,997.
Our gross profit was $3,0622021 and 2020, respectively. The increase in rent expense for the three months ended June 30, 2010 compared2021 resulted due to $0the Company leasing an office facility in November 2020 and recording three months’ rent to manage its business operations, whereas, for the three months ended June 30, 2009.2020, the Company’s office lease term matured in April 2020 and it recorded only one month rent in that quarter.
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General & 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 ended June 30, 2021, we incurred G&A of $85,394 as compared to $10,796 for the same comparable period of 2020. The increaseincreases in G&A were primarily due to the gross profitCompany engaging accountants, consultants, Edgarizing and filing fees, payroll and other administrative expenses to expand its infrastructure and operations.
Other Income (Expense)
Other income and expenses include interest expense relating to the financing the purchase of Company vehicle. We reported interest expense of $724 and $594 for the three months ended June 30, 2010 was due to our increase in revenue2021 and 2020, respectively.
Net Loss
We reported a net loss of $108,782 for the three months ended June 30, 2010. Our gross profit margin decreased from approximately 26%2021 as compared to a net loss of $22,495 for the same comparable period in 2020. The increase in the net loss was primarily due to the increase in operating expenses incurred by us.
Results of Operations for the year ended March 31, 20102021 Compared to 15%the year ended March 31, 2020
Revenues and Cost of Sales
We did not earn revenues or incurred any cost of sales for the years ended March 31, 2021 and 2020, respectively.
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 ended March 31, 2021 as compared to $95,533 for the year ended March 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 in Nevada, increase in payroll costs, increase in depreciation expense, and increase in legal, accounting and professional fees paid to consultants.
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 ended March 31, 2021 as compared to $241 for the year ended March 31, 2020, respectively.
Net Losses
We incurred a net loss of $275,892 for the year ended March 31, 2021as compared to a net loss of $95,774 for the year ended March 31, 2020. The increase in loss of $180,118 was due to the increase in operating expenses incurred by us.
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Liquidity and Capital Resources
Liquidity and Capital Resources for the three months ended June 30, 2010. This decrease in gross margin is due2021 compared to the renegotiation of our selling prices to our major customer in order for us to derive more sales volume from our major customer for future fiscal quarters and for the yearthree months ended March 31, 2011. We expect our future gross profit margins to continue to be in the range of 15% to 17% with our major customer and 15% to 25% from other customers as we continue to seek new business from wholesale distributors of home furnishing products and other retail consumers.
Expenses
From July 6, 2007 (inception) to June 30, 2010, our total expenses were $11,840. These total expenses since inception to June 30, 2010 were for general and administrative expenses which consisted2020
June 30, 2021 | June 30, 2020 | |||||||
Summary of Cash Flows: | ||||||||
Net cash used by operating activities | $ | (72,730 | ) | $ | (9,530 | ) | ||
Net cash used by investing activities | - | (19,500 | ) | |||||
Net cash (used in) provided by financing activities | (3,003 | ) | 29,030 | |||||
Net decrease in cash | (75,733 | ) | - | |||||
Cash – Beginning of the period | 340,502 | - | ||||||
Cash – End of the period | $ | 264,769 | $ | - |
Operating Activities
Net cash used in operating activities of charges for website maintenance and credit card fees, bank charges, office maintenance, communication expenses, courier, postage, office supplies, and travel. Our expenses were $115$72,730 for the three months ended June 30, 2010 compared2021 was primarily a result of our net loss of $108,782, depreciation of $10,525, and an increase in operating assets and liabilities of $25,527 due to $697increase in prepaid deposits of $1,228, increase in related party payable of $33,082, offset by decrease in accrued liabilities of $6,327. Cash used in operating activities of $9,530 for the three months ended June 30, 2009. The2020 resulted primarily due to our net loss of $22,495, depreciation of $7,259, and decrease in the expensesoperating assets of $5,706 due to decrease in prepaid deposits of $8,700, decrease in accrued liabilities of $1,181, and decrease in related party payable of $1,813.
Investing Activities
Net cash used in investing activities for the three months ended June 30, 20102021 was due to our decrease costs incurred for travel expenses, credit card fees and other general and administrative expenses$0. Net cash used in investing activities for the three months ended June 30, 2010. We expect our general and administrative costs to increase sometime later2020 was $19,500 as a result of down payment paid for purchase of vehicle.
Financing Activities
Net cash used in 2010 or 2011 if we can expand our sales in Hong Kong and other locations and increase our profits. We may also increase our general and administrative expenses if we are able to raise money through a combination of debt financing and equity financing by way of doing another private placement.
Net Income (Loss)
We have a net loss of $4,843 during the period from our inception on July 6, 2007 to June 30, 2010. We had net income of $2,947 during the three months ended June 30, 2010 and a net loss of $697 during the same period in 2009. This increase in net incomeactivities for the three months ended June 30, 2010 is due to our sale to our distributor in Hong Kong.
Results2021 was $3,003 consisting of Operationscash paid for the yearsloan payable for purchase of vehicle. Net cash provided by financing activities for the three months ended March 31, 2010June 30, 2020 was $29,030 consisting of net cash proceeds of $30,000 received from the sale of our common stock offset by cash of $970 paid towards the loan payable for purchase of vehicle.
Liquidity and March 31, 2009, from July 6, 2007 (inception) to March 31, 2010 and Predecessor Results of Operations from February 15, 2005 (predecessor inception) to July 5, 2007.
Revenues
We generated revenues of $14,210 during the period from our inception on July 6, 2007 to March 31, 2010. We generated revenues of $13,500 during the year ended March 31, 2010 and $417 during the same period in 2009. This increase in revenueCapital Resources for the year ended March 31, 20102021 compared to the year ended March 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 |
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● | 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 increase in operating assets and liabilities of $74,121 due to our first sale to our majorincrease in prepaid deposits of $146,372, increase in accrued liabilities of $8,317, increase in customer a Hong Kong based wholesale distributordeposits of home furnishings$20,000, and increase in related party payables of $13,500. We generated total revenue from our predecessor$43,934. Net cash used in operations of $10,787$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.
Investing Activities
Net cash used in investing activities for the year ended March 31, 2021 of $19,500 resulted from February 15, 2005 (predecessor inception)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 July 5, 2007. At this time,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 is 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.
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Going Concern
The accompanying financial statements have been prepared on a going concern basis. For the three months ended June 30, 2021, we had incurred a net loss of $108,782, had net cash used in operating activities of $72,730, and accumulated deficit of $717,768. 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.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.
While our significant revenues continuesaccounting policies are described in more details in Note 2 of our annual financial statements included in our fiscal year end March 31, 2021 Annual Report filed with the SEC on June 21, 2021, we believe the following accounting policies to be uncertain. The auditor’s reportcritical to the judgments and estimates used in the preparation of our financial statements.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Development Stage and Capital Resources
We have devoted substantially all of our efforts to business planning since our inception on July 6, 2007. Accordingly, we are considered to be in the development stage. We have not generated revenues from our operations, and we will not commence generating revenues until sometime during the first calendar quarter of 2021.
Off-Balance Sheet Arrangements
We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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Recent Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect and that may impact our financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our audited financial statementsposition or results of operations which have not been adopted.
Impact of COVID-19
During the three months ended June 30, 2021, the effects of a new coronavirus (“COVID-19”) and related actions to attempt to control its spread began to impact our business. The impact of COVID-19 on our operating results for the yearsthree months ended June 30, 2021 was limited, in all material respects, due to the government mandated numerous measures, including closures of businesses, limitations on movements of individuals and goods, and the imposition of other restrictive measures, in its efforts to mitigate the spread of COVID-19 within the country.
On March 31, 201011, 2020, the World Health Organization designated COVID-19 as a global pandemic. Governments around the world have mandated, and 2009 contains ancontinue to introduce, orders to slow the transmission of the virus, including but not limited to shelter-in-place orders, quarantines, significant restrictions on travel, as well as work restrictions that prohibit many employees from going to work. Uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets.
To the extent that COVID-19 continues or worsens, governments may impose additional explanatory paragraphrestrictions or additional governments may impose restrictions. The result of COVID-19 and those restrictions could result in a number of adverse impacts to our business, including but not limited to additional disruption to the economy and consumers’ willingness and ability to spend, temporary or permanent closures by businesses that will consume our credit and debit cards, additional work restrictions, and supply chains being interrupted, slowed, or rendered inoperable. As a result, it may be challenging to obtain and process credit and debit card transactions and supply chains to support our business needs, and individuals could become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. Also, governments may impose other laws, regulations or taxes which identifies issuescould adversely impact our business, financial condition or results of operations. Further, if our customers’ businesses or incomes are similarly affected, they might delay or reduce usage by our cardholders. The potential effects of COVID-19 also could impact us in a number of other ways including, but not limited to, reductions to our profitability, laws and regulations affecting our business, the availability of future borrowings, the cost of borrowings, and credit risks of our cardholders and counterparties. We have demonstrated adverse conditions that raise substantial doubt about our ability to continue as a going concern. The continuation of our company as a going concern, in conjunction with COVID-19 impact, is dependent upon the continued financial support from our shareholders, our ability to obtain necessary financing to continue our operations, and the attainment of profitable operations. Given the evolving health, economic, social, and governmental environments, the potential impact that COVID-19 could have on our business remains uncertain. If we are unable to obtain adequate capital, we could be forced to cease operations.
BUSINESS AND PROPERTIES
Overview
BlueOne Card Inc., through our relationship with 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.
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. 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 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.
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We are currently headquartered in Newport Beach, California.
Background
BlueOne Card, Inc. (formerly known as “Avenue South Ltd.,” “TBSS International, Inc.,” or “Manneking Inc.”) was incorporated on July 6, 2007 under 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., and got engaged in gold mining and drilling and general construction.
On April 26, 2019, Corporate Compliance, LLC filed a re-application for custodianship pursuant to NRS 78.347. The Eighth Judicial District Court of Clark County, Nevada granted custodianship over TBSS International, Inc. to Corporate Compliance, LLC. On October 15, 2019, we changed our name to “Manneking Inc.,” and then to “BlueOne Card, Inc.” on June 30, 2020.
On October 15, 2019, we executed a 1 for 100 reverse stock-split. On June 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 a FINRA corporate action pursuant to FINRA Rule 6490 which was announced on the Daily List as of July 23, 2020.
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 on May 29, 2019 through the filing of a Form 15. On February 1, 2021, we filed a Registration Statement on Form 10 registering our Common Stock and, on April 2, 2021, our Registration Statement became effective and we are currently subject to the reporting requirements of Sections 13 and 15(d) of the Exchange Act.
EndlessOne Global, Inc.
EndlessOne Global Inc. is an International Payment Card Issuer, Processor and a Banking Software company whose platform is operational and available. The Program Manager plans to have ambassadors and card experts available around the world 24/7 to serve and provide its client/customers with the next generation of card and banking software. The Program Manager is ushering in a new kind of debit card, one with comprehensive services and instant upfront reward packages. As an eWallet provider creating all different types of debit cards that are used every day, the Program Manager focuses on driving digital commerce with eWallet software which works for all people. The easy-to-use eWallet allows the banked or unbanked customer the ability and freedom to manage their money.
Reseller Agreement with EndlessOne Global, Inc.
Effective August 15, 2020, we entered into 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 Reseller Agreement does not provide exclusivity and there are no volume sales requirements pertaining to our reselling efforts.
Our duties under the Reseller Agreement are to use our best efforts to promote and market the products of the Program Manager including, but not limited to: providing the first introduction of the products to prospective customers, conducting the preliminary qualification of prospective customers for the products of the Program Manager, conducting sales presentations and obtaining commitments from prospects, and distribution of the Program Manager’s collateral materials, as appropriate.
The term of the Reseller Agreement is for 24 months. 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.
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On September 15, 2020, we made a deposit of $100,000 to the Program Manager to purchase prepaid debit cards with our design, logo. On February 8, 2021, we paid an additional $49,313 payment to the Program Manager to purchase 10,000 prepaid debit cards.
The Program Manager’s Unique Platform
We believe the Program Manager provides a unique platform different from other competitors. Unlike many other institutions and companies who only do card-to-card transfer domestically, the Program Manager’s prepaid, branded cards instantly transfer money from card-to-card across the border through a mobile application, which is now available. Consumers who receive the card-to-card transfer are easily be able to cash out the money at any ATM in the world. Thus, using the Program Manager’s platform, consumers will save time, as well as enjoy reasonable foreign exchange rate cost.
Development of the platform provided by and owned by the Program Manager has been completed and is now operational. We do not own the platform nor did we contribute in any way to its development.
Principal Products and Services
The Program Manager offers prepaid, branded cards that provide consumer benefits such as no overdraft fees, no interest fees, virtual bank accounts, and free direct deposit. We will act as a reseller of the Program Manager’s prepaid, branded cards pursuant to the Reseller Agreement.
Some of the benefits of the Program Manager’s prepaid, branded cards will be as follows:
● | The mobile application is available for iOS devices (Apple), android, and windows (Microsoft). | |
● | The Program Manager will provide a GRN meaning that it will connect any proprietary accounts or card systems to other systems worldwide. | |
● | Free checking account and check books. | |
● | We intend to resell the Program Manager’s prepaid, branded cards to liquor stores throughout the U.S. and online at www.blueonecard.com as well. | |
● | The Program Manager’s prepaid, branded cards will provide a Dynamic CVV function. | |
● | The Program Manger’s prepaid, branded cards access will be lock and unlocked with SAFE technology. Consumers will also instantly be able to lock and unlock the cards via text SMS. | |
● | The Program Manager will provide a free checking account. | |
● | We believe checks will be able to be directly deposited via the Program Manager’s mobile application, once available. |
Market Strategy
Currently, without the Program Manager’s prepaid, branded cards, numerous of those users who are unbanked or underbanked, use methods such as Western Union, or its mobile application, in order to send and receive funds to and from others, especially if it is an international money transfer and non-domestic. This makes the user’s experience more complicated as cashing in checks and paying bills become a lot more costly and also very time consuming. Also, other ordinary prepaid debit cards may charge very high fees.
In comparison, we believe the Program Manager’s prepaid, branded cards will be safer than cash, more convenient than checks, and very easy to obtain through liquor stores or online, which are the principal methods we intend to resell the cards. Not only this, there are also no troubles with exchange rates, and transfers being cancelled or rejected after days unlike using other financial service companies. With the Program Manager’s prepaid, branded cards, high cash checking fees will be eliminated, and direct deposit can be made to save the consumer’s time and money. Also, with its global remittance network provided by the Program Manager, the Program Manager’s prepaid, branded cards will connect proprietary accounts or card systems to other systems in any parts of the world.
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Distribution of Products and Services
Looking solely at other prepaid card competitors located in big grocery stores such as Walmart, Target, etc., we aim to differentiate ourselves from them by targeting liquor stores across the U.S. for distribution of the Program Manager’s prepaid, branded cards. The reason for this is that we believe that many of the unbanked with lower income users access liquor stores more frequently than the larger stores. Not only this, we anticipate that setting up a money loading system in liquor stores will save time in the lives of most consumers.
According to industry data, we believe there are approximately 34,000 liquor stores currently in the U.S. and we initially intend to target up to 7,000 of those stores for distribution of the Program Manager’s prepaid, branded cards. We also anticipate reselling the Program Manager’s prepaid, branded cards through our website. If we are able to distribute the Program Manager’s prepaid, branded cards to these stores throughout the U.S. under the terms of the Reseller Agreement, we estimate our revenues would be extensive. Once the beta-testing stage is completed and the platform is launched, we believe that the Program Manager’s prepaid, branded card will be very affordable compared to the traditional alternatives. The reasons for this are as follows:
World Safest Card Security Suite
● | Lock and Unlock – SAFE Technology allows cardholders to instantly lock and unlock their cards via SMS or Cardholder online Portal. Cardholders can personalize the lock feature for ATM, POS, withdrawals, transfers, recurring payments, auto-lock and more. | |
● | Dynamic CVV Technology – Dynamic CVV Technology SAFE Technology empowers cardholders to easily change their CVV code for one-time use. Through mobile authorization, SAFE Technology offers the most secure armoured layer of security available for cardholders. |
Global Remittance Network (“GRN”)
● | GRN is a worldwide remittance messaging system, an “any-to-any” switch that connects any proprietary account or card system to other systems in the world. | |
● | This remittance network can link card to card, regardless of Network, account to account, including a credit or debit card to account. | |
● | Initial customer acquisition is based on leveraging and empowering existing card portfolios and global business relationships in both sending and receiving countries. | |
● | GRN operates within a closed loop of banks, accounts, card, or wallet programs. | |
● | Participants in the GRM Network will share in the margins generated out of the transaction fees. |
We believe that we will be able to enter into distribution agreements with liquor store owners to distribute the Program Manager’s prepaid, branded card in their respective stores due to the fact that we believe it will greatly increase traffic to the respective stores due to demand for the card. With heavier traffic, we believe there will be increased sales in each liquor store as numerous people will walk in to load money and purchase GPR prepaid cards. We believe this will also benefit the store owner as there will be increased premium later on for the store itself. Thus, there will be an exchange of benefit between the multitude of liquor stores throughout the U.S. that we intend to target and our Company.
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Marketing of Products and Services
We plan to market the Program Manager’s products and services through an extensive network of sales representatives and through our website, www.blueonecard.com.
Intellectual Property
All intellectual property required for the operation of our business is provided through our relationship with the Program Manager.
Employees
As of August 26, 2021, we had one employee, Mr. James Koh, our Chief Executive Officer (“CEO”), who is a full-time employee.
On December 1, 2020, we entered into an Employment Agreement with James Koh, our President and CEO. The terms of the agreement are stated in more detail below.
At any given time, we will also engage 2-5 independent contractors.
Competition
Our core business will include the offering of the Program Manager’s prepaid, branded cards that will provide consumer benefits such as no overdraft fees, no interest fees, virtual bank accounts, and free direct deposit. Consequently, we, as a reseller of the cards, will compete against companies and financial institutions across the retail banking, financial services, transaction processing, consumer technology and financial technology services industries and we may also compete with others in the market who may in the future provide offerings similar to ours. Furthermore, many of our competitors are entities substantially larger in size (such as Green Dot Corporation), more highly diversified in revenue and substantially more established with significantly more broadly known brand awareness than ours. As such, many of our competitors can leverage their size, robust networks, financial wherewithal, brand awareness, pricing power and technological assets to compete with us. Additionally, some of our current and potential competitors are subject to fewer regulations and restrictions than we are and thus may be able to respond more quickly in the face of regulatory and technological changes.
Government Regulations
Although the Program Manager is subject to extensive government regulation, as a reseller, we are not subject to the same regulations. If the Program Manager fails to comply with government regulations applicable to it, it could have a material adverse effect on our business.
U.S. Securities Laws
We are subject to regulations by U.S. federal and state securities laws as a public company, including the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
SEC Reporting
We are a Pink Sheet issuer filing current, public information with OTC Markets Group Inc. electronic quotation venue under the trading symbol “BCRD.” There is a highly illiquid nature in investing in our common stock.
We are a fully-reporting public reporting company filing reports, proxy statements, information statements and other information with the U.S. Securities and Exchange Commission (“SEC”). You may read and copy this information, for a copying fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document retrieval services, and at the website maintained by the SEC at http://www.sec.gov.
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LEGAL PROCEEDINGS
We anticipate that we (including any future subsidiaries) will from time to time become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings and we cannot assure that their ultimate disposition will not have a materially adverse effect on our business, financial condition, cash flows or results of operations. As of the filing of this Annual Report, we are not a party to any pending legal proceedings, nor are we aware of any civil proceeding or government authority contemplating any legal proceeding.
MANAGEMENT
The following table sets forth the names, positions and ages of our current executive officers and directors. All directors serve until the next annual meeting of stockholders or until their successors are elected and qualified. Officers are appointed by our board of directors and their terms of office are, except to the extent governed by an employment contract, at the discretion of our board of directors.
Name | Age | Title | ||
James Koh* | 53 | President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors |
* | Mr. Koh is the sole officer and director of the Company and its majority shareholder. |
Our President, CEO, CFO and Chairman
Mr. Koh was appointed as an officer and director of the Company on October 7, 2019. Mr. Koh has extensive experience in the wireless telecommunications industry having worked for the past 16 years in R&D, manufacturing, and within senior management positions engaged in developing cellular phones for AT&T, T-Mobile, Telcel (Mexico), and Fido (Canada). From his role as the Chief Executive Officer of Tiger Stand Corp. from 2005 to 2017, he was engaged in sales, marketing, and operations management. Mr. Koh has been a private pilot and FAA licensed since 1990.
Associations with Companies with a Class of Securities Registered Pursuant to Section 12 or 15(d) of the Exchange Act
On November 1, 2017, American Standard Wallet, Inc. (now known as “Monetiva, Inc.”) (“ASW”), effected a change of control whereby then existing owner James Koh, the sole shareholder, officer and director of ASW, sold all 8,000,000 of his shares of ASW’s common stock to Mr. Pierre Sawaya. ASW accepted the resignation of Mr. Koh as the existing officer and director, electing a new officer and sole director Mr. Pierre Sawaya, upon issuance of the shares to Mr. Sawaya.
Mr. Sawaya founded EndlessOne Global Inc. in 2011 and served as its CEO until October 2016, and is no longer an officer, director, or owner of EndlessOne.
On May 17, 2017, James Koh was appointed as the sole director and officer of Golden Rush, Inc. Effective October 9, 2019, pursuant the settled Order between the SEC and Golden Rush, the registration of each class of Golden Rush’s securities registered pursuant to Section 12 of the Exchange Act was revoked.
Legal Proceedings
During the past ten years, none of the following events would apply to any of our directors or executive officers:
● | A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
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● | Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
● | Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: |
● | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; | |
● | Engaging in any type of business practice; or | |
● | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
● | Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; | |
● | Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
● | Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
● | Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
● | Any Federal or State securities or commodities law or regulation; or | |
● | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or | |
● | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
● | Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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Code of Ethics.
During the period of this Report, the Company did not have in place an adopted Code of Ethics pursuant to rules described in Regulation S-K. During the period of this Report, the Company has had only one director and officer. During the period of this report, the Company had minimal operations or business and did not generate any revenues. During the period of this Report, the adoption of an Ethical Code would not serve the primary purpose of such a code to provide a manner of conduct as the development, execution and enforcement of such a code would be by the same persons and only persons to whom such code applied. At such time as the Company commences more significant business operations, the current officers and directors will recommend that such a code be adopted.
Corporate Governance
For reasons similar to those described above, the Company does not have a nominating, compensation committee, or audit committee of the board of directors. During the period of this Report, the Company has had only one person who served as the only director and officer. During the period of this report, the Company had no operations or business and did not receive any revenues or investment capital. At such time as the Company commences more significant business operations and/or has additional shareholders and a larger board of directors, the Company will propose creating committees of its board of directors, including a nominating, compensation, and an audit committee. Because there has been only one shareholder of the Company, there was no established process by which shareholders to the Company could nominate members to the Company’s board of directors. Similarly, however, at such time as the Company has more shareholders and an expanded board of directors, the Company may review and implement, as necessary, procedures for shareholder nomination of members to the Company’s board of directors.
Family Relationships
There are no family relationships between any of our directors and executive officers.
Director Independence
We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.
Certain Relationships and Related Transactions
Except as disclosed below, for transactions with our executive officers and directors, please see the disclosure under “EXECUTIVE COMPENSATION” below.
On July 31, 2019, our former Chief Executive Officer (the “Former Officer”) loaned us $7,567 to pay the costs and expenses necessary to revive our business operations and to reinstate our charter with the State of Nevada, settling all past due accounts with our transfer agent and legal fees.
On July 31, 2019, we issued 300,000 shares of our Series A Convertible Preferred Stock to an entity affiliated with the Former Officer (the “Affiliated Entity”) in consideration for the loans totalling $7,567. The Former Officer loaned additional funds to us totalling $1,737 which were forgiven by the Former Officer.
On October 7, 2019, the Affiliated Entity entered into a private transaction with our current Chief Executive Officer to sell the 300,000 shares of Series A Convertible Preferred Stock owned by the Affiliated Entity.
On September 15, 2020, we made a deposit of $100,000 to the Program Manager 2020 to purchase prepaid debit cards. On February 8, 2021, we paid an additional payment of $49,313 to the Program Manager to purchase 10,000 debit cards.
On September 30, 2020, our Chief Executive Officer converted 8,000 shares of Series A Convertible Preferred Stock into 8,000,000 shares of our Common Stock.
Our CEO, from time to time, has provided advances to us for our working capital needs. We have recorded a payable to the CEO of $100,211 and $56,277 at March 31, 2021 and at March 31, 2020, respectively. The funds advanced are unsecured, non-interest bearing, and due on demand.
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EXECUTIVE COMPENSATION
Executive Compensation
The following table and related footnotes show the compensation paid to our named executive officers during the last fiscal year ended March 31, 2021, and information concerning all compensation paid for services rendered to us in all capacities for our last two fiscal years.
Name and Principal Position | Year- Ended | Salary($) | Stock Awards($) | All Other Compensation($) | Total($) | |||||||||||||||
James Koh, President, CEO, and Chairman** | March 31, 2021 | 50,000 | 1,000 | 0 | 51,000 | |||||||||||||||
March 31, 2020 | 0 | 0 | 0 | 0 |
** All compensation in the form of salary owed pursuant to the employment agreement has been unpaid and is being deferred by Mr. Koh. The Company intends to defer payment of executive’s salary compensation until the Company has sufficient amounts to fund both the Company’s operations and executive’s salary. Mr. Koh’s employment agreement awarded Mr. Koh 1,000,000 shares of Company’s common stock, which was valued at $1,000.
Employment Agreements
CEO Employment Agreement
On December 1, 2020, we entered into an Employment Agreement with James Koh, our President, CEO, Secretary, and Chairman. 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 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.
As a bonus for entering into the agreement, Mr. Koh was issued 1,000,000 shares of our common stock and, in the event that the agreement is terminated prior to one year from the date of the agreement, Mr. Koh is obligated to return the shares to us. Pursuant to the agreement, Mr. Koh is entitled to an annual base salary of $150,000 and that amount is subject to an automatic 10% annual increase.
Pursuant to the agreement, Mr. Koh is entitled to bonuses, reimbursement of expenses, a vehicle allowance, four weeks of paid vacation, and other incentives.
This agreement does provide for payments to be made as a result of any “Change in Control,” as defined in the agreement, of us.
Outstanding Equity Awards at Fiscal Year-End
None.
Director Compensation
At this time, our director does not receive cash compensation for serving as a member of our Board of Directors. The term of office for each Director is one year, or until his/her successor is elected at our annual meeting and qualified. The term of office for each of our officers is at the pleasure of the Board of Directors. The Board of Directors has no nominating, auditing committee or a compensation committee. Therefore, the selection of person or election to the Board of Directors was neither independently made nor negotiated at arm’s length.
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During the fiscal year ended March 31, 2021, our sole director, and President and CEO, Mr. Koh, received no compensation for services provided as a director.
Limitation on Liability and Indemnification
The Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors.
The limitation of liability and indemnification provisions under the Nevada Revised Statues and in our governing documents may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and footnotes thereto sets forth, as of August 26, 2021, information regarding the number of shares of Common Stock beneficially owned by (i) each director and named executive officer of our Company, (ii) named executive officers, executive officers, and directors of the Company as a group, and (iii) each person known by us to be the beneficial owner of 5% or more of our issued and outstanding shares of Common Stock. In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table assumes 9,952,075 shares of Common Stock outstanding. Unless otherwise further indicated in the following table, the footnotes thereto and/or elsewhere in this report, the persons and entities named in the following table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name, subject to community property laws, where applicable. Unless as otherwise indicated in the following table and/or the footnotes thereto, the address of our named executive officers and directors in the following table is: 4695 MacArthur Court, Suite 1100, Newport Beach, CA 92660.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(1) | ||||||
Named Executive Officers and Directors’ | ||||||||
James Koh, President, CEO, Secretary, and Chairman | 301,000,000 | (2) | 99.68 | % | ||||
Executive Officers, Named Executive Officers, and Directors as a Group (One Person) | 301,000,000 | 99.68 | % |
(1) | Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the date of this Annual Report. | |
(2) | Includes 292,000,000 shares issuable upon the conversion of 292,000 shares of Series A Convertible Preferred Stock owned by Mr. Koh. |
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Changes in Control
There are no arrangements known to us the operation of which may at a subsequent date result in a change in control of the Company.
SELLING STOCKHOLDERS
This prospectus relates to the possible resale by the selling stockholders named below of shares of the Company’s common stock. References in this prospectus to the “selling stockholder(s)” includes the selling stockholders listed below, and any donees, pledgees, transferees or other successors in interest selling shares received after the date of this prospectus from a selling stockholder as a gift, pledge or other non-sale related transfer.
The selling stockholders will offer their shares at $0.50 per share or, upon quotation of our Common Stock on an established public trading market (including the OTCQB), at prevailing market or privately negotiated prices including (without limitation) in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale or at prevailing market if a market should develop.
The distribution of the selling stockholders’ shares may be affected in one or more transactions that may take place through customary brokerage channels, in privately-negotiated sales, by a combination of these methods or by other means. The selling stockholders may from time to time offer their shares through underwriters, brokers-dealers, agents or other intermediaries. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the selling stockholders in connection with sales of the shares.
We do not know how long the selling stockholders will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares. We will not receive any portion or percentage of any of the proceeds from the sale of the shares.
The following table sets forth ownership of shares held by each person who is a selling stockholder.
Name | Amount Beneficial Ownership Before Offering | Percentage of Common Stock Owned Before Offering1 | Amount to be Offered for the Security Holder’s Account | Amount to be Beneficially Owned After Offering1 | Percentage of Common Stock Owned After Offering2 | |||||||||||||||
HEE SUN YOON | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
STEVEN YARIV | 10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
SONG YI YANG | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
VANISMO VENTURES | 700 | * | 700 | 0 | 0 | % | ||||||||||||||
MARK VAN WAGONER | 501 | * | 501 | 0 | 0 | % | ||||||||||||||
TWO CINCO LLC | 600 | * | 600 | 0 | 0 | % | ||||||||||||||
TILO STEURER | 100,000 | 1.00 | % | 100,000 | 0 | 0 | % | |||||||||||||
STERLING GROUP NEVADA | 10 | * | 10 | 0 | 0 | % | ||||||||||||||
TODD SPINELLI | 4,000 | * | 4,000 | 0 | 0 | % | ||||||||||||||
JONG H SONG | 1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
SEUNG KWAN SOHN | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
SEEUN SHIN | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
KENNY SHIN | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
JAMES HUIJONG PARK | 1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
CHONG Y PAIK | 5,000 | * | 5,000 | 0 | 0 | % | ||||||||||||||
NORTH SHORE EQUITY TRADING INC | 700 | * | 700 | 0 | 0 | % | ||||||||||||||
FARZAD NAFEIY | 300,000 | 3.01 | % | 300,000 | 0 | 0 | % |
37 |
JU SUNG MYUNG | 400,000 | 4.02 | % | 400,000 | 0 | 0 | % | |||||||||||||
MP GLOBAL ELECTRIC SYSTEMS LLC | 376 | * | 376 | 0 | 0 | % | ||||||||||||||
HYOUNGHOON MOOM | 2,500 | * | 2,500 | 0 | 0 | % | ||||||||||||||
JULIO CESAR RODRIGUEZ MONTALVO | 10,500 | * | 10,500 | 0 | 0 | % | ||||||||||||||
COLE MCTEE | 10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
MAREMANNO CORP | 290 | * | 290 | 0 | 0 | % | ||||||||||||||
FREDRICK P LUTZ | 11 | * | 11 | 0 | 0 | % | ||||||||||||||
JONGSEUNG LEE | 5,000 | * | 5,000 | 0 | 0 | % | ||||||||||||||
GARY A LAFF | 2,000 | * | 2,000 | 0 | 0 | % | ||||||||||||||
PETER KOVACS | 750 | * | 750 | 0 | 0 | % | ||||||||||||||
EDITH KOCSIS | 750 | * | 750 | 0 | 0 | % | ||||||||||||||
YOUNG RAN KIM | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
SEO GANG KIM | 10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
RICHARD KIM | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
RAYMOND KIM | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
OK RAN KIM | 3,000 | * | 3,000 | 0 | 0 | % | ||||||||||||||
MIKE HANGON KIM | 2,500 | * | 2,500 | 0 | 0 | % | ||||||||||||||
EDWIN KIM | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
DONALD KIM | 2,000 | * | 2,000 | 0 | 0 | % | ||||||||||||||
YONG JOO KANG | 5,000 | * | 5,000 | 0 | 0 | % | ||||||||||||||
KYU CHUL KANG | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
CHEOL KANG | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
YOUNG JOO JANG | 2,000 | * | 2,000 | 0 | 0 | % | ||||||||||||||
KAREN JANG | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
KAB SEUB JANG | 30,000 | * | 30,000 | 0 | 0 | % | ||||||||||||||
BYUNG HO HUH | 2,500 | * | 2,500 | 0 | 0 | % | ||||||||||||||
BRIAN Y HUH | 2,500 | * | 2,500 | 0 | 0 | % | ||||||||||||||
GRANADA ENTERPRISES INC | 200 | * | 200 | 0 | 0 | % | ||||||||||||||
FIVE STAR LAWN CARE INC | 518 | * | 518 | 0 | 0 | % | ||||||||||||||
DOUBLE R GOLF LLC | 700 | * | 700 | 0 | 0 | % | ||||||||||||||
DIOMEDE CORP | 1,136 | * | 1,136 | 0 | 0 | % | ||||||||||||||
DELEO ASSOCIATES | 700 | * | 700 | 0 | 0 | % | ||||||||||||||
DAY FAMILY TRUST | 800 | * | 800 | 0 | 0 | % | ||||||||||||||
ANTONIO CUCURNIA | 350 | * | 350 | 0 | 0 | % | ||||||||||||||
MYUNGCHEOL CHO | 500 | * | 500 | 0 | 0 | % | ||||||||||||||
KYU MIN CHO | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
KISUK CHO | 1,000 | * | 1,000 | 0 | 0 | % | ||||||||||||||
YOUN SUNG CHA | 1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
CAYMAN INSTITUTIONAL BANK FBO MAREMANNO CORP | 100 | * | 100 | 0 | 0 | % | ||||||||||||||
BLUE ONE KOREA CO LTD | 600 | * | 600 | 0 | 0 | % | ||||||||||||||
BARBARA BLACKWELL | 100 | * | 100 | 0 | 0 | % | ||||||||||||||
NAM CHUL BAE | 4,000 | * | 4,000 | 0 | 0 | % | ||||||||||||||
BARBARA AZZURRINI | 450 | * | 450 | 0 | 0 | % | ||||||||||||||
CHRISTOPHER ANDERSON | 10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
ALEXANDER H WALKER III LLC | 100 | * | 100 | 0 | 0 | % | ||||||||||||||
AFFINITY ADVISORS LLC | 50 | * | 50 | 0 | 0 | % | ||||||||||||||
TOTAL | 948,992 | 948,992 | 0 | 0 | % |
*Less than 1%
1 Based upon 9,952,075 shares outstanding.
2 Based upon 9,952,075 shares outstanding after the offering.
38 |
Each of the selling stockholders received his, her, or its shares in private offerings of the Company from November 6, 2019 to August 26, 2021.
The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling shareholder has sole or shared voting power or investment power and also any shares, which the selling shareholder has the right to acquire within 60 days. Except for as noted above, none of our selling stockholders is a broker-dealer or an affiliate of a broker-dealer.
DESCRIPTION OF SECURITIES
We have authorized capital stock consisting of the following. The total number of shares of capital stock which the Company has the authority to issue is 525,000,000 shares. These shares are divided into two classes with 500,000,000 shares designated as Common Stock at $0.001 par value (the “Common Stock”) and 25,000,000 shares designated as Preferred Stock at $0.001 par value (the “Preferred Stock”).The Preferred Stock of the Company is issuable by authority of our Board of Directors in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as our Board of Directors may determine, from time to time. We have 9,952,075 common shares and 292,000 preferred shares outstanding as of the date hereof.
Common Stock
The holders of outstanding common shares are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors then standing for election. The common shares are not entitled to pre-emptive rights and are not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common shares after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding common share is duly and validly issued, fully paid and non-assessable.
Preferred Stock
We may issue up to 25,000,000 shares of preferred stock, par value $0.001 per share, from time to time in one or more series. Our Board of Directors, without further approval of its stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series. Issuances of shares of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of our Common Stock and other series of Preferred Stock then outstanding.
Series A Convertible Preferred Stock
There are 1,000,000 shares of Series A Convertible Preferred Stock designated and 292,000 shares issued and outstanding as of the date hereof.
Liquidation Preference
In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of Series A Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of any of the assets or surplus finds of the Company to the holders of junior capital stock, including the Common Stock.
Dividends
The holders of Series A Convertible Preferred Stock are not entitled to any dividends.
39 |
Conversion Rights
Each share of Series A Convertible Preferred Stock is convertible, at the option of the holder, into 1,000 shares of Common Stock.
Voting Rights
Each share of Series A Convertible Preferred Stock is entitled to 1,000 votes per share and is entitled to vote on any matter with the holders of Common Stock.
Warrants
As of August 26, 2021, we had no warrants issued and outstanding.
Equity Compensation Plan
Currently, we have no adopted equity compensation plan
PLAN OF DISTRIBUTION
General
The selling stockholders may seek an underwriter, broker-dealer or selling agent to sell the shares. Except for as disclosed herein, as of the date of this prospectus, no selling stockholder has entered into any arrangements with any underwriter, broker-dealer or selling agent for the sale of the shares. We have no arrangements, nor has it entered into any agreement with any underwriters, broker-dealer or selling agents for the sale of the shares.
The selling stockholders and any underwriters, broker-dealers or agents who participate in the sale or distribution of the shares may be deemed to be “underwriters” within the meaning of the Securities Act. As a result, any profits on the sale of the shares by the selling stockholders and any discounts, commissions or agent’s commissions or concessions received by any such broker-dealer or agents may be deemed to be underwriting discounts and commissions under the Securities Act. If any selling stockholder is deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act, it will be subject to prospectus delivery requirements of the Securities Act. Underwriters are subject to certain statutory liabilities, including, but not limited to, Sections 11, 12 and 17 of the Securities Act.
The selling stockholders are not obligated to sell any or all of the shares under this prospectus. Further, they are may transfer, devise or gift the shares by other means not described in this prospectus. In addition, any shares covered by this prospectus that qualify for sale under Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A in certain instances, rather than under this prospectus.
The shares covered by this prospectus may also be sold to non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act rather than under this prospectus. The shares may be sold in some states only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification is available and complied with. If any of the shares offered for resale pursuant to this prospectus are transferred other than pursuant to a sale under this prospectus, the subsequent holders could not use this prospectus until a post-effective amendment to the registration statement of which this prospectus is a part or a prospectus supplement is filed naming such holders.
The selling stockholders and any other person participating in the sale of the shares may be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the shares by the selling stockholders and any other such person. In addition, Regulation M may restrict the ability of any person engaged in the distribution of the common stock to engage in market-making activities with respect to the particular shares being distributed. This may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect to the shares.
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The Company intends to maintain the currency and accuracy of this prospectus for a period of up to two years, unless earlier completely sold, pursuant to Rule 415 of the General Rules and Regulations of the Securities and Exchange Commission.
Resales of the Shares under State Securities Laws
The National Securities Market Improvement Act of 1996 (“NSMIA”) limits the authority of states to impose restrictions upon resales of securities made pursuant to Sections 4(a)(1) and 4(a)(3) of the Securities Act of companies which file reports under Sections 13 or 15(d) of the Exchange Act. Resales of the shares in the secondary market will be made pursuant to Section 4(a)(1) of the Securities Act (sales other than by an issuer, underwriter or broker).
LEGAL MATTERS
The validity of the shares of common stock offered under this prospectus is being passed upon for us by Brian Higley, Esq. of Business Legal Advisors, LLC, Draper, Utah.
EXPERTS
Our financial statements for the years ended March 31, 2021 and 2020 were audited by Hayne & Company, and are included in reliance upon such reports given upon the authority of Hayne & Company, as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed a registration statement on Form S-1 under the Securities Act (SEC File No. 333-_________) relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of Monetiva Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the SEC.
Upon the effective date of the registration statement of which this prospectus is a part, we will be required to file reports and other documents with the SEC. We do not presently intend to voluntarily furnish you with a copy of our annual report. You may read and copy any materials we file with the SEC at the public reference room of the SEC at 100 F Street, NE., Washington, DC 20549, between the hours of 10:00 a.m. and 3:00 p.m., except federal holidays and official closings, at the Public Reference Room. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to you on the Internet website for the SEC at http://www.sec.gov.
41 |
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of BlueOne Card, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of BlueOne Card, Inc. (the Company) as of March 31, 2021 and 2020, and the related statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended March 31, 2021, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern. As described in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operating activities, and not generated any revenues since inception that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustmentadjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ SS Accounting & Auditing, Inc. | |
We have served as the Company’s auditor since 2020 | |
Plano, Texas | |
June 18, 2021 |
|
Cost
BLUEONE CARD, INC.
BALANCE SHEETS
March 31, 2021 | March 31, 2020 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 340,502 | $ | - | ||||
Prepaid deposits | 155,072 | 8,700 | ||||||
Total Current Assets | 495,574 | 8,700 | ||||||
Property and Equipment, net | 164,173 | 105,018 | ||||||
Total Assets | $ | 659,747 | $ | 113,718 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accrued liabilities | $ | 27,498 | $ | 19,181 | ||||
Related party payables | 100,211 | 56,277 | ||||||
Customer deposits | 20,000 | - | ||||||
Loan payable, current portion | 12,212 | - | ||||||
Total Current Liabilities | 159,921 | 75,458 | ||||||
Loan payable, non-current portion | 56,458 | - | ||||||
Total Liabilities | 216,379 | 75,458 | ||||||
Commitments and Contingencies | - | - | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, $ par value; shares authorized, shares and shares issued and outstanding as of March 31, 2021 and March 31, 2020, respectively | 292 | 300 | ||||||
Common stock, $ par value; shares authorized, shares and shares issued and outstanding at March 31, 2021 and March 31, 2020, respectively | 9,890 | 19 | ||||||
Additional paid in capital | 1,042,172 | 371,035 | ||||||
Accumulated deficit | (608,986 | ) | (333,094 | ) | ||||
Total Stockholders’ Equity | 443,368 | 38,260 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 659,747 | $ | 113,718 |
The accompanying notes are an integral part of Salesthese financial statements.
Our cost
F-3 |
BLUEONE CARD, INC.
STATEMENTS OF OPERATIONS
2021 | 2020 | |||||||
For the Year Ended March 31, | ||||||||
2021 | 2020 | |||||||
Net Revenues | $ | - | $ | - | ||||
Operating Expenses | ||||||||
Legal and filing fees | 17,231 | 11,068 | ||||||
Rent | 38,591 | 43,500 | ||||||
General and administrative | 216,473 | 40,965 | ||||||
Total Operating Expenses | 272,295 | 95,533 | ||||||
Loss from Operations | (272,295 | ) | (95,533 | ) | ||||
Other Income (Expense) | ||||||||
Interest expense | (3,597 | ) | (241 | ) | ||||
Total Other Income (Expense) | (3,597 | ) | (241 | ) | ||||
Loss before Income Taxes | (275,892 | ) | (95,774 | ) | ||||
Provision for Income Tax | - | - | ||||||
Net Loss | $ | (275,892 | ) | $ | (95,774 | ) | ||
Basic and Diluted Net Loss Per Share | $ | (0.06 | ) | $ | (5.47 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted | 4,615,160 | 17,509 |
The accompanying notes are an integral part of sales from our inceptionthese financial statements.
F-4 |
BLUEONE CARD, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
For the Years ended March 31, 2021 and 2020
Shares | Amount | Shares** | Amount** | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
Preferred Stock | Common Stock ** | Additional Paid-in | Accumulated | Total Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
Balance - March 31, 2019 | - | $ | - | 16,600 | $ | 17 | $ | 237,033 | $ | (237,320 | ) | $ | (270 | ) | ||||||||||||||
Sale of common stock | - | - | 2,500 | 2 | 124,998 | - | 125,000 | |||||||||||||||||||||
Series A Preferred Stock issued in settlement of debt | 300,000 | 300 | - | - | 7,267 | - | 7,567 | |||||||||||||||||||||
Debt forgiveness by related party | - | - | - | - | 1,737 | - | 1,737 | |||||||||||||||||||||
Conversion of preferred stock to common stock | ||||||||||||||||||||||||||||
Conversion of preferred stock to common stock, shares | ||||||||||||||||||||||||||||
Issuance of stock to officer as bonus | ||||||||||||||||||||||||||||
Issuance of stock to officer as bonus, shares | ||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | (95,774 | ) | (95,774 | ) | |||||||||||||||||||
Balance - March 31, 2020 | 300,000 | 300 | 19,100 | 19 | 371,035 | (333,094 | ) | 38,260 | ||||||||||||||||||||
Conversion of preferred stock to common stock | (8,000 | ) | (8 | ) | 8,000,000 | 8,000 | (7,992 | ) | - | - | ||||||||||||||||||
Issuance of stock to officer as bonus | - | - | 1,000,000 | 1,000 | - | - | 1,000 | |||||||||||||||||||||
Sale of common stock | - | - | 870,600 | 871 | 679,129 | - | 680,000 | |||||||||||||||||||||
Fraction shares issued due to reverse stock split | - | - | 375 | - | - | - | - | |||||||||||||||||||||
Net loss | - | - | - | - | - | (275,892 | ) | (275,892 | ) | |||||||||||||||||||
Balance - March 31, 2021 | 292,000 | $ | 292 | 9,890,075 | $ | 9,890 | $ | 1,042,172 | $ | (608,986 | ) | $ | 443,368 |
** | Common stock adjusted to reflect 1:100 reverse stock splits effected on October 15, 2019 and June 30, 2020. |
The accompanying notes are an integral part of these financial statements.
F-5 |
BLUEONE CARD, INC.
STATEMENTS OF CASH FLOWS
2021 | 2020 | |||||||
For the Year Ended March 31, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net Loss | $ | (275,892 | ) | $ | (95,774 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 38,836 | 7,501 | ||||||
Stock compensation to officer | 1,000 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Increase in prepaid deposits | (146,372 | ) | (8,700 | ) | ||||
Increase in accrued liabilities | 8,317 | 19,181 | ||||||
Increase in customer deposits | 20,000 | - | ||||||
Increase in related party payables | 43,934 | 65,311 | ||||||
Net Cash Used In Operating Activities | (310,177 | ) | (12,481 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash paid for purchase of property and equipment | (19,500 | ) | (112,519 | ) | ||||
Net Cash Used In Investing Activities | (19,500 | ) | (112,519 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Cash proceeds from sale of common stock | 680,000 | 125,000 | ||||||
Cash paid for note payable | (9,821 | ) | - | |||||
Net Cash Provided By Financing Activities | 670,179 | 125,000 | ||||||
Net Increase in Cash | 340,502 | - | ||||||
Cash - Beginning of the Period | - | - | ||||||
Cash - End of the Period | $ | 340,502 | $ | - | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS | ||||||||
Cash paid for interest | $ | 3,597 | $ | 241 | ||||
cash paid for income taxes | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURES ON NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Purchase of vehicle by execution of a promissory note | $ | 78,491 | $ | - | ||||
Conversion of preferred stock into common stock | $ | 8,000 | $ | - | ||||
Issuance of Series A Preferred Stock in debt settlement | $ | - | $ | 7,567 | ||||
Forgiveness of debt | $ | - | $ | 1,737 |
The accompanying notes are an integral part of these financial statements.
F-6 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN
BlueOne Card, Inc. (formerly known as Avenue South Ltd., TBSS International, Inc., Manneking Inc. or the “Company”), was incorporated on July 6, 2007 under the laws of the state of Nevada. The Company started its business as a retailer and importer of domestic home furnishings from Hong Kong. On September 30, 2011, the Company changed its name to March 31, 2010TBSS International, Inc., which was $10,276.engaged in gold mining and drilling and general construction. On April 26, 2019, Corporate Compliance, LLC filed a re-application for custodianship pursuant to NRS 78.347. The Eighth Judicial District Court of Clark County, Nevada granted custodianship over TBSS International, Inc. to Corporate Compliance, LLC. On October 15, 2019, the Company changed its name to Manneking Inc., and then on June 30, 2020 changed to BlueOne Card, Inc.
Our cost
Basis of sales was $10,000 for the year ended March 31, 2010 compared to $276 for the year ended March 31, 2009. Presentation
The increaseaccompanying financial statements have been prepared in accordance with accounting principles generally accepted in the costUnited States of salesAmerica (“GAAP”) and include the accounts of the Company. The financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. In the year endedopinion of the Company’s management, the financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.
Risk and Uncertainty Concerning COVID-19 Pandemic
In March 31, 2010 was due2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to our increase in revenue forspread throughout the year ended March 31, 2010 as we were ableUnited States and the World. We are currently monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to sell our entire existing inventory on handbehaviour intended to our major customer, which generatedreduce its spread. If the $13,500 of revenue for the year ended March 31, 2010. We generated total cost of sales from our predecessor operations of $8,675 from February 15, 2005 (predecessor inception)coronavirus continues to July 5, 2007.
Gross Profit
Our gross profit from our inception on July 6, 2007 to March 31, 2010 was $3,934.
Our gross profit was $3,500 for the year ended March 31, 2010 compared to $141 for the year ended March 31, 2009. The increase in the gross profit for the year ended March 31, 2010 was due to our increase in revenue for the year ended March 31, 2010. Our gross profit margin decreased from approximately 34% for the year ended March 31, 2009 to 26% for the year ended March 31, 2010. This decrease in gross margin is due to the change in our customer mix, all sales were to a wholesale distributor for the year ended March 31, 2010 while all sales for the year ended March 31, 2009 was to retail customers. We generated total gross profit from our predecessor operations of $2,112 from February 15, 2005 (predecessor inception) to July 5, 2007. We expect our future gross profit margins to continue to be in the range of 15% to 25% as we continue to seek new business from wholesale distributors of home furnishing products.
Expenses
From July 6, 2007 (inception) to March 31, 2010, our total expenses were $11,724. These total expenses since inception to March 31, 2010 were for general and administrative expenses which consisted of charges for website maintenance and credit card fees, bank charges, office maintenance, communication expenses, courier, postage, office supplies, and travel. Our expenses were $2,292 for the year ended March 31, 2010 compared to $7,914 for the year ended March 31, 2009. The decrease in the expenses for the year ended March 31, 2010 was due to our decrease costs incurred for travel expenses and other general and administrative expenses for the year ended March 31, 2010. We generated total expenses from our predecessor operations of $40,024 from February 15, 2005 (predecessor inception) to July 5, 2007.
Net Income (Loss)
Weprogress, it could have a net loss of $7,790 during the period from our inception on July 6, 2007 to March 31, 2010. We had net income of $1,208 during the year ended March 31, 2010 and a net loss of $7,773 during the same period in 2009. This increase in net income for the year ended March 31, 2010 is due to our sale to a Hong Kong wholesale distributor of home furnishings of $13,500, which resulted in a gross profit of $3,500. We generated a total net loss from our predecessor operations of $37,912 from February 15, 2005 (predecessor inception) to July 5, 2007.
Liquidity and Capital Resources as of June 30, 2010 and 2009
As of June 30, 2010, we had cash of $161,367, total assets of $161,367 and working capital of $49,157 compared to $123,420 in cash, $123,420 in assets and working capital of $11,210 as of March 31, 2010. As of June 30, 2010 we have an accumulated deficit of $4,843.
During the three months ended June 30, 2010 we had an increase in the net cash provided by financing activities of $37,947. We collected $35,000 of the financing from our March 28, 2010 private placement in June 2010. From our inception on July 6, 2007 to June 30, 2010, we have raised a total net amount of $161,367 in cash through financing activities.
During the three months ended June 30, 2010 we had net cash of $2,947 provided by our operating activities compared to $697 of cash used by our operating activities during the same period in 2009, an increase of $3,644. This is due to increase in our net income for the three months ended June 30, 2010 From our inception on July 6, 2007 to June 30, 2010 to we used net cash of $14,843 from our operating activities. During the year ended March 31, 2011, our total cash requirements may exceed our cash balances. Currently, we do not have sufficient cash in our bank accounts to cover our estimated expenses for the next 12 months if we expand our future operations and our related parties do not demand repayment of their loans. These loans are non-interest bearing and due on demand. We anticipate meeting our future cash requirements through a combination of equity and debt financing.
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Liquidity and Capital Resources as of March 31, 2010 and 2009
As of March 31, 2010, we had cash of $123,420, total assets of $123,420 and working capital of $11,210 compared to $2,237 in cash, $12,237 in assets and working capital of $10,002 as of March 31, 2009. As of March 31, 2010 we have an accumulated deficit of $7,790.
During the year ended March 31, 2010 we had an increase in the net cash provided by financing activities of $103,975 as compared to the year ended March 31, 2009. We raised $109,975 of financing through non-interest bearing advances from our principal stockholder and director, compared to a repayment of advances from our principal stockholder of $3,000 for the year ended March 31, 2009, an increase in advances from our related parties of $112,975. This increase in advances from related parties was offset by a decrease in funds raised during the year ended March 31, 2010 from the issuance of our common shares, of $9,000. From our inception on July 6, 2007 to March 31, 2010, we have raised a total net amount of $141,210 in cash through financing activities.
During the year ended March 31, 2010 we had net cash of $11,208 provided by our operating activities compared to $7,773 of cash used by our operating activities during the same period in 2009, an increase of $18,981. This is due to increase in our revenue and net income for the year ended March 31, 2010 of $8,981 and a decrease in our inventory of $10,000. From our inception on July 6, 2007 to March 31, 2010 to we used net cash of $17,790 from our operating activities. During the year ended March 31, 2011, our total cash requirements may exceed our cash balances. Currently, we do have sufficient cash in our bank accounts to cover our anticipated expenses for the next 12 months if we do not expand our future operations and our related parties do not demand repayment of their loans, which are non-interest bearing and due on demand. We anticipate meeting our future cash requirements through a combination of equity and debt financing.
It may take several years for us to fully realize our business plan.
We estimate that our expenses over the next 12 months (beginning July 2010) will be approximately $160,000 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.
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We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. There is no assurance that any financing will be available or if available, on terms that will be acceptable to us. We may not raise sufficient funds to fully carry out any business plan.
We will also incur certain legal and accounting costs associated with the public reporting obligations in conjunction with becoming a public reporting company.
Off-Balance Sheet Arrangements
As of the date of this Report, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effectmaterial negative impact on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Inflation
The effect of inflation on our revenues and operating results has not been significant.
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Critical Accounting Policies
Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete listing of these policies is included in Note 2 of the notes to our financial statements for the years ended March 31, 2010 and 2009 and from date of inception (July 6, 2007) to March 31, 2010 and for the three months ended June 30, 2010 and 2009. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which requireflow, in addition to the applicationimpact on its employees. We have concluded that while it is reasonably possible that the virus could have a negative impact on the results of significant judgment by management.operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actualreporting period. The Company regularly evaluates estimates and assumptions related to the valuation of its assets, accounts payable, accrued liabilities and payable to related party. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
F-7 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN (CONTINUED)
Going Concern
The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. The Company has not yet generated any revenue and has suffered operating losses since July 6, 2007 (Inception Date) to date and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company recorded a net loss of $275,892 for the year ended March 31, 2021, used net cash flows in operating activities of $310,177, and has an accumulated deficit of $608,986 as of March 31, 2021. These factors, among others, raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could differbe forced to cease operations. The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Company’s financial statements. These accounting policies conform to GAAP in all material respects and have been consistently applied in preparing the accompanying financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company did 0t have any cash equivalents as of March 31, 2021 and 2020, respectively.
Property and Equipment
Property and equipment are recorded at cost, less accumulated depreciation. The Company provides for depreciation on a straight-line basis over the estimated useful lives of the assets which range from those estimates.five to seven years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets when they are placed into service. The Company evaluates property and equipment for impairment periodically to determine if changes in circumstances or the occurrence of events suggest the carrying value of the asset or asset group may not be recoverable. Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized.
Long-lived Assets
The Company tests long-lived assets or asset groups for recoverability in accordance with US GAAP, when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the estimated future undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss equal to the excess of the carrying value over the assets fair market value is recognized when the carrying amount exceeds the undiscounted cash flows. The impairment loss is recorded as an expense and a direct write-down of the asset. NaN impairment loss was recorded during the years ended March 31, 2021 and 2020, respectively.
The Company computes earnings (loss) per share in accordance with Accounting Standards Codification (“ASC”) ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. The Company computes Basic EPS by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At March 31, 2021 and 2020, there were 0 convertible notes, options or warrants available for conversion that if exercised, may dilute future earnings per share.
F-8 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
The Company has operating leases for its offices. Management determines if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company consider it to be, or contain, a lease.
The Company records a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities include renewal and termination options that are reasonably certain to be exercised. Leases with an initial term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of prepaid deposits and accrued liabilities. The Company believes that the recorded values of all the financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
F-9 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company accounts for equity-based transactions with non-employees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). The Company has established that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.
The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718, Compensation—Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized ratably over the requisite service period.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
F-10 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements
In December 2019, the (“FASB”) issued ASU Update 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 eliminates certain exceptions within ASC 740, “Income Taxes,” and clarifies certain aspects of ASC 740 to promote consistency among reporting entities. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company elected adoption of this standard on its financial statements and related disclosures effective January 1, 2021.
In May 2009,March 2020, the FASB issued new guidanceASU 2020-04, “Facilitation of ASC 855 “Subsequent Events”the Effects of Reference Rate Reform on the treatment of subsequent events which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, management of a reporting entity is required to evaluate subsequent events through the date that financial statements are issued and disclose the date through which subsequent events have been evaluated, as well as the date the financial statements were issued. This new guidance was effective for fiscal years and interim periods ended after June 15, 2009, and must be applied prospectively. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2009, the FASB issued an Accounting Standards Update (“ASU”) No.2009.05 regarding measuring liabilities at fair value.Financial Reporting.” This ASU provides additional guidance clarifyingoptional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the measurement of liabilities at fair value in circumstances in which a quoted price in an active market forLondon Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the identical liability isamendments do not available; under those circumstances, a reporting entity is requiredapply to measure fair value using onecontract modifications made and hedging relationships entered into or more of valuation techniques, as defined. This ASU is effective for the first reporting period, including interim periods, beginningevaluated after the issuance of this ASU. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
December 31, 2022. The Company does not expect thatthe adoption of recently issued accounting pronouncements willASU 2019-12 to have a material impact on its financial position, resultsstatements.
NOTE 3 – PREPAID DEPOSITS
Prepaid deposits consisted of operations or cash flows.the following:
CORPORATE STRUCTURESCHEDULE OF PREPAID DEPOSITS
March 31, 2021 | March 31, 2020 | |||||||
Prepaid rent | $ | 5,759 | $ | 8,700 | ||||
Prepaid cards inventory | 49,313 | - | ||||||
Prepaid Business Identification Number | 100,000 | - | ||||||
Prepaid automobile lease payment | - | |||||||
Total | $ | 155,072 | $ | 8,700 |
NOTE 4 – PROPERTY AND HISTORYEQUIPMENT
Our Background
Property and Historyequipment, stated at cost, consisted of the following:
We were incorporated on July 6, 2007 in the State of Nevada
SCHEDULE OF PROPERTY AND EQUIPMENT
Estimated Life | March 31, 2021 | March 31, 2020 | ||||||||
Furniture and Fixtures | 5 years | $ | 112,519 | $ | 112,519 | |||||
Vehicle | 5 years | 97,991 | - | |||||||
Property and equipment, gross | 210,510 | 112,519 | ||||||||
Less: Accumulated depreciation | (46,337 | ) | (7,501 | ) | ||||||
Total | $ | 164,173 | $ | 105,018 |
Depreciation expense amounted to $38,836 and $7,501 for the sole purpose of acquiring Avenue South, Inc.years ended March 31, 2021 and becoming a holding company. We have no operations except for those of our sole subsidiary, Avenue South, Inc. Avenue South, Inc. was incorporated on February 15, 2005 in the State of North Carolina for the purpose of engaging in the business of online sales of imported and domestic distinctive art reproductions, collectibles and home décor items.2020, respectively.
Our President, Irina Goldman, acquired Avenue South, Inc. on July 6, 2007, from David F. Ruppen, the former owner of Avenue South, Inc., for a cash purchase price of $10,000. Immediately thereafter, on the same day, July 6, 2007, Irina Goldman, our company and Avenue South, Inc. entered into a share exchange agreement, or Share Exchange Agreement, pursuant to which Ms. Goldman exchanged her one share of Avenue South, Inc. for 2,000,000 shares of our company. Upon the consummation of the transactions contemplated by the Share Exchange Agreement, Irina Goldman became our sole stockholder and Avenue South, Inc. became our wholly-owned subsidiary. Our predecessor operations are for the period February 15, 2005 to July 5, 2007. Our successor operations are from July 6, 2007 to date.
Private Placement
On March 28, 2010, we completed a private placement in which we issued and sold to the selling stockholders and certain other investors an aggregate of 1,750,000 shares of our common stock, for an aggregate purchase price of $35,000, or $0.02 per share. As a result of this private placement, we raised approximately $35,000 in gross proceeds, which left us with approximately $35,000 in net proceeds after the deduction of offering expenses in the amount of $0. We have a contractual obligation, under a Registration Rights agreement we entered into with the investors from the private placement on March 28, 2010, to register the shares of our common stock sold in this private placement.
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BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 5 – RELATED PARTY TRANSACTIONS
The following presents our current corporate structure:
DESCRIPTION OF OUR BUSINESS
Overview
We are a web-based retailer of domestic distinctive art reproductions, collectibles and home décor items. We sell our products through our website www.avenuesouth.com and through an informal relationship with a home furnishing distributor in Hong Kong. We do not have any stores or outlets. We believe that the products we sell are relatively unique because they are not readily available at retail outlets.
We acquire our product inventory from several wholesale vendors. We do not manufacture any of our own products. We have not entered into any formal supply agreements with these vendors. We are required to pay in full for product inventory purchased from these vendors upon delivery. We also offer other vendors, or link partners, who would like to sell their products on our website the opportunity to send us their URL address to add to our website so that our existing customers can view their products and purchase their inventory through a weblink from our website. Any sales referred to our link partners from us, we would obtain a sales commission. We are currently marketing our link partner program to other vendors and have not yet generated any revenue from our link partner program to date.
We are a development stage company. To date, we have only generated nominal revenues and have undertaken only limited operations. In March 2010, we sold $13,500 worth of our products, which constituted our entire inventory at the time, to our major customer, a home furnishing distributor in Hong Kong. We do not plan to hold any inventory in the future. We will seek to develop a relationship with our major customer so that we can continue to distribute the products that we sell through our major customer. We will also seek to develop relationships with other home furnishing distributors in the United States and Hong Kong in order to increase our products sales and distribution base.
Our Industry
We operate in the internet home furnishings industry. We face competition from many websites that provide products and services that are similar to ours. We believe that www.homedecorators.com, www.homefurnishingsoutlet.net and www.homegoods.com are some of our biggest competitors. Some industry references regarding the home decorative market are shown below:
"The home market has been transformed from a largely functional to a fashion business, thus allowing consumers to dress and decorate their houses like they dress and accessorize themselves. Consumers are wanting products that reflect their tastes, values and sensibilities." Source: Unity Marketing, The Home Report 2001: The Market, The Competitors, The Trends
"In the past two years consumers spent more money on home furnishings than they did on clothes. Consumers are not just striving to make their homes more ‘beautiful,’ rather they are seeking decorative items that can positively impact the mood and emotional climate of their home." Source: Unity Marketing, The Gifts and Decorative Accessories Report 2001: The Market, The Industry, The Trends
We believe that these above industry factors will contribute to an increased need for home decorating accessories.
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Our Competitive Strengths
We believe that we have the following competitive strengths:
Our Growth Strategy
We will implement the following strategic plans to take advantage of industry opportunities and our competitive strengths:
Products
We sell, at retail, a variety of home furnishings décor, art reproductions, various hand-made ceramics, candles, lamps and similar accessory items.
We maintain over 500 items in our supply chain and periodically review, add and drop products based upon the demand in the marketplace and product availability.
Our products include clocks, penny rugs and runners, candles and candle lamps, Tin Woodsman pewter products, religious reproductions, including Celtic art, and ancient reproductions, including reproductions of art from Egyptian, pre-Columbian, and Greek times.
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We have never experienced any significant difficulty in obtaining quality merchandise in adequate volumes and at suitable prices.
We currently secure our merchandise mostly on a purchase order basis from various wholesale vendors with whom we have established relationships. We plan to maintain and foster such relationships and to establish and foster new relationships with additional wholesale vendors. We expect to meet new vendors through word of mouth introductions, trade shows, and through searches on the internet.
Payments are generally made to vendors by credit card and, if possible, shipped per our request to customers who themselves have provided us their credit card information. In this way, we are trying to limit the amount of inventory we need to carry.
We currently work with approximately 15 different suppliers. No individual supplier is material to our business, since there are a number of alternative suppliers available to supply products to us.
Distribution Methods
We sell directly over the internet though our website www.avenuesouth.com. We also sell products through our major customer, which is a Hong Kong based distributor that re-sells our products to the Hong Kong market.
Our margins are higher when we sell our products directly through our website than when we sell them through our major customer because we are required to give our major customer an approximate 40% discount off the retail price we charge to customers who purchase our products though our website in order to give more incentive to our major customer to sell more of our products. This approximate 40% discount to our major customer may increase in future periods if our sales volume to our major customer increases. We may enter into a formal distribution agreement with our major customer and other distributors at a future date.
We plan to develop relationships with distributors in the U.S. and in Hong Kong that will help us increase our domestic and international sales.
Intellectual Property
We own our domain name AvenueSouth.com but do not have any trademarks or tradenames or any other significant intellectual property.
Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet. In addition, laws and regulations relating to user privacy, freedom of expression, content, advertising, information security and intellectual property rights are being debated and considered for adoption by many countries throughout the world. We face risks from some of the proposed legislation that could be passed in the future.
In the US, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, which include actions for libel, slander, invasion of privacy and other tort claims, unlawful activity, copyright and trademark infringement and other theories based on the nature and content of the materials searched, the ads posted or the content generated by users. Certain foreign jurisdictions are also testing the liability of providers of online services for activities of their users and other third parties. Any court ruling that imposes liability on providers of online services for activities of their users and other third parties could harm our business.
A range of other laws and new interpretations of existing laws could have an impact on our business. For example, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for listing, linking or hosting third-party content that includes materials that infringe copyrights. In the area of data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as California’s Information Practices Act. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities.
In Hong Kong, there are import and export custom laws but they do not have an impact on our business as they do not prohibit us from shipping our merchandise to Hong Kong. The Hong Kong Import and Export declaration charges are not significant, the first $5,900 shipped to Hong Kong from the United States (Hong Kong dollars $46,000) we are required to pay $0.06 (Hong Kong dollars of $0.5) and for each additional $128 (Hong Kong dollars $1,000) or less, payment of $0.03 (Hong Kong dollars $0.25).
Employees
We currently have two officers, our president, Irina Goldman, and ourCompany’s Chief MarketingExecutive Officer Ms. Ngai. Neither of our officers are compensated for the services that they provide at this time, but may be compensated in the future. We expect to employ 1 part time consultant engaged in administrative tasks and software development sometime later in 2010 or in 2011.
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DESCRIPTION OF PROPERTY
Our principal office is located at 5 Victory Road, Suffern NY. We use these premises rent free. The premises are owned by our President, Irina Goldman. We do not have any written agreement with Ms. Goldman regarding our use of the premises and Ms. Goldman may require us to vacate these premises at any time. Currently, this location serves as the administrative office for us. We believe that the rent-free space will be sufficient for our needs for at least the next 12 months, or until such time where company growth necessitates the need to find larger office space.
LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise(“CEO”), from time to time, that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
MANAGEMENT
Directors and Executive Officers
The following table sets forth the name and position of each of our current executive officers and directors.
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Irina Goldman, President, Secretary, Principal Accounting Officer and Director
Irina Goldman has been our President, Secretary, Principal Accounting Officer and Director since our inception on July 6, 2007. Ms. Goldman also holds the same positions with our subsidiary, Avenue South, Inc. since 2007. Although Ms. Goldman does not have any work experience prior to 2007, and lacks retail and internet sales work experience, she has worked with us since July 6, 2007 (approximately 3 years) developing our business model, sourcing new vendors, working with many of our current vendors and selling our products. She was responsible for overseeing the design and implementation of our website www.avenuesouth.com as well as sourcing many of our products and vendors. Ms. Goldman graduated from Columbia University in 1983 with a Masters Degree in Engineering.
Fung Chun Ngai, Vice President of Sales , Treasurer and Director
Ms. Ngai was appointed as Vice President Sales and Director on March 28, 2010. For the past 5 years, Ms. Ngai worked with Maxfirm Industrial Ltd. as Marketing and Finance manager. She has more than 10 years experience in finance and marketing housewares and other products for households and its major customer was Li & Fung Ltd., a HK listed company, engaged in the retail business with global sales network. She is responsible for our marketing and promotion of our Art products for home décor and will focus on enhancing our distribution networks in Hong Kong. Ms.Ngai, who resides in Hong Kong full time, was able to introduce us to our major customer in Hong Kong and will continue marketing our products to our major customer and other Hong Kong distributors.
There are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.
Directors are elected until their successors are duly elected and qualified.
Family Relationships
There are no family relationships among our directors or officers.
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Involvement in Certain Legal Proceedings
None of our directors or executive officers has, during the past ten years:
Except as set forth in our discussion below in “Transactions with Related Persons, Promoters and Control Persons; Director Independence,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuantprovided advances to the rules and regulations of the SEC.
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SummaryCompensation Table - Fiscal Years EndedCompany for its working capital purposes. At March 31, 20102021 and 2009
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid2020, the Company had a payable to the named persons for services rendered in all capacities during the noted periods. No other executive officers received total annual salaryCEO of $100,211 and bonus compensation in excess of $100,000.
Name and Principal Position | Year | Salary ($) | Total ($) |
Irina Goldman (2) | 2010 | 0 | 0 |
2009 | 0 | 0 | |
Fung Chun Ngai (3) | 2010 | 0 | 0 |
2009 | 0 | 0 |
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Option Grants
We did not grant any options or stock appreciation rights to our named executive officers or directors from our inception (July 6, 2007) to July 1, 2010. As of July 1, 2010 we did not have any stock option plans.
Management or Employment Agreements
We have not yet entered into any consulting or management agreements with any of our directors or officers
Compensation of Directors
Our directors did not receive any compensation for their services as directors from our inception to the date of this prospectus. We have no formal plan for compensating our directors for their services in the future in their capacity as directors, although such directors are expected in the future to receive options to purchase shares of our common stock as awarded by our Board of Directors or by any compensation committee that may be established.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We do not currently have a compensation committee of the Board of Directors or a committee performing similar functions.$56,277, respectively. The Board of Directors as a whole participates in the consideration of executive officer and director compensation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the ownership, as of July 1, 2010 of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of July 1, 2010, there were 4,200,000 shares of our common stock issued and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this prospectus.
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Common | Irina Goldman (1) | ||
Stock | 5 Victory Road, | 2,450,000 | 58.3 |
Suffern, NY 10901 | |||
Common | Fung Chun Ngai (2) | ||
Stock | 12/F, 99 Hennessy Road | 0 | 0 |
Wan Chai, Hong Kong |
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Changes in Control
As of July 1, 2010 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of termination of employment or a change in our control.
Certain Relationships and Related Transactions
As of March 31, 2010, our debt to related parties totaled $112,210 which included $77,235 due to Irina Goldman, our President, Principal Accounting Officer, Secretary and director, for loans made to us and $34,975 due to Fung Chun Ngai, our Treasurer, Vice President Sales and Director, for loans made to us. These loans are oral agreements and the amounts duefunds advanced are unsecured, non-interest bearing, and due on demand.
Stock transactions with related party
On July 6, 2007, our principal stockholder acquired 100%September 30, 2020, the CEO converted shares of issued and outstanding Series A Preferred Stock of the equityCompany into shares of Avenue South, Inc.,common stock pursuant to the conversion terms of its Certificate of Designation filed with the Secretary of State of Nevada (Note 8).
JulyDecember 22, 2020, the Company issued shares of its common stock valued at $1,000 as an inducement (sign on bonus) to enter into the employment agreement (Note 8).
NOTE 6 2007, Avenue South Ltd., a Nevada corporation was formed by our principal stockholder Irina Goldman and our principal stockholder– LOAN PAYABLE
On June 16, 2020, the Company entered into a financing arrangement to purchase a vehicle, and obtained a loan of $78,491, payable over a term of 72 months, interest bearing at 3.99%, with a monthly payment of principal and interest of $1,228.
SCHEDULE OF LOAN PAYABLE
March 31, 2021 | March 31, 2020 | |||||||
Loan payable | $ | 68,670 | $ | - | ||||
Less: Current portion | (12,212 | ) | - | |||||
Loan Payable - Non-current portion | $ | 56,458 | $ | - |
The amount of loan payments due in the next five years ended March 31, are as follows:
SCHEDULE OF MATURITIES OF LOAN PAYMENTS
2022 | $ | 12,212 | |||
2022 | 12,699 | ||||
2023 | 13,231 | ||||
2024 | 13,762 | ||||
2025 | 14,321 | ||||
2026 | 2,445 | ||||
Therafter | |||||
Total | $ | 68,670 |
The Company recorded interest expense on the loan of $2,455 and $0 for the years ended March 31, 2021 and 2020, respectively.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Office Lease
On October 30, 2019, the Company executed a non-cancellable operating lease for its principal office with the lease commencing November 1, 2019 for a period of 6 months and maturing on April 30, 2020. The Company paid a security deposit of $8,700 at the inception of the lease. The monthly rent of the lease was $8,700. The Company has recorded rent expense of $8,700 and $43,500 for this non-cancellable lease for its principal office for the years ended March 31, 2021 and 2020, respectively.
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. The Company has recorded rent expense of $2,391 and $0 for the years ended March 31, 2021 and 2020, 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 $55,000 on October 28, 2020. The Company has recorded rent expense of $27,500 and $0 for the years ended March 31, 2021 and 2020, respectively.
The Company has recorded total rent expense of $38,591 and $43,500 for the years ended March 31, 2021 and 2020, respectively.
As of March 31, 2021, total future minimum annual lease payments under the operating lease were as follows:
SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS
For the years ended: | Amount | |||
March 31, 2022 | $ | 38,500 | ||
March 31, 2023 | - | |||
March 31, 2024 | - | |||
March 31, 2025 | - | |||
March 31, 2026 | - | |||
Total | $ | 38,500 |
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 has elected to record the rent expense on a straight-line basis ratably over the term of the lease.
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 March 31, 2021 and 2020, respectively.
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BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 8 – STOCKHOLDERS’ EQUITY
The Company’s capitalization at March 31, 2021 and 2020 was exchangeand authorized preferred shares with a par value of $ per share. authorized common shares with a par value of $ per share,
On June 30, 2020, the Company effected a reverse stock split (the “Reverse Split”) of its issued and outstanding common stock (the “Equity Instrument”). As a result of the Reverse Split, each (100) units of Equity Instrument issued and outstanding prior to the Reverse Split were converted into one (1) unit of Equity Instrument. The Reverse Split did not change the number of authorized shares or the par value of its common stock or preferred stock.
Common Stock
On April 25, 2020, an investor executed a stock subscription agreement to purchase 30,000 to the Company on April 25, 2020. The Company has issued shares of common stock to the investor on April 28, 2020. shares of common stock of the Company at $ per share. The investor paid $
On September 1, 2020, an investor executed a stock subscription agreement to purchase 200,000 to the Company on September 1, 2020. The Company issued shares of common stock to the investor on September 9, 2020, and the remaining shares of common stock were issued on September 15, 2020. shares of common stock of the Company at $ per share. The investor paid $
On September 30, 2020, the Chief Executive Officer of the Company converted which all the conversion terms of its Certificate of Designation filed with the Secretary of State of Nevada. shares of issued and outstanding Series A Preferred Stock of the Company into shares of common stock pursuant to
On December 1, 2020, the Company entered into an employment agreement with its Chief Executive Officer for a three-year term, for an annual compensation of $150,000. On December 22, 2020, the Company issued shares of its common stock held by our principal stockholder in Avenue South, Inc. was acquired by Avenue South Ltd. by issuing 2 millionvalued at $1,000 as an inducement (sign on bonus) to enter into the employment agreement (Note 5).
On December 9, 2020, the Company sold 15,000. The Company issued the common shares to our principal stockholder. Avenue South Ltd. then became the parent corporation owning 100% of Avenue South, Inc.investor on December 22, 2020. shares of its common stock to an investor at a purchase price of $ per share, and received a cash consideration of $
Private Placement
On December 17, 2008,21, 2020, the Company sold shares of its common stock to an investor at a purchase price of $ per share for a consideration of $5,000. The investor executed the stock subscription agreement on December 21, 2020. The Company issued 450,000the common shares on December 22, 2020, and received the cash consideration of $5,000 on December 21, 2020, and the remaining $5,000 on January 6, 2021, for the sale common stock.
On December 23, 2020, the Company sold 10,000. The investor executed the stock subscription agreement on December 23, 2020. The Company issued the common shares on December 29, 2020, and received the cash consideration of $10,000 on January 11, 2021, for the sale common stock. shares of its common stock to an investor at a purchase price of $ per share for a consideration of $
On December 23, 2020, the Company sold 100,000. The Company issued the common shares to the investor on December 29, 2020. shares of its common stock to an investor at a purchase price of $ per share, and received a cash consideration of $
On December 23, 2020, the Company sold 300,000. The Company issued the common shares to the investor on December 29, 2020. shares of its common stock to an investor at a purchase price of $ per share, and received a cash consideration of $
On January 8, 2021, the Company sold 10,000. The investor executed the stock subscription agreement on January 8, 2021. The Company issued the common shares on January 20, 2021, and received the cash consideration of $10,000 between January 20, 2021 and January 26, 2021, for the sale common stock. shares of its common stock to an investor at a purchase price of $ per share for a consideration of $
On February 8, 2021, the Company sold 10,000. The investor executed the stock subscription agreement on February 8, 2021. The Company issued the common shares on February 10, 2021, and received the cash consideration of $10,000 on February 10, 2021, for the sale common stock. shares of its common stock to an investor at a purchase price of $ per share for a consideration of $
As a result of all common stock issuances, the total issued and outstanding shares of common stock were shares and shares as of March 31, 2021 and 2020, respectively.
Preferred Stock
The Board of Directors, without further approval of its stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series. Issuances of shares of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of our Common Stock and other series of Preferred Stock then outstanding.
Designation
There are
shares of Series A Convertible Preferred Stock designated and shares issued and outstanding as of March 31, 2021.Liquidation Rights
In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, after setting apart or paying in full the preferential amounts due to Holders of senior capital stock, if any, the Holders of Series A Preferred Stock and parity capital stock, if any, shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the Holders of junior capital stock, including Common Stock, an amount equal to $[the “Liquidation Preference”]. If upon such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation available for distribution to the Holders of the Series A Preferred Stock and parity capital stock, if any, shall be insufficient to permit in full the payment of the Liquidation Preference, then all such assets of the Corporation shall be distributed ratably among the Holders of the Series A Preferred Stock and parity capital stock, if any. Neither the consolidation or merger of the Corporation nor the sale, lease or transfer by the Corporation of all or a part of its assets shall be deemed a liquidation, dissolution or winding up of the Corporation for purposes of these Liquidation Rights.
per shareConversion Rights
Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the Holder, into 1,000 (one thousand) fully paid and non-assessable shares of the Corporation’s Common Stock.
Voting Rights
The Holders of shares of Series A Convertible Preferred Stock shall be entitled to vote on any and all matters considered and voted upon by the Corporation’s Common Stock. The Holders of the Series A Convertible Preferred Stock shall be entitled to 1,000 (one thousand) votes per share of Common Stock.
Stock Splits, Dividends and Distributions
If the Corporation, at any time while any Series A Convertible Preferred Stock is outstanding, (a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock payable in shares of its capital stock [whether payable in shares of its Common Stock or of capital stock of any class], (b) subdivide outstanding shares of Common Stock into a larger number of shares, (c) combine outstanding shares of Common Stock into a smaller number of shares. or (d) issue reclassification of shares of Common Stock for any shares of capital stock of the Corporation, the conversion ratio, as defined, shall be adjusted by multiplying the number of shares of Common Stock issuable by a fraction of which the numerator shall be the number of shares of Common Stock of the Corporation outstanding after such event and of which the denominator shall be the number of shares of Common Stock outstanding before such event. Any adjustment made pursuant to this paragraph (e)(iii) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
On July 31, 2019, the Company issued 7,567. The Former Officer loaned additional funds to the Company’s sole stockholder, at $0.02 per share, for total proceedsCompany totalling $1,737 which were forgiven by the Former Officer as of $9,000.
There are no family relationships between anySeptember 30, 2019 and deemed as additional paid-in capital. On October 7, 2019, an entity affiliated with the Former Officer of the directors and officers described in the preceding disclosure.
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Director Independence
Our securities are not listed on an exchange nor are they quoted on the OTC Bulletin Board. We will seek to have our common stock quoted on the OTC Bulletin Board in the future. The OTC Bulletin Board unlike national securities exchanges does not have any independent director requirements. Once we are listed on the OTC Bulletin Board we plan to engage more directors as well as plan to developCompany entered into a definition of independence and scrutinize our Board of Directors with regard to this definition.
Disclosure of Commission Position on Indemnification of Securities Act Liabilities
Under our Articles, we may indemnify any officer, director, employee or person serving us at our request and who, because of such person’s position, is made a party to any threatened, pending or completed civil or criminal proceeding or investigation, provided that such person acted in good faith and in a manner which he reasonably believed to be in our best interest or if such person had no reason to believe that his conduct was unlawful. To the extent that the officer, director, employee or other person is successful on the merits in a proceeding as to which such person is to be indemnified, we must indemnify such person against all expenses incurred, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connectionprivate transaction with the action, suit or proceeding if such person acted in good faith and in a manner which he reasonably believedCompany’s CEO to be in or not opposedsell shares of Series A Convertible Preferred Stock.
On September 30, 2020, the Company cancelled best interestsconversion terms of its Certificate of Designation filed with the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. shares of Series A Preferred Stock pursuant to the
Indemnification may not be made for any claim, issue or matter as to which such person has been adjudged by a courtSecretary of competent jurisdiction, after exhausting all appeals therefrom, to be liable to us or for any amount paid in settlement by us, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or officers under Nevada law, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Promoters and Certain Control Persons
Ms. Goldman and to a lesser extent Ms. Ngai are considered promoters under the Securities Act of 1933 as a result of their ownership, operation and control of the Company. As such, both Ms. Goldman and Ms. Ngai will have additional reporting and disclosure obligations and limitations on their ability to buy and sell the Company’s securities.
SELLING STOCKHOLDERS
This prospectus relates to the resale by the selling stockholders named below from time to time of up to a total of 1,750,000 shares of our commonThe cancelled preferred stock that were issued to the selling stockholders pursuant to transactions exempt from registration under the Securities Act. All of the common stock offered by this prospectus is being offered by the selling stockholders for their own accounts.
Private Placement
On March 28, 2010, we completed a private placement in which we issued and sold to the selling stockholders an aggregate of 1,750,000 shares of our common stock, for an aggregate purchase price of $35,000, or $0.02 per share. As a result of this private placement, we raised approximately $35,000 in gross proceeds, which left us with approximately $35,000 in net proceeds after the deduction of offering expenses in the amount of $0. The foregoing issuance was made in reliance upon exemptions provided by Rule 903 of Regulation S of the Securities Act. We were able to rely on Rule 903 because (a) the subscriber was neither a U.S. person nor acquiring the shares for the account or benefit of any U.S. person, (b) the subscriber agreed not to offer or sell the shares (including any pre-arrangement for a purchase by a U.S. person or other person in the U.S.) directly or indirectly, in the United States or to any natural person who is a resident of the United States or to any other U.S. person as defined in Regulation S unless registered under the Securities Act and all applicable state laws or an exemption from the registration requirements of the Securities Act and similar state laws is available, (c) the subscriber made his, her or its subscription from the subscriber’s residence or offices at an address outside of the U.S. and (d) the subscriber or the subscriber’s advisor has such knowledge and experience in financial and business matters that the subscriber is capable of evaluating the merits and risks of, and protecting his interests in connection with an investment in our company.
The selling security holders will sell their shares at an initial offering price of $0.05 per share until a market for our common shares develops on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. We have a contractual obligation under a Registration Rights Agreement we enteredconverted into with the selling security holders to register the shares of our common stock sold in the March 28, 2010 private placement.
The following table sets forth certain information regarding the selling stockholders and the shares offered by them in this prospectus. Beneficial ownership is determined in accordance with the rules of the SEC. Each selling stockholder’s percentage of ownership in the following table is based upon 4,200,000 shares of common stock outstanding as of July 1, 2010.per the conversion terms (Note 5).
All information with respect to share ownership has been furnished by the selling stockholders. The shares being offered are being registered to permit public secondary trading of the shares and each selling stockholder may offer all or part of the shares owned for resale from time to time. Furthermore, no selling stockholder is a registered broker-dealer or an affiliate of a registered broker-dealer.
For additional information, refer to “Security Ownership of Certain Beneficial Owners and Management” above.
The term “selling stockholders” also includes any transferees, pledges, donees, or other successors in interest to the selling stockholders named in the table below. To our knowledge, subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s name. We will file a supplement to this prospectus (or a post-effective amendment hereto, if necessary) to name successors to any named selling stockholders who are able to use this prospectus to resell the securities registered hereby.
Percentage | |||||
Beneficial | Owned | ||||
Shares Owned | Maximum Numbers | Ownership | upon | ||
Prior | of | After | Completion of | ||
Name of Selling | to this | Percent | Shares Being | Offering | the Offering |
Security Holder | Offering (#) | (%) | Offered(#) | (1) (#) | (2) (%) |
Sze Wai Chan | 200,000 | 4.8 | 200,000 | - | - |
Fuseta Limited (4) | 200,000 | 4.8 | 200,000 | - | - |
Chor Ying Ngai (3) | 200,000 | 4.8 | 200,000 | - | - |
All Good Foundation Limited (5) | 200,000 | 4.8 | 200,000 | - | - |
Kwai Chun Ngai (3) | 200,000 | 4.8 | 200,000 | - | - |
Kin Kwok Sham | 185,000 | 4.4 | 185,000 | - | - |
Fu Hoi Wong | 134,500 | 3.2 | 134,500 | - | - |
Yuen Fan Ng | 63,000 | 1.5 | 63,000 | ||
Shuk Ying Irene Lai | 38,000 | * | 38,000 | - | - |
Kwok Kwong Ng | 38,000 | * | 38,000 | - | - |
Chi Chun Ngai (3) | 38,000 | * | 38,000 | - | - |
Sze Wai Gary Yan | 38,000 | * | 38,000 | - | - |
Kam Chiu Chung | 28,000 | * | 28,000 | - | - |
Tsz Tat Ho | 15,000 | * | 15,000 | - | - |
Suk Kwan Lai | 14,000 | * | 14,000 | - | - |
Chi Kong Lai | 13,000 | * | 13,000 | - | - |
Chuen Tsang | 13,000 | * | 13,000 | - | - |
Kam Loi Lai | 12,500 | * | 12,500 | - | - |
Lai King Tang | 12,500 | * | 12,500 | - | - |
Hoi Yan Chan | 12,000 | * | 12,000 | - | - |
Aplus & Partners Corporate Services Limited (6) | 12,000 | * | 12,000 | - | - |
King Yu Lee | 12,000 | * | 12,000 | - | - |
Sik Cham Leung | 12,000 | * | 12,000 | - | - |
Ngan Hou Lou | 12,000 | * | 12,000 | - | - |
Pui Yue So | 12,000 | * | 12,000 | - | - |
Yan Fung So | 12,000 | * | 12,000 | - | - |
Ho Lam Yu | 12,000 | * | 12,000 | - | - |
Ka Ki Fong | 11,500 | * | 11,500 | - | - |
Total : | 1,750,000 | 1,750,000 | - | - |
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Common Stock
We are authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share of which we have 4,200,000 shares outstanding. Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that elections for directors shall be by a plurality of votes. Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock. Upon our liquidation, dissolution or winding up, and after payment of creditors, if any, our assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock.
The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In addition, our operating subsidiary, from time to time, may be subject to restrictions on its ability to make distributions to us, including as aAsa result of restrictive covenants in loan agreements, restrictions onall preferred stock issuances, the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.
All of the shares of common stock included in this prospectus are duly authorized, validly issued, fully paid and non-assessable To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.
Preferred Stock
We are not authorized to issue any preferred stock.
Anti-takeover Effects of Our Articles of Incorporation and Bylaws
Our articles of incorporation and bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing its board of directors and management. According to our bylaws and articles of incorporation, the holders of our common stock do not have cumulative voting rights in the election of our directors. The combination of the present ownership by a few stockholders of a significant portion of ourtotal issued and outstanding common stock and lack of cumulative voting makes it more difficult for other stockholders to replace our board of directors or for a third party to obtain control of the Company by replacing its board of directors.
Anti-takeover Effects of Nevada Law
Business Combinations
The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder: for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or after the expiration of the three-year period, unless:
● the transaction is approved by the board of directors or a majority of the voting power held by disinterested stockholders, or
● if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares whichever is higher, or (c) for holders of preferred stock were and shares as of March 31, 2021 and 2020, respectively.
F-13 |
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 9 – INCOME TAXES
Income tax expense for the highest liquidation valueyears ended March 31, 2021 and 2020 is summarized as follows.
SUMMARY OF INCOME TAX EXPENSE
March 31, 2021 | March 31, 2020 | |||||||
Deferred: | ||||||||
Federal | $ | (76,897 | ) | $ | (19,417 | ) | ||
State | — | — | ||||||
Change in valuation allowance | 76,897 | 19,417 | ||||||
Income tax expense (benefit) | $ | — | $ | — |
The following is a reconciliation of the preferred stock, if it is higher.provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Statement of Operations:
A “combination” is definedSUMMARY OF RECONCILIATION OF PROVISION FOR INCOME TAXES
March 31, 2021 | March 31, 2020 | |||||||
Tax at statutory tax rate | 21 | % | 21 | % | ||||
State taxes | — | — | ||||||
Other permanent items | — | -1 | % | |||||
Valuation allowance | -21 | % | -20 | % | ||||
Income tax expense | — | — |
The tax effects of temporary differences that gave rise to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a seriessignificant portions of deferred tax assets and liabilities at March 31, 2021 and 2020, are as follows:
SUMMARY OF TAX EFFECTS OF TEMPORARY DIFFERENCES TO SIGNIFICANT PORTIONS OF DEFFERED TAX ASSETS AND LIABILITIES
March 31, 2021 | March 31, 2020 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carry forward | $ | 76,897 | $ | 19,417 | ||||
Total gross deferred tax assets | 76,897 | 19,417 | ||||||
Less: valuation allowance | (76,897 | ) | (19,417 | ) | ||||
Net deferred tax assets | $ | — | $ | — |
Deferred income taxes are provided for the tax effects of transactions with an "interested stockholder" having: (a) an aggregate market value equalreported in the financial statements and consist of deferred taxes related primarily to 5%differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or more of the aggregate market value oftaxable when the assets of the corporation, (b) an aggregate market value equal to 5%and liabilities are recovered or more of the aggregate market value of all outstanding shares of the corporation, or (c) 10% or more of the earning power or net income of the corporation.settled.
In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Our Articles of Incorporation state that we have elected not to be governed by the “business combination” provisions, therefore such provisions currently do not apply to us.
Control Share Acquisitions
The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS, which apply only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada, prohibit an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.
Our Articles of Incorporation state that we have elected not to be governed by the “control share” provisions, therefore, they currently do not apply to us.
Transfer Agent and Registrar
Our independent stock transfer agent is Integrity Stock Transfer, 3265 East Warm Springs Road, Las Vegas, NV 89120. Their phone number is (702) 317-7757.
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SHARES ELIGIBLE FOR FUTURE SALEBLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 9 – INCOME TAXES (CONTINUED)
At March 31, 2021 and 2020, the Company had accumulated net operating losses of approximately $603,000 and $329,800, respectively, for U.S. federal and Delaware income tax purposes available to offset future taxable incomes. The net operating losses generated in tax years prior to December 31, 2017, can be carry forward for twenty years, whereas the net operating losses generated after December 31, 2017 can be carry forward indefinitely. Management determined that it was unlikely that the Company’s deferred tax assets would be realized and have provided for a full valuation allowance associated with the net deferred tax assets.
As of July 1, 2010, thereMarch 31, 2021 and 2020, the Company’s deferred income tax assets and valuation allowance were approximately 4,200,000 shares of our common stock outstanding.$76,897 and $19,417, respectively.
Shares Covered by this Prospectus
All of the 1,750,000 shares being registered in this offering may be sold without restriction under the Securities Act of 1933 once the registration statement of which this prospectus is a part is declared effective. We have a contractual obligation under a Registration Rights Agreement to register the shares sold in the March 28, 2010 in the private placement.
Rule 144
A person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale, (2) we are subject to the Exchange Act reporting requirements for at least 90 days before the sale and (3) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time of sale.
Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
However, since we anticipate that our shares will be quoted on the OTC Bulletin Board, which is not an “automated quotation system,” our stockholders will not be able to rely on the market-based volume limitation described in the second bullet above. If, in the future, our securities are listed on an exchange or quoted on NASDAQ, then our stockholders would be able to rely on the market-based volume limitation. Unless and until our stock is so listed or quoted, our stockholders can only rely on the percentage based volume limitation described in the first bullet above.
Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144. The selling stockholders will not be governed by the foregoing restrictions when selling their shares pursuant to this prospectus.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or quoted or in private transactions. These sales will be sold at fixed prices until a market develops for our stock. The selling stockholders may use any one or more of the following methods when selling shares:
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The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.
The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a selling stockholder that a donee or pledgee intends to sell more than 500 shares of common stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.
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The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of securities will be paid by the selling stockholder and/or the purchasers. Each selling stockholder has represented and warranted to the Company that it acquired the securities subject to this registration statement in the ordinary course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, selling stockholder’s businessthe Company has not recorded a liability for unrecognized tax benefits. As of March 31, 2021, tax years 2020, 2019, and at2018 remain open for examination by the timeInternal Revenue Service and the Nevada Division of its purchase of such securities such selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.
Revenue. The Company has advised each selling stockholder that it may not use shares registered on this registration statement to cover short salesreceived no notice of common stock made prior toaudit from the date on which this registration statement shall have been declared effective byInternal Revenue Service or the SEC. If a selling stockholder uses this prospectusNevada Division of Revenue for any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The selling stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling stockholders in connection with resales of their respective shares under this registration statement.open tax years.
The Company is required to pay all fees and expenses incident to the registration of the shares, but the Company will not receive any proceeds from the sale of the common stock. The Company has agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be passed upon for us by Law Offices of Gary R. Henrie.
EXPERTS
The financial statements included in this prospectus and in the registration statement have been audited by EFP Rotenberg LLP, an independent registered public accounting firm, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance on such report, given the authority of said firm as an expert in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered in this offering. This prospectus does not contain all of the information set forth in the registration statement. For further information with respect to us and the common stock offered in this offering, we refer you to the registration statement and to the attached exhibits. With respect to each such document filed as an exhibit to the registration statement, we refer you to the exhibit for a more complete description of the matters involved.
You may inspect our registration statement and the attached exhibits and schedules without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of our registration statement from the SEC upon payment of prescribed fees. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330.
Our SEC filings, including the registration statement and the exhibits filed with the registration statement, are also available from the SEC’s website at www.sec.gov, which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC
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June 30, 2010
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June 30, 2010 | March 31,2010 | |||
Unaudited |
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ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 161,367 | 123,420 | |
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Total Assets | 161,367 | 123,420 | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
Current Liabilities | ||||
Due to related parties | $ | 112,210 | 112,210 | |
Total Liabilities | 112,210 | 112,210 | ||
Commitments and contingencies | ||||
Stockholder’s Equity: | ||||
Common stock , $0.001 par value; 100,000,000 shares authorized; | ||||
4,200,000 shares and 2,450,000 shares issued and outstanding at June 30, 2010 and March 31, 2010, respectively. | 4,200 | 2,450 | ||
Common stock subscribed, 1,750,000 shares | - | 35,000 | ||
Additional paid-in capital | 49,800 | 16,550 | ||
Deficit accumulated during the development stage | (4,843) | (7,790) | ||
Stock subscription receivable | - | (35,000) | ||
Total Stockholder’s Equity | 49,157 | 11,210 | ||
Total Liabilities and Stockholder’s Equity | $ | 161,367 | 123,420 | |
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Successor | Successor | Successor | Predecessor | ||||||
For the period | For the period from | ||||||||
For the three | For the three | July 6, 2007 | February 15, 2005 | ||||||
months ended | months ended | (Date of Inception | (Date of Inception) to | ||||||
June 30, 2010 | June 30, 2009 | to June 30, 2010 | July 5, 2007 | ||||||
Revenue | |||||||||
Sales | $ | 20,010 | $ | - | $ | 34,220 | $ | 10,787 | |
Cost of sales | 16,948 | - | 27,223 | 8,675 | |||||
Gross Margin | 3,062 | - | 6,997 | 2,112 | |||||
Operating Expenses | |||||||||
Other selling, general and | |||||||||
administrative expenses | 115 | 697 | 11,840 | 40,024 | |||||
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Total operating expenses | 115 | 697 | 11,840 | 40,024 | |||||
Net operating income (loss) | 2,947 | (697) | (4,843) | (37,912) | |||||
Other Income (expenses) | - | - | - | - | - | - | |||
Net income (loss) | $ | 2,947 | $ | (697) | $ | (4,843) | $ | (37,912) | |
Income (Loss) per common share: | |||||||||
- Basic and fully diluted | $ | 0.00 | $ | 0.00 | |||||
Weighted average number of shares | |||||||||
- Basic and fully diluted | 2,469,444 | 2,450,000 | |||||||
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Capital Stock | Additional | Deficit Accumulated | Stock | Total | |||||||||||
Common Stock | Subscribed | Paid | During the | Subscription | Stockholder’s | ||||||||||
Predecessor Entity | Shares | Amount | Shares | Amount | In capital | Development Stage | Receivable | Equity | |||||||
Balance, February 15, 2005 | |||||||||||||||
(Inception of Predecessor Entity) | - | $ - | - | $ - | $ - | $ - | $ - | $ - | |||||||
Share issued in inception | 1 | 100 | - | - | - | - | - | 100 | |||||||
Net loss for the period | - | - | - | - | - | (2,167) | - | (2,167) | |||||||
Balance, March 31, 2005 | 1 | 100 | - | - | - | (2,167) | - | (2,067) | |||||||
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Net loss for the year | - | - | - | - | - | (15,439) | - | (15,439) | |||||||
Balance, March 31, 2006 | 1 | 100 | - | - | - | (17,606) | - | (17,506) | |||||||
Net loss for the year | - | - | - | - | - | (275) | - | (275) | |||||||
Balance, March 31, 2007 | 1 | 100 | - | - | - | (17,881) | - | (17,781) | |||||||
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Net loss for the year | - | - | - | - | - | (20,031) | - | (20,031) | |||||||
Balance, July 5, 2007 | 1 | $ 100 | - | $ - | $ - | (37,912) | $ - | (37,812) | |||||||
Successor Entity | |||||||||||||||
Balance, July 6, 2007 | |||||||||||||||
(Inception of Successor Entity) | - |
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| $ - | $ - | $ - | $ - | |||||
Issuance of Common Stock | 2,000,000 | 2,000 | - | - | 8,000 | - | - | 10,000 | |||||||
Net loss for the period | - | - | - | - | - | (1,225) | - | (1,225) | |||||||
Balance, March 31, 2008 | 2,000,000 | 2,000 | - | - | $ 8,000 | (1,225) | - | 8,775 | |||||||
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Share issued in private placement at $0.02 per share | 450,000 | 450 | - | - | 8,550 | - | - | 9,000 | |||||||
Net loss for the year | - | - | - | - | - | (7,773) | - | (7,773) | |||||||
Balance, at March 31, 2009 | 2,450,000 | 2,450 | - | - | 16,550 | (8,998) | - | 10,002 | |||||||
Common stock subscribed in private placement at | |||||||||||||||
$0.02 per share | - | - | 1,750,000 | 35,000 | - | - | - | 35,000 | |||||||
Shares subscription receivable | - | - | - | - | - | - | (35,000) | (35,000) | |||||||
Net income for the year | - | - | - | - | - | 1,208 | - | 1,208 | |||||||
Balance, March 31, 2010 | 2,450,000 | $ 2,450 | $ 1,750,000 | $ 35,000 | $ 16,550 | $ (7,790) | $ (35,000) | $ 11,210 | |||||||
Cash collected - stock subscriptions issued) | |||||||||||||||
Common stock subscribed in private placement at |
$0.02 per share | 1,750,000 | 1,750 | (1,750,000) | (35,000) | 33,250 | - | $ 35,000 | 35,000 | ||||||||
Net income for the period | - | - | - | - | - | 2,947 | - | 2,947 | ||||||||
Balance, June 30, 2010 - unaudited | 4,200,000 | $ 4,200 | $ - | $ - | $ 49,800 | $ (4,843) | $ - | $ 49,157 |
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Successor | Successor | Successor | Predecessor | ||||||
For the period | For the period | ||||||||
July 6, 2007 | from February 15, | ||||||||
For the three | For the three | (Date of | 2005 (Date of | ||||||
months ended | months ended | Inception) | Inception to | ||||||
June 30, 2010 | June 30, 2009 | to June 30, 2010 | July 5, 2007) | ||||||
Cash flows from operating activities | |||||||||
Net income (loss) for the year/period | $ | 2,947 | $ | (697) | $ | (4,843) | $ | (37,912) | |
Amortization | - | - | - | 6,735 | |||||
Changes in operating assets and liabilities: | |||||||||
Other current assets | - | - | - | (74) | |||||
Inventories | - | - | (10,000) | (10,500) | |||||
Net cash provided by (used in) operating activities | 2,947 | (697) | (14,843) | (41,751) | |||||
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Cash flows from investing activities | |||||||||
Acquisition of web site | - | - | - | (33,000) | |||||
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Net cash flows used in investing activities: | - | - | - | (33,000) | |||||
Cash flows from financing activities | |||||||||
Advance from (to) related parties | - | - | 122,210 | 76,882 | |||||
Proceeds from issuance of common stock | 35,000 | - | 54,000 | 100 | |||||
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Net cash flows provided by financing activities | 35,000 | - | 176,210 | 76,982 | |||||
Net increase (decrease) in cash | 37,947 | (697) | 161,367 | 2,231 | |||||
Cash- beginning of year/period | 123,420 | 2,237 | - | - | |||||
Cash- end of year/period | $ | 161,367 | $ | 1,540 | $ | 161,367 | $ | 2,231 | |
Supplemental disclosure of non cash financing activities: | |||||||||
Issuance of common stock subscribed | $ | 35,000 | $ | - | $ | 35,000 | $ | - | |
Supplemental cash flow Information: | |||||||||
Cash paid for interest | - | - | - | - | |||||
Cash paid for income taxes | - | - | - | - |
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1.
BLUEONE CARD, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2021 AND 2020
NOTE 10 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through June 18, 2021, the date the financial statements were available to be issued, noting no items would impact the accounting for events or transactions in the current period or require additional disclosure.
F-16 |
BLUEONE CARD, INC.
UNAUDITED CONDENSED BALANCE SHEETS
June 30, 2021 | March 31, 2021 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 264,769 | $ | 340,502 | ||||
Prepaid deposits | 156,300 | 155,072 | ||||||
Total Current Assets | 421,069 | 495,574 | ||||||
Property and Equipment, net | 153,648 | 164,173 | ||||||
Property and Equipment, net | 153,648 | 164,173 | ||||||
Total Assets | $ | 574,717 | $ | 659,747 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accrued liabilities | $ | 21,171 | $ | 27,498 | ||||
Related party payables | 133,293 | 100,211 | ||||||
Customer deposits | 20,000 | 20,000 | ||||||
Loan payable, current portion | 12,335 | 12,212 | ||||||
Total Current Liabilities | 186,799 | 159,921 | ||||||
Loan payable, non-current portion | 53,332 | 56,458 | ||||||
Total Liabilities | 240,131 | 216,379 | ||||||
Commitments and Contingencies | - | |||||||
Stockholders’ Equity | ||||||||
Preferred stock, $ | par value; shares authorized, shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively292 | 292 | ||||||
Common stock, $ | par value; shares authorized, shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively9,890 | 9,890 | ||||||
Additional paid in capital | 1,042,172 | 1,042,172 | ||||||
Accumulated deficit | (717,768 | ) | (608,986 | ) | ||||
Total Stockholders’ Equity | 334,586 | 443,368 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 574,717 | $ | 659,747 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-17 |
BLUEONE CARD, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
2021 | 2020 | |||||||
For the three months ended June 30, | ||||||||
2021 | 2020 | |||||||
Net Revenues | $ | - | $ | - | ||||
Operating Expenses | ||||||||
Legal and filing fees | 5,327 | 2,405 | ||||||
Rent | 17,337 | 8,700 | ||||||
General and administrative | 85,394 | 10,796 | ||||||
Total Operating Expenses | 108,058 | 21,901 | ||||||
Loss from Operations | (108,058 | ) | (21,901 | ) | ||||
Other Income (Expense) | ||||||||
Interest expense | (724 | ) | (594 | ) | ||||
Total Other Income (Expense) | (724 | ) | (594 | ) | ||||
Loss before Income Taxes | (108,782 | ) | (22,495 | ) | ||||
Provision for Income Tax | - | - | ||||||
Net Loss | $ | (108,782 | ) | $ | (22,495 | ) | ||
Basic and Diluted Net Loss Per Share | $ | (0.01 | ) | $ | (1.15 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted | 9,890,075 | 19,515 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-18 |
BLUEONE CARD, INC.
UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three Months Ended June 30, 2021
Shares | Amount | Shares** | Amount** | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
Preferred Stock | Common Stock ** | Additional Paid-in | Accumulated | Total | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance - March 31, 2021 | 292,000 | $ | 292 | 9,890,075 | $ | 9,890 | $ | 1,042,172 | $ | (608,986 | ) | $ | 443,368 | |||||||||||||||
Net loss | - | - | - | - | - | (108,782 | ) | (108,782 | ) | |||||||||||||||||||
Balance - June 30, 2021 | 292,000 | 292 | 9,890,075 | 9,890 | 1,042,172 | (717,768 | ) | 334,586 |
Three Months Ended June 30, 2020
Preferred Stock | Common Stock ** | Additional Paid-in | Accumulated | Total | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance - March 31, 2020 | 300,000 | $ | 300 | 19,100 | $ | 19 | $ | 371,035 | $ | (333,094 | ) | $ | 38,260 | |||||||||||||||
Beginning balance | 300,000 | $ | 300 | 19,100 | $ | 19 | $ | 371,035 | $ | (333,094 | ) | $ | 38,260 | |||||||||||||||
Sale of common stock | - | - | 600 | 1 | 29,999 | - | 30,000 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (22,495 | ) | (22,495 | ) | |||||||||||||||||||
Balance - June 30, 2020 | 300,000 | $ | 300 | 19,700 | $ | 20 | $ | 401,034 | $ | (355,589 | ) | $ | 45,765 | |||||||||||||||
Ending balance | 300,000 | $ | 300 | 19,700 | $ | 20 | $ | 401,034 | $ | (355,589 | ) | $ | 45,765 |
** | Common stock adjusted to reflect 1:100 reverse stock splits effected on October 15, 2019 and June 30, 2020. |
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-19 |
BLUEONE CARD, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
2021 | 2020 | |||||||
For the three months ended June 30, | ||||||||
2021 | 2020 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net Loss | $ | (108,782 | ) | $ | (22,495 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 10,525 | 7,259 | ||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) Decrease in prepaid deposits | (1,228 | ) | 8,700 | |||||
Decrease in accrued liabilities | (6,327 | ) | (1,181 | ) | ||||
Increase (Decrease) in related party payables | 33,082 | (1,813 | ) | |||||
Net Cash Used in Operating Activities | (72,730 | ) | (9,530 | ) | ||||
Cash Flows From Investing Activities: | ||||||||
Cash paid for purchase of property and equipment | - | (19,500 | ) | |||||
Net Cash Used In Investing Activities | - | (19,500 | ) | |||||
Cash Flows From Financing Activities: | ||||||||
Cash proceeds from sale of common stock | - | 30,000 | ||||||
Cash paid for note payable | (3,003 | ) | (970 | ) | ||||
Net Cash (Used In) Provided By Financing Activities | (3,003 | ) | 29,030 | |||||
Net Decrease in Cash | (75,733 | ) | - | |||||
Cash - Beginning of the Period | 340,502 | - | ||||||
Cash - End of the Period | $ | 264,769 | $ | - | ||||
Supplemental Disclosures of Cash Flows | ||||||||
Cash paid for interest | $ | 724 | $ | 257 | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Supplemental Disclosures of Non-cash Investing and Financing Activities: | ||||||||
Purchase of vehicle by execution of a promissory note | $ | - | $ | 78,491 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-20 |
BLUEONE CARD, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND GOING CONCERN
General
The accompanying unaudited condensed consolidated financial statements of the Avenue South Ltd. and its subsidiary have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission,BlueOne Card, Inc. (“BlueOne” or the SEC, including“Company”) as of June 30, 2021 and for the instructions to Form 10-Qthree months ended June 30, 2021 and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and2020 should be read in conjunction with our audited consolidatedthe financial statements for the year ended March 31, 2010.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month period have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms "Company", "we", "us" or "our" mean2021 and 2020, respectively. BlueOne (formerly known as Avenue South Ltd. and its subsidiary included in these consolidated financial statements.
2. ORGANIZATION AND NATURE OF BUSINESS
On, TBSS International, Inc., or Manneking Inc.), was incorporated on July 6, 2007 our principal stockholder acquired 100%under the laws of the equitystate of Avenue South,Nevada. The Company started its business as a retailer and importer of domestic home furnishings from Hong Kong. On September 30, 2011, the Company changed its name to TBSS International, Inc., which was engaged in gold mining and drilling and general construction. On April 26, 2019, Corporate Compliance, LLC filed a North Carolina corporation. On July 6, 2007, Avenue South Ltd., a Nevada corporation was formed by our principal stockholder and our principal stockholder entered into a share exchange agreement,re-application for custodianship pursuant to which allNevada Revised Statutes NRS 78.347. The Eighth Judicial District Court of Clark County, Nevada granted custodianship over TBSS International, Inc. to Corporate Compliance, LLC. On October 15, 2019, the Company changed its name to Manneking Inc., and then to BlueCard One, Inc. on June 30, 2020.
On October 15, 2019 and on June 30, 2020, the Company effectuated a 1-for-100 reverse stock splits (the “Reverse Splits”) of its issued and outstanding common stock. As a result of the Reverse Splits, each one hundred shares of issued and outstanding prior to the Reverse Splits were converted into one share of common stock held by our principal stockholder in Avenue South, Inc. was acquired by Avenue South Ltd. by issuing 2 million common shares to our principal stockholder. Avenue South Ltd. then became the parent corporation owning 100% of Avenue South, Inc.
Avenue South, Inc. was incorporated(See Note 8). All share and per share numbers in the State of North Carolina on February 15, 2005 (date of predecessor inception) withunaudited condensed financial statements and notes below have been revised retroactively to reflect the principal business objectiveReverse Splits.
Risk and Uncertainty Concerning COVID-19 Pandemic
In March 2020, the World Health Organization declared the outbreak of a “one-stop” web based suppliernovel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. We are currently monitoring the outbreak of importedCOVID-19 and domestic art reproductions, collectiblesthe related business and home décor items that are difficulttravel restrictions and changes to findbehaviour intended to reduce its spread. If the coronavirus continues to progress, it could have a material negative impact on our results of operations and cash flow, in traditional home furnishing retail outlets. All items are sold throughaddition to the Company’s website, www.avenuesouth.com.
The Company’s success will depend in partimpact on its ability to market and sell its products overemployees. We have concluded that while it is reasonably possible that the internet and through other marketing channels. There can be no assurance that these marketing efforts will be successful. The Company believes that it currently has sufficient cash and financing commitments to meet its funding requirements overvirus could have a negative impact on the next year. In addition,results of operations, the Company may wish to selectively pursue additional products complementary to thosespecific impact is not readily determinable as of the Company in the future in order to expand its presence in the marketplace and achieve operating efficiencies. The Company may expect to seek to obtain additional funding through debt or equity transactions. There can be no assurance as to the availability or terms upon which such financing and capital might be available.
Principlesdate of consolidation
The accompanying consolidated financial statements include the accounts of the Avenue South Ltd. and its wholly-owned subsidiary Avenue South, Inc., after elimination of all material intercompany accounts, transactions, and profits.
A summary of significant accounting policies of Avenue South Ltd. (A Development Stage Company) (the “Company” or “Successor”) is presented to assist in understanding the Company’sthese financial statements. The accounting policies presentedfinancial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation
The interim unaudited condensed financial statements have been prepared in these footnotes conform toaccordance with accounting principles generally accepted in the United States of America (“GAAP”), and include the accounts of the Company. The preparation of interim condensed financial statements requires management to make assumptions and estimates that impact the amounts reported. The interim condensed financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. These interim condensed financial statements, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Company’s results of operations, financial position and cash flows for the interim periods ended June 30, 2021 and 2020; however, certain information and footnote disclosures normally included in our audited annual financial statements, as included in the Company’s interim condensed financial statements, have been consistently applied incondensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. It is important to note that the preparationCompany’s results of operations and cash flows for interim periods are not necessarily indicative of the accompanying financial statements.results of operations and cash flows to be expected for a full fiscal year or any other interim period.
Going Concern
The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. The Company has not realizedyet generated any significant revenuesrevenue and has suffered operating losses since July 6, 2007 (Inception Date) to date and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its planned principal business purposeshareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $108,782 for the three months ended June 30, 2021, used net cash flows in operating activities of $72,730, and has an accumulated deficit of $717,768 as of June 30, 2021. These factors, among others, raise a substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is consideredunable to obtain adequate capital, it could be inforced to cease operations. The interim condensed financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a development stage in accordance with ASC 915, “Development Stage Entities.”going concern.
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3. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Inventory
Inventories consist of finished goods of home furnishing products. Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. The Company has not recorded an allowance for slow-moving or obsolete inventory. There was no inventory on hand at June 30, 2010.
Income Taxes
The Company uses the liability approach to financial accounting and reporting for income taxes. The differences between the financial statement and tax bases of assets and liabilities are determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the period in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce deferred tax asset accounts to the amounts that will more likely than not be realized. Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax asset and liability accounts.
Revenue Recognition
The Company recognizes revenue in accordance with accounting standards issued by the FASB, which specifies that revenue is realized or realizable and earned when four criteria are met:
The Company recognizes revenue when the goods are accepted by the customer and title has passed. The Company sells its goods via shipment from its suppliers directly to its customers.Shipping and handling costs were not significant. The Company has a 30 day return policy and customers have a general right of 30 days return on products delivered.
The Company did not provide for an allowance for return products since the Company has not experienced any sales returns.
Certain customer arrangements require evaluation of the criteria outlined in the accounting standards of reporting revenue “Gross” as a Principal Versus “Net” as an Agent in determining whether it is appropriate to record the gross amount of revenue and related costs or the net amount earned as agent fees. Generally, when we are primarily obligated in a transaction, revenue is recorded on a gross basis. Other factors that we consider in determining whether to recognize revenue on a gross versus net basis include our assumption of credit risk, our latitude in establishing prices, our determination of service specifications and our involvement in the provision of services. When we conclude that we are not primarily obligated as a principal, we record the net amount earned as agent fees within net sales.
Basic Income/Loss Per Common Share
The computation of income / loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC 260, “Earnings Per Share”. At June 30, 2010 and March 31, 2010, the Company did not have any stock equivalents.
Use of Estimates
The preparation of condensed financial statements in conformity with generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. ActualThe Company regularly evaluates estimates and assumptions related to the valuation of its assets, accounts payable, accrued liabilities and payable to related party. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results couldof which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from thosethe Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Foreign Currency Transactions
ForCash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the year endedtime of issuance to be cash equivalents. The Company did 0t have any cash equivalents as of June 30, 2021 and March 31, 20102021, respectively.
Property and 2009,Equipment
Property and equipment are recorded at cost, less accumulated depreciation. The Company provides for depreciation on a straight-line basis over the estimated useful lives of the assets which range from fiveto seven years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets when they are placed into service. The Company evaluates property and equipment for impairment periodically to determine if changes in circumstances or the occurrence of events suggest the carrying value of the asset or asset group may not be recoverable. Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized.
Long-lived Assets
In accordance with Accounting Standards Codification (“ASC”) ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the estimated future undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss equal to the excess of the carrying value over the assets fair market value is recognized when the carrying amount exceeds the undiscounted cash flows. The impairment loss is recorded as an expense and a direct write-down of the asset. NaN impairment loss was recorded during the three months ended June 30, 2021 and 2020, respectively.
F-22 |
The Company computes earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. The Company computes Basic EPS by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At June 30, 2021 and March 31, 2021, there were no convertible notes, options or warrants available for conversion that if exercised, may dilute future earnings per share.
Leases
The Company has operating leases for its offices. Management determines if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company consider it to be, or contain, a lease.
The Company records a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities include renewal and termination options that are reasonably certain to be exercised. Leases with an initial term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company has established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 applies to assets or liabilities for which there are no gainquoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of prepaid deposits, accrued liabilities and loss on foreign currency transaction ascustomer deposits. The Company believes that the recorded values of all transactions are denominated in US dollars.the financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
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Recent Accounting Pronouncements
The Company accounts for equity-based transactions with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“ASC 505-50”). The Company has established that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In May 2009,general, we recognize the FASBfair value of the equity instruments issued newas deferred stock compensation and amortize the cost over the term of the contract.
The Company accounts for employee stock-based compensation in accordance with the guidance of ASC 855 “Subsequent Events”Topic 718, “Compensation—Stock Compensation”. Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date based on the treatment of subsequent events which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, management of a reporting entity is required to evaluate subsequent events through the date that financial statements are issued and disclose the date through which subsequent events have been evaluated, as well as the date the financial statements were issued. This new guidance was effective for fiscal years and interim periods ended after June 15, 2009, and must be applied prospectively. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2009, the FASB issued an Accounting Standards Update (“ASU”) No.2009.05 regarding measuring liabilities at fair value. This ASU provides additional guidance clarifying the measurement of liabilities at fair value in circumstances in which a quoted price in an active market forof the identical liabilityaward and is not available; under those circumstances, a reporting entity is required to measure fair value using one or more of valuation techniques, as defined. This ASU is effective forrecognized ratably over the first reporting period, including interim periods, beginning after the issuance of this ASU. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.requisite service period.
The Company does not expect that adoption of recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.
5. DUE TO RELATED PARTIESIncome Taxes
As of June 30, 2010, the amount due related parties of $112,210 included $77,235 due to President, Principal Accounting Officer, Secretary and director and $34,975 due to Vice President Sales and Director. As of March 31,2009, the amount due to related parties of $2,235 represented the amount due to President, Principal Accounting Officer, Secretary and director. The amounts due are unsecured, non-interest bearing, and due on demand.
6. INCOME TAXES
The Company accounts for income taxes using the asset and liability method; under whichmethod in accordance with ASC 740, “Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities and assets are determined based onrecognized for the differenceexpected future tax consequences of temporary differences between the financial statement carrying amountsreporting and the tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced byand laws. The Company records a valuation allowance when,to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the opinion offinancial statements in the period during which, based on all available evidence, management believes it is more likely than not that somethe position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion or all of the deferredbenefits associated with tax assets will notpositions taken that exceeds the amount measured as described above should be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
At June 30, 2010, the Company had accumulated deficit during the development stage of $4,843 to offset future taxable income. The Company has establishedreflected as a valuation allowance equal to the full amount of this deferred tax asset due to the uncertainty of the utilization of the operating losses in future periods.
The Company adopted the provisions of ASC 740,“Accounting for Uncertainty in Income Taxes,” at inception. As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits.
The Company has no uncertain tax positions at June 30, 2010benefits in the accompanying balance sheets along with any associated interest and 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
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7. STOCKHOLDER’S’ EQUITY
The Company’s Articles of Incorporation authorize 100,000,000 shares of $0.001 par value common stock. On December 17, 2008, the Company issued 450,000 shares of its Common Stockpenalties that would be payable to the Company’s sole stockholder, at $0.02 per share, for total proceeds of $9,000.taxing authorities upon examination.
On March 28, 2010 the Company had received stock subscriptions to issue 1,750,000 shares of its common stock to 28 non-US investors at $0.02 per share. The Company completed the private placement offering for gross proceeds of $35,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933 in June 2010. The total amount of common stock subscribed at March 31, 2010 was $35,000. The Company also entered into a Registration Rights Agreement on March 28, 2010 with each investor whereby as soon as possible but in any event not later than the 120th day after March 28, 2010, the Company agreed to file a registration statement on Form S-1. Upon the failure by the Company to have the Registration Statement declared effective within 180 days from the date of the closing of our offering (September 27, 2010), the Company may be required to issue additional shares of its common stock (valued at $0.02 per share) to each Subscriber as liquidated damages. The penalty amount is equal to five percent of the subscription price paid by each subscriber for the first month starting September 27, 2010, if the Registration Statement is not declared effective by that date. The penalty amount equals an additional 87,500 total common shares that may be issued to all the investors for a one month delay and one percent of the subscription price paid in shares (valued at $0.02 per share) to each subscriber for every month thereafter. The maximum amount of liquidated damages due shall not exceed twenty five percent of the Subscription Price paid by the Subscribers (valued at $0.02 per share), which equals a potential maximum of 437,500 additional total common shares that may be issued to all subscribers.
On June 16, 2010 the Company collected all stock subscriptions receivable totaling $35,000 and issued the 1,750,000 shares that were subscribed in the offering.
8. SUBSEQUENT EVENTS
The Company evaluated subsequent events through the time of issuance of the financial statements. Pursuant to the requirements of FASB ASC Topic 855, there were no events or transactions occurring during this subsequent event reporting period that require recognition or disclosure in the financial statements.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Avenue South Ltd
We have audited the accompanying consolidated balance sheets of Avenue South Ltd as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in stockholder’s equity, and cash flows for each of the years in the two-year period ended March 31, 2010 and for the period since inception, July 6, 2007, through March 31, 2010. Avenue South Ltd’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Avenue South Ltd as of March 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2010 and for the period since inception, July 6, 2007, through March 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
July 26, 2010
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Avenue South Inc.
We have audited the accompanying statements of operations, changes in stockholder’s equity, and cash flows for the period since inception, February 15, 2005, through July 5, 2007. Avenue South Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avenue South Inc. for the period since inception, February 15, 2005, through July 5, 2007 in conformity with accounting principles generally accepted in the United States of America.
/s/ EFP Rotenberg, LLP
EFP Rotenberg, LLP
Rochester, New York
July 26, 2010
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March 31,2010 | March 31,2009 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 123,420 | $ | 2,237 |
Inventory | - | 10,000 | ||
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Total Assets | 123,420 | 12,237 | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
Current Liabilities | ||||
Due to related parties | $ | 112,210 | $ | 2,235 |
Total Liabilities | 112,210 | 2,235 | ||
Commitments and contingencies | ||||
Stockholder’s Equity: | ||||
Common stock , $0.001 par value; 100,000,000 shares authorized; | ||||
2,450,000 shares and 2,450,000 shares issued and outstanding at March 31, 2010 and 2009, respectively. | 2,450 | 2,450 | ||
Common stock subscribed, 1,750,000 shares | 35,000 | - | ||
Additional paid-in capital | 16,550 | 16,550 | ||
Deficit accumulated during the development stage | (7,790) | (8,998) | ||
Stock subscription receivable | (35,000) | - | ||
Total Stockholder’s Equity | 11,210 | 10,002 | ||
Total Liabilities and Stockholder’s Equity | $ | 123,420 | $ | 12,237 |
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Successor | Successor | Successor | Predecessor | ||||||
For the period | For the period from | ||||||||
July 6, 2007 | February 15, 2005 | ||||||||
For the year ended | For the year ended | (Date of Inception) | (Date of Inception) to | ||||||
March 31, 2010 | March 31, 2009 | to March 31, 2010 | July 5, 2007 | ||||||
Revenue | |||||||||
Sales | $ | 13,500 | $ | 417 | $ | 14,210 | $ | 10,787 | |
Cost of sales | 10,000 | 276 | 10,276 | 8,675 | |||||
Gross Margin | 3,500 | 141 | 3,934 | 2,112 | |||||
Operating Expenses | |||||||||
Other selling, general and administrative expenses | 2,292 | 7,914 | 11,724 | 40,024 | |||||
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Total operating expenses | 2,292 | 7,914 | 11,724 | 40,024 | |||||
Net operating income (loss) | 1,208 | (7,773) | (7,790) | (37,912) | |||||
Other Income (expenses) | - | - | - | - | - | - | |||
Net income (loss) | $ | 1,208 | $ | (7,773) | $ | (7,790) | $ | (37,912) | |
Income (Loss) per common share: | |||||||||
- Basic and fully diluted | $ | 0.00 | $ | 0.00 | |||||
Weighted average number of shares | |||||||||
- Basic and fully diluted | 2,450,000 | 2,129,452 |
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Additional | Deficit Accumulated | Stock | Total | ||||||||||||
Common Stock | Capital Stock Subscribed | Paid | During the | Subscription | Stockholder’s | ||||||||||
Predecessor Entity | Shares |
| Amount | Shares |
| Amount | In capital |
| Development Stage |
| Receivable |
| Equity | ||
Balance, February 15, 2005 | - | $ - | - | $ - | $ - | $ - | $ - | $ - | |||||||
Share issued in inception | 1 | 100 | - | - | - | - | - | 100 | |||||||
Net loss for the period | - | - | - | - | - | (2,167) | - | (2,167) | |||||||
Balance, March 31, 2005 | 1 | 100 | - | - | - | (2,167) | - | (2,067) | |||||||
Net loss for the year | - | - | - | - | - | (15,439) |
| - | (15,439) | ||||||
Balance, March 31, 2006 | 1 | 100 | - | - | - | (17,606) | - | (17,506) | |||||||
Net loss for the year | - | - | - | - | - | (275) | - | (275) | |||||||
Balance, March 31, 2007 | 1 | 100 | - | - | - | (17,881) | - | (17,781) | |||||||
Net loss for the year | - | - | - | - | - | (20,031) | - | (20,031) | |||||||
Balance, July 5, 2007 | 1 | $ 100 | - | $ - | $ - | (37,912) | $ - | (37,812) | |||||||
Successor Entity | |||||||||||||||
Balance, July 6, 2007 | - |
| $ - | - | $ - |
| $ - | $ - | $ - | $ - | |||||
Issuance of Common Stock | 2,000,000 | 2,000 | - | - | 8,000 | - | - | 10,000 | |||||||
Net loss for the period | - | - | - | - | - | (1,225) | - | (1,225) | |||||||
Balance, March 31, 2008 | 2,000,000 | 2,000 | - | - | $ 8,000 | (1,225) | - | 8,775 | |||||||
Share issued in private placement at $0.02 per share | 450,000 | 450 | - | - | 8,550 | - | - | 9,000 | |||||||
Net loss for the year | - | - | - | - | - | (7,773) | - | (7,773) | |||||||
Balance, at March 31, 2009 | 2,450,000 | 2,450 | - | - | 16,550 | (8,998) | - | 10,002 | |||||||
Common stock subscribed in private placement at | - | - | 1,750,000 | 35,000 | - | - | - | 35,000 | |||||||
Shares subscription receivable | - | - | - | - | - | - | (35,000) | (35,000) | |||||||
Net income for the year | - | - | - | - | - | 1,208 | - | 1,208 | |||||||
Balance, March 31, 2010 | 2,450,000 | $ 2,450 | 1,750,000 | $ 35,000 | $ 16,550 | $ (7,790) | $ (35,000) | $ 11,210 |
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AVENUE SOUTH LTD.
( A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Successor | Successor | Successor | Predecessor | ||||||
For the period | |||||||||
July 6, 2007 | For the period | ||||||||
For the year | For the year | (Date of | from February 15, | ||||||
ended | ended | Inception) | 2005 (Date of | ||||||
March 31, | March 31, | to March 31, | Inception) to | ||||||
2010 | 2009 | 2010 | July 5, 2007 | ||||||
Cash flows from operating activities | |||||||||
Net income (loss) for the year/period | $ | 1,208 | $ | (7,773) | $ | (7,790) | $ | (37,912) | |
Amortization | - | - | - | 6,735 | |||||
Changes in operating assets and liabilities: | |||||||||
Other current assets | - | - | - | (74) | |||||
Inventories | 10,000 | - | (10,000) | (10,500) | |||||
Net cash provided by (used in) operating activities | 11,208 | (7,773) | (17,790) | (41,751) | |||||
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Cash flows from investing activities | |||||||||
Acquisition of web site | - | - | - | (33,000) | |||||
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Net cash flows used in investing activities: | - | - | - | (33,000) | |||||
Cash flows from financing activities | |||||||||
Advance from (to) related parties | 109,975 | (3,000) | 122,210 | 76,882 | |||||
Proceeds from issuance of common stock | - | 9,000 | 19,000 | 100 | |||||
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Net cash flows provided by financing activities | 109,975 | 6,000 | 141,210 | 76,982 | |||||
Net increase (decrease) in cash | 121,183 | (1,773) | 123,420 | 2,231 | |||||
Cash- beginning of year/period | 2,237 | 4,010 | - | - | |||||
Cash- end of year/period | $ | 123,420 | $ | 2,237 | $ | 123,420 | $ | 2,231 | |
Supplemental disclosure of non cash financing activities: | |||||||||
Stock subscription receivable | $ | 35,000 | $ | - | $ | 35,000 | $ | - | |
Supplemental cash flow Information: | |||||||||
Cash paid for interest | - | - | - | - | |||||
Cash paid for income taxes | - | - | - | - |
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1. ORGANIZATION AND NATURE OF BUSINESS
On July 6, 2007, our principal stockholder acquired 100% of the equity of Avenue South, Inc., a North Carolina corporation. On July 6, 2007, Avenue South Ltd., a Nevada corporation was formed by our principal stockholder and our principal stockholder entered into a share exchange agreement, pursuant to which all the common stock held by our principal stockholder in Avenue South, Inc. was acquired by Avenue South Ltd. by issuing 2 million common shares to our principal stockholder. Avenue South Ltd. then became the parent corporation owning 100% of Avenue South, Inc.
Avenue South, Inc. was incorporated in the State of North Carolina on February 15, 2005 (date of predecessor inception) with the principal business objective of a “one-stop” web based supplier of imported and domestic art reproductions, collectibles and home décor items that are difficult to find in traditional home furnishing retail outlets. All items are sold through the Company’s website, www.avenuesouth.com.
The Company’s success will depend in part on its ability to market and sell its products over the internet and through other marketing channels. There can be no assurance that these marketing efforts will be successful. The Company believes that it currently has sufficient cash and financing commitments to meet its funding requirements over the next year. In addition, the Company may wish to selectively pursue additional products complementary to those of the Company in the future in order to expand its presence in the marketplace and achieve operating efficiencies. The Company may expect to seek to obtain additional funding through debt or equity transactions. There can be no assurance as to the availability or terms upon which such financing and capital might be available.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Avenue South Ltd. and its wholly-owned subsidiary Avenue South, Inc., after elimination of all material intercompany accounts, transactions, and profits.
A summary of significant accounting policies of Avenue South Ltd. (A Development Stage Company) (the “Company” or “Successor”) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. The Company has not realized any significant revenues from its planned principal business purpose and is considered to be in a development stage in accordance with ASC 915, “Development Stage Entities.”
Inventory
Inventories consist of finished goods of home furnishing products. Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. The Company has not recorded an allowance for slow-moving or obsolete inventory. There was no inventory on hand at March 31, 2010 and no obsolete inventory at March 31, 2009. The Company sold its entire inventory during the year ended March 31, 2010.
Income Taxes
The Company uses the liability approach to financial accounting and reporting for income taxes. The differences between the financial statement and tax bases of assets and liabilities are determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the period in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce deferred tax asset accounts to the amounts that will more likely than not be realized. Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax asset and liability accounts.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Revenue Recognition
The Company recognizes revenue in accordance with accounting standards issued by the FASB, which specifies that revenue is realized or realizable and earned when four criteria are met:
The Company recognizes revenue when the goods are accepted by the customer and title has passed. The Company sells its goods via shipment from its suppliers directly to its customers.Shipping and handling costs were not significant. The Company has a 30 day return policy and customers have a general right of return on products delivered.
The Company did not provide for an allowance for return products since the Company has not experienced any sales returns.
Certain customer arrangements require evaluation of the criteria outlined in the accounting standards of reporting revenue “Gross” as a Principal Versus “Net” as an Agent in determining whether it is appropriate to record the gross amount of revenue and related costs or the net amount earned as agent fees. Generally, when we are primarily obligated in a transaction, revenue is recorded on a gross basis. Other factors that we consider in determining whether to recognize revenue on a gross versus net basis include our assumption of credit risk, our latitude in establishing prices, our determination of service specifications and our involvement in the provision of services. When we conclude that we are not primarily obligated as a principal, we record the net amount earned as agent fees within net sales.
Basic Income/Loss Per Common Share
The computation of income / loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC 260, “Earnings Per Share”. At March 31, 2010 and 2009, the Company did not have any stock equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.
Foreign Currency Transactions
For the year ended March 31, 2010 and 2009, there are no gain and loss on foreign currency transaction as all transactions are denominated in US dollars.
3. RECENT CHANGES IN ACCOUNTING STANDARDS
Recent Accounting Pronouncements
In May 2009,March 2020, the FASB issued new guidanceASU 2020-04, “Facilitation of ASC 855 “Subsequent Events”the Effects of Reference Rate Reform on the treatment of subsequent events which is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, management of a reporting entity is required to evaluate subsequent events through the date that financial statements are issued and disclose the date through which subsequent events have been evaluated, as well as the date the financial statements were issued. This new guidance was effective for fiscal years and interim periods ended after June 15, 2009, and must be applied prospectively. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
In August 2009, the FASB issued an Accounting Standards Update (“ASU”) No.2009.05 regarding measuring liabilities at fair value.Financial Reporting.” This ASU provides additional guidance clarifyingoptional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference the measurement of liabilities at fair value in circumstances in which a quoted price in an active market forLondon Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the identical liability isamendments do not available; under those circumstances, a reporting entity is requiredapply to measure fair value using onecontract modifications made and hedging relationships entered into or more of valuation techniques, as defined. This ASU is effective for the first reporting period, including interim periods, beginningevaluated after the issuance of this ASU. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
December 31, 2022. The Company does not expect thatthe adoption of recently issued accounting pronouncements willASU 2019-12 to have a material impact on its financial position, results of operations or cash flows.
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4. REORGANIZATION OF AVENUE SOUTH, INC.
On July 6, 2007, Avenue South Ltd. (the Successor) acquired allNOTE 3 – PREPAID DEPOSITS
Prepaid deposits consisted of the assets but contractually was not required to assume the liabilitiesfollowing:
SCHEDULE OF PREPAID DEPOSITS
June 30, 2021 | March 31, 2021 | |||||||
Prepaid rent | $ | 5,759 | $ | 5,759 | ||||
Prepaid automobile lease payment | 1,228 | - | ||||||
Prepaid cards inventory | 49,313 | 49,313 | ||||||
Prepaid Business Identification Number | 100,000 | 100,000 | ||||||
Total | $ | 156,300 | $ | 155,072 |
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment, stated at cost, consisted of the Avenue South, Inc. (Predecessor).following:
On July
SCHEDULE OF PROPERTY AND EQUIPMENT
Estimated Life | June 30, 2021 | March 31, 2021 | ||||||||
Furniture and Fixtures | 5 years | $ | 112,519 | $ | 112,519 | |||||
Vehicles | 5 years | 97,991 | 97,991 | |||||||
Property and Equipment,gross | 210,510 | 210,510 | ||||||||
Less: Accumulated depreciation | (56,862 | ) | (46,337 | ) | ||||||
Total | $ | 153,648 | $ | 164,173 |
Depreciation expense amounted to $10,525 and $7,259 for three months ended June 30, 2021 and 2020, respectively.
NOTE 5 2007 before the date of reorganization, the assets and liabilities of the Predecessor are as follow:
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– RELATED PARTY TRANSACTIONS
The assets acquiredCompany’s Chief Executive Officer (“CEO”), from the Predecessor were recorded based on their fair values and were allocated in accordance with the purchase method accounting,time to tangible assets acquiredtime, provided advances to the extent of the bargain purchase consideration paid by the SuccessorCompany for its working capital purposes. The CEO had advanced funds to the ownercompany totalling $45,793 and $50,211 as of the Predecessor for $10,000, as follows:
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For the period from | ||||||
April 1, 2007 to | For the year ended | For the year ended | ||||
July 5, 2007 | March 31, 2007 | March 31, 2006 | ||||
Sales | $ | - | - | 10,613 | ||
Cost of sales | - | - | 8,675 | |||
Gross margin | - | - | 1,938 | |||
Other Selling, general and administrative expenses | 20,031 | 275 | 17,377 | |||
Net loss | $ | (20,031) | (275) | (15,439) |
5. DUE TO RELATED PARTIES
As ofJune 30, 2021 and March 31, 2010, the amount due related parties of $112,210 included $77,235 due to President, Principal Accounting Officer, Secretary and director and $34,975 due to Vice President Sales and Director. As of March 31,2009, the amount due to related parties of $2,235 represented the amount due to President, Principal Accounting Officer, Secretary and director.2021, respectively. The amounts duefunds advanced are unsecured, non-interest bearing, and due on demand.
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6. INCOME TAXES
The Company accounts for income taxes using the liability method; under which deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
At March 31, 2010,On December 1, 2020, the Company had accumulated deficit during the development stageentered into an employment agreement with its CEO for a three-year term, for an annual compensation of $7,790 to offset future taxable income. The Company has established a valuation allowance equal to the full amount of this deferred tax asset due to the uncertainty of the utilization of the operating losses in future periods.
The Company adopted the provisions of ASC 740,“Accounting for Uncertainty in Income Taxes,” at inception. As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits.
The Company has no uncertain tax positions at March 31, 2010 and 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
7. STOCKHOLDER’S’ EQUITY
The Company’s Articles of Incorporation authorize 100,000,000 shares of $0.001 par value common stock.$. On December 17, 2008,22, 2020, the Company issued 450,000 shares of its Common Stock to the Company’s sole stockholder, at $0.02 per share, for total proceeds of $9,000.
On March 28, 2010 the Company had received stock subscriptions to issue 1,750,000 shares of its common stock to its CEO, valued at $1,000 as an inducement (sign-on bonus) to enter into the employment agreement (Note 8). The Company has recorded compensation expense of $37,500 and $0 for the three months ended June 30, 2021 and 2020, respectively. Compensation payable to the CEO was $87,500 and $50,000 as of June 30, 2021 and March 31, 2021, respectively.
The Company has recorded a total payable to the CEO of $133,293 and $100,211 as of June 30, 2021 and March 31, 2021, respectively.
NOTE 6 – LOAN PAYABLE
On June 16, 2020, the Company entered into a financing arrangement to purchase a vehicle, and obtained a loan of $78,491, payable over a term of 72 months, interest bearing at 3.99%, with a monthly payment of principal and interest of $1,228.
SCHEDULE OF LOAN PAYABLE
June 30, 2021 | March 31, 2021 | |||||||
Loan payable | $ | 65,667 | $ | 68,670 | ||||
Less: Current portion | (12,335 | ) | (12,212 | ) | ||||
Loan Payable - Non-current portion | $ | 53,332 | $ | 56,458 |
The amount of loan payments due in the next five years ended March 31, are as follows:
SCHEDULE OF MATURITIES OF LOAN PAYMENTS
1 | ||||
2022 (Remainder) | $ | 9,210 | ||
2023 | 12,699 | |||
2024 | 13,231 | |||
2025 | 13,762 | |||
2026 | 14,321 | |||
Thereafter | 2,444 | |||
Total | $ | 65,667 |
The Company recorded interest expense on the loan of $681 and $257 for the three months ended June 30, 2021 and 2020, respectively.
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NOTE 7 – COMMITMENTS AND CONTINGENCIES
Office Lease
On October 30, 2019, the Company executed a non-cancellable operating lease for its principal office with the lease commencing November 1, 2019 for a period of 6 months and maturing on April 30, 2020. The Company paid a security deposit of $8,700 at the inception of the lease. The monthly rent of the lease was $8,700. The Company has recorded rent expense of $0 and $8,700 for this non-cancellable lease for its principal office for the three months ended June 30, 2021 and 2020, respectively.
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. The Company has recorded rent expense of $837 and $0 for the three months ended June 30, 2021 and 2020, 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 $55,000 on October 28, non-US investors2020. The Company has recorded rent expense of $16,500 and $0 for the three months ended June 30, 2021 and 2020, respectively.
The Company has recorded total rent expense of $17,337 and $8,700 for the three months ended June 30, 2021 and 2020, respectively.
SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS
Rent commitment of the Company for the year ended:
1 | ||||
March 31, 2022 | $ | 22,000 | ||
March 31, 2023 | - | |||
March 31, 2024 | - | |||
March 31, 2025 | - | |||
March 31, 2026 | - | |||
Total | $ | 22,000 |
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 June 30, 2021 and March 31, 2021, respectively.
NOTE 8 – STOCKHOLDERS’ EQUITY
The Company’s capitalization at $0.02June 30, 2021 and March 31, 2021 was authorized common shares with a par value of $ per share, and authorized preferred shares with a par value of $ per share. The
On October 15, 2019 and June 30, 2020, the Company completedeffectuated reverse stock splits (the “Reverse Splits”) of its issued and outstanding common stock. As a result of the private placement offering for gross proceeds of $35,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933 in June 2010. The total amountReverse Splits, each 100 shares of common stock subscribed atissued and outstanding prior to the Reverse Splits were converted into one (1) common stock. All share and per share numbers in these financial statements have been revised retroactively to take into account this Reverse Split.
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Common Stock
The Company did not issue or sell any common stock during the three months ended June 30, 2021. As a result, the total issued and outstanding shares of common stock were shares as of June 30, 2021 and March 31, 2010 was $35,000.2021, respectively.
Preferred Stock
The Company also enteredBoard of Directors, without further approval of its stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series. Issuances of shares of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of our Common Stock and other series of Preferred Stock then outstanding.
Series A Preferred Stock
There are shares of Series A Preferred Stock designated and shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively.
Liquidation Preference
In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, after setting apart or paying in full the preferential amounts due to Holders of senior capital stock, if any, the Holders of Series A Preferred Stock and parity capital stock, if any, shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the Holders of junior capital stock, including Common Stock, an amount equal to $0.001 per share [the “Liquidation Preference”]. If upon such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation available for distribution to the Holders of the Series A Preferred Stock and parity capital stock, if any, shall be insufficient to permit in full the payment of the Liquidation Preference, then all such assets of the Corporation shall be distributed ratably among the Holders of the Series A Preferred Stock and parity capital stock, if any. Neither the consolidation or merger of the Corporation nor the sale, lease or transfer by the Corporation of all or a part of its assets shall be deemed a liquidation, dissolution or winding up of the Corporation for purposes of these Liquidation Rights.
Stock Splits, Dividends and Distributions
If the Corporation, at any time while any Series A Convertible Preferred Stock is outstanding, (a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock payable in shares of its capital stock [whether payable in shares of its Common Stock or of capital stock of any class], (b) subdivide outstanding shares of Common Stock into a Registrationlarger number of shares, (c) combine outstanding shares of Common Stock into a smaller number of shares. or (d) issue reclassification of shares of Common Stock for any shares of capital stock of the Corporation, the conversion ratio, as defined, shall be adjusted by multiplying the number of shares of Common Stock issuable by a fraction of which the numerator shall be the number of shares of Common Stock of the Corporation outstanding after such event and of which the denominator shall be the number of shares of Common Stock outstanding before such event. Any adjustment made pursuant to this paragraph (e)(iii) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
Conversion Rights Agreement
Each share of Series A Preferred Stock is convertible, at the option of the holder, into 1,000 shares of Common Stock.
Voting Rights
The Holders of shares of Series A Convertible Preferred Stock shall be entitled to vote on March 28, 2010 with each investor whereby as soon as possible but in any event not later than the 120th day after March 28, 2010, the Company agreed to file a registration statement on Form S-1. Upon the failureand all matters considered and voted upon by the CompanyCorporation’s Common Stock. The Holders of the Series A Convertible Preferred Stock shall be entitled to have1,000 (one thousand) votes per share of Common Stock.
As a result of all preferred stock issuances, the Registration Statement declared effective within 180 days fromtotal issued and outstanding shares of preferred stock were and shares as of June 30, 2021 and March 31, 2021, respectively.
NOTE 9 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of this Report, the closing of our offering (September 27, 2010),date the financial statements were available to be issued, noting the following items that would impact the accounting for events or transactions in the current period or require additional disclosure.
On August 2, 2021, the Company may be requiredsold its first set of 2,500 debit cards to issue additionala customer plus charged a one-time set up fee of $3,500, for a total cash consideration of $19,500 and recorded its first revenues since the commencement of its business plan.
From July 1, 2021 to August 4, 2021, the Company sold through a private placement, (valued at $0.02 per share) to each Subscriber as liquidated damages. The penalty amount is equal to five percent of the subscription price paid by each subscriber for the first month starting September 27 2010, if the Registration Statement is not declared effective by that date. The penalty amount equals an additional 87,500 total common shares that may be issued to all the investors for a one month delay and one percenttotal cash consideration of the subscription price paid in shares (valued at $0.02 per share) to each subscriber for every month thereafter. The maximum amount of liquidated damages due shall not exceed twenty five percent of the Subscription Price paid by the Subscribers (valued at $0.02 per share), which equals a potential maximum of 437,500 additional total common shares that may be issued to all subscribers.$116,000. shares of its common stock
8. SUBSEQUENT EVENTS
The Company evaluated subsequent events through the time of issuance of the financial statements. Pursuant to the requirements of FASB ASC Topic 855, there were no events or transactions occurring during this subsequent event reporting period that require recognition or disclosure in the financial statements.
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[OUTSIDE BACK COVER]
BlueOne Card, Inc.
[A Nevada Corporation]
948,992 Shares
Common Stock
PROSPECTUS
BlueOne Card, Inc.
4695 MacArthur Court
Suite 1100
Newport Beach, CA 92660
(800) 210-9755
_______________, 2021
Until ____, 2010 (X days after the commencement of this offering), 2021, all dealers that effect transactions in these securities,our shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forthis an itemized statement of the costs andestimated amounts of all expenses other than underwriting discounts and commissions, payable by us in connection with the saleregistration of the common stock, being registered.other than underwriting discounts and commissions. All amounts other thanare estimates except the SEC registration fee, are estimates. Wefee.
Securities and Exchange Commission - Registration Fee | $ | 51.77 | ||
Edgarizing Costs | 3,000 | |||
Accounting Fees and Expenses | 10,000 | |||
Legal Fees and Expenses | 4,000 | |||
Miscellaneous | 2,000 | |||
Total | $ | 19,051.77 |
None of the expenses of the offering will pay all these expenses.
Commission filing fee |
| $ | 300 |
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Legal fees and expenses |
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| 10,000 |
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Accounting fees and expenses |
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| 2,000 |
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Printing and marketing expenses |
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| 500 |
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Miscellaneous |
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| 200 |
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Total |
| $ | 13,000 |
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be paid by the selling security holders.
Item 14. Indemnification of Directors and Officers
Our bylaws
Nevada Revised Statutes (“NRS”) 78.138(7) provides that, subject to limited statutory exceptions and unless the articles of incorporation or an amendment thereto (in each case filed on or after October 1, 2003) provide for the indemnificationgreater individual liability, a director or officer is not individually liable to a corporation or its stockholders or creditors for any damages as a result of our present and prior directors and officersany act or any person who may have served at our requestfailure to act in his or her capacity as a director or officer unless it is proven that: (i) the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and (ii) the breach of those duties involved intentional misconduct, fraud or a knowing violation of law.
NRS 78.7502(1) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, in which we own shares of capital stockpartnership, joint venture, trust or of which we are a creditor,other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by themthe person in connection with the defenseaction, suit or proceeding if the person (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any actions, suitscriminal action or proceedings in which they,proceeding, had no reasonable cause to believe the conduct was unlawful. NRS 78.7502(2) provides that a corporation may indemnify any person who was or any of them, are made parties, oris a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favour by reason of beingthe fact that the person is or having been director(s)was a director, officer, employee or officer(s)agent of usthe corporation, or is or was serving at the request of suchthe corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other corporation,enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by the absenceperson in connection with the defence or settlement of negligencethe action or misconduct insuit if the performance of their duties. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.
Insofar as indemnification by us for liabilities arising under the Exchange Act may be permitted to our directors, officers and controlling personsperson (a) is not liable pursuant to provisionsNRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Articlescorporation. To the extent that a director, officer, employee or agent of Incorporation and Bylaws,a corporation has been successful on the merits or otherwise we have been advised that in defence of any such action, suit or proceeding, or in defence of any claim, issue or matter therein, the opinion ofcorporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defensedefence. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person is asserted byliable pursuant to NRS 78.138 or did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, or that, with respect to any criminal action or proceeding, he or she had reasonable cause to believe that the conduct was unlawful. Indemnification may not be made for any claim, issue or matter as to which such director, officer or controllinga person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settledadjudged by controlling precedent, submit to a court of appropriatecompetent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the question whethercorporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
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NRS 78.751(1) provides that any discretionary indemnification pursuant to NRS 78.7502 (unless ordered by us is against public policya court or advanced pursuant to NRS 78.751(2)), may be made by the corporation only as expressedauthorized in the Act and will be governed byspecific case upon a determination that indemnification of the final adjudication of such issue.
At the present time, there is no pending litigation or proceeding involving a director, officer, employee or agent is proper in the circumstances. The determination must be made (i) by the stockholders; (ii) by the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding; (iii) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or (iv) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. NRS 78.751(2) provides that the corporation’s articles of incorporation or bylaws, or an agreement made by the corporation, may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the corporation.
Under the NRS, the indemnification pursuant to NRS 78.7502 and advancement of expenses authorized in or ordered by a court pursuant to NRS 78.751:
● | Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in the person’s official capacity or an action in another capacity while holding office, except that indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the advancement of expenses made pursuant to NRS 78.751(2), may not be made to or on behalf of any director or officer if a final adjudication establishes that the director’s or officer’s acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and | |
● | Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person. |
A right to indemnification or to advancement of expenses arising under a provision of the articles of incorporation or any bylaw is not eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
Our governing documents provide that to the fullest extent permitted under the NRS (including, without limitation, to the fullest extent permitted under NRS 78.7502 and 78.751(3)) and other agent of oursapplicable law, that we shall indemnify our directors and officers in their respective capacities as such and in any and all other capacities in which indemnification would be required or permitted. We are not awareany of any threatened litigation or proceeding which may result in a claim for such indemnification.them serves at our request.
Item 15. Recent Sales of Unregistered Securities
On
From July 6, 2007 we issued 2,000,000 shares of our common stock at a price of $0.005 per share1, 2021 to Irina Goldman uponAugust 26, 2021, the formation of our company for $10,000. These securities were issued without a prospectus pursuant to Section 4(2) of the Securities Act.
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On December 17, 2008, we issued 450,000 shares of our common stock at a price of $0.02 per share to Irina Goldman for cash proceeds of $9,000. These securities were issued without a prospectus pursuant to Section 4(2) of the Securities Act.
We relied on Section 4(2) of the Securities Act in connection with the above issuances of securities based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offeree and us.
On March 28, 2010, we completedCompany sold through a private placement, in which we62,000 shares of its common stock to 30 investors for a total cash consideration of $124,000.
The shares of common stock were issued and sold pursuant to the selling stockholders an aggregate of 1,750,000 shares of our common stock, for an aggregate purchase price of $35,000, or $0.02 per share. As a result of this private placement, we raised approximately $35,000 in gross proceeds, which left us with approximately $35,000 in net proceeds after the deduction of offering expenses in the amount of $0. The foregoing issuance was made in reliance upon exemptions provided by Rule 903 of Regulation S of the Securities Act. We were able to rely on Rule 903 because (a) the subscriber was neither a U.S. person nor acquiring the shares for the account or benefit of any U.S. person, (b) the subscriber agreed not to offer or sell the shares (including any pre-arrangement for a purchase by a U.S. person or other person in the U.S.) directly or indirectly, in the United States or to any natural person who is a resident of the United States or to any other U.S. person as defined in Regulation S unless registered under the Securities Act and all applicable state laws or an exemption from the registration requirements of Section 5 of the Securities Act and similar state laws is available, (c) the subscriber made his, her contained in Section 4(a)(2) and/or its subscription from the subscriber’s residence or offices at an address outside of the U.S. and (d) the subscriber or the subscriber’s advisor has such knowledge and experience in financial and business matters that the subscriber is capable of evaluating the merits and risks of, and protecting his interestsRegulation D thereof. No sales commissions were paid in connection with an investment in our company.the sales of these securities and no general solicitation was used.
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Item 16. Exhibits and Financial Statement Schedules
Exhibits
The following exhibits are included with this prospectus:
Number |
Description of Exhibit |
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3.1 (1) | Articles of Incorporation | |||
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3.4(2) | Bylaws | |||
4.1(2) | Certificate of Designation for Series A Preferred Stock | |||
5.1* | Legal Opinion of Business Legal Advisors, LLC | |||
10.1(2) | Agreement to Partially Convert Series A Convertible Preferred Stock to Common Stock | |||
10.2(2)† | Employment Agreement dated December 1, 2020 with Mr. James Koh | |||
10.3(2)(3) | Reseller Agreement dated April 15, 2020 with EndlessOne Global Inc. | |||
23.1* | Consent of Haynie & Company | |||
23.2* | Consent of Business Legal Advisors, LLC (included in Exhibit 5.1) | |||
101 | XBRL data files of Financial Statements and Notes relating to this Form S-1± |
* Filed herewith.
† | Management contract or compensatory plan |
± | In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 relating to this Form S-1 shall be deemed “furnished” and not “filed.” |
(1) | Filed as Exhibit 3.1 to the Company’s Form S-1/A filed with the Commission on July 28, 2010 under Commission File No. 333-168346 | |
(2) | Filed as an exhibit to the Company’s Form 10 filed with the Commission on December 29, 2020 under Commission File No. 000-56060 | |
(3) | Portions of the | |
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Item 17. Undertakings
The undersigned registrant hereby undertakes to:undertakes:
File,
(1) To file, during any period in which it offers or sells securities,sales are being made, a post-effective amendment to this registration statement to:
(a)
(i) Include any prospectus required by Sectionsection 10(a)(3) of the Securities Act, andAct;
(b)
(ii) Reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or together,in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high endand of the estimated maximum offering range may be reflected in the form of prospectus filed with the CommissionSEC pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement, andstatement.
(c)
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(iii) Include any additionalmaterial or changed material information onwith respect to the plan of distribution.distribution not previously disclosed in the registration statement or a material change to such information in the registration statement.
For
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability under the Securities Act treat each post-effective amendment as a new registration statementto any purchaser in the initial distribution of the securities, offered, and the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities at that time to be the initial bona fide offering.
File a post-effective amendmentpurchaser, if the securities are offered or sold to remove from registrationsuch purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities that remain unsold at the endto such purchaser:
(i) Any preliminary prospectus or prospectus of the offering.
For determining liability underundersigned registrant relating to the Securities Act, treat the information omitted from the form of prospectusoffering required to be filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under424 of Regulation C of the Securities Act as part of this registration statement asAct;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the timeundersigned registrant or used or referred to by the Commission declared it effective.undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defensedefence of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Until _______, all dealers that affect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments and subscriptions.
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Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amended registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Citycity of Suffern, NYNewport Beach, California, on the 27th day of July, 2010.August 31, 2021.
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By: | /s/ | ||
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POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this amended registration statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below constitutes and appoints Irina Goldman and Fung Chun Ngai, and each of them individually, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.stated.
Name |
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/s/ James Koh | Director, Chief Executive Officer, and Chief Financial Officer | August 31, 2021 | ||
James Koh |
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