10-Q: BlueOne Card Reports Q1 Loss, Cites Going Concern Risk

Sentiment:

Quarterly Report 30 September 2025 3:50 PM

BlueOne Card, Inc. reported increased net losses and a critical going concern warning for Q1 2025, despite generating initial revenue from its Millennium EBS acquisition.

Delay expectedThe $500,000 cash consideration for the Millennium EBS acquisition, originally due within 90 days of the December 13, 2024 closing (i.e., by March 13, 2025), has been mutually extended to December 31, 2025, with $430,000 remaining unpaid.

Capital raiseThe company's continuation as a going concern is dependent upon its ability to obtain necessary financing to continue operations.Plans to finance operations include seeking equity and debt financing, alliances, or other partnership agreements.The sale of additional equity or debt securities may result in additional dilution to shareholders.

Worse than expectedThe net loss attributable to common shareholders increased to $274,030 from $259,359 in the prior year period.The cash balance significantly decreased to $328, indicating severe liquidity issues.The company explicitly states a 'substantial doubt' about its ability to continue as a going concern.Disclosure controls and procedures were deemed 'not effective' due to material weaknesses.

Summary

BlueOne Card, Inc. (BCRD) reported a net loss attributable to common shareholders of $274,030 for the three months ended June 30, 2025, compared to $259,359 for the same period in 2024.
The company generated $95,556 in revenues for the quarter, primarily from implementation and subscription fees related to the Millennium EBS (MEI) Payment Hub platform, a significant increase from $0 in the prior year period.
Operating expenses rose to $433,479 for the quarter, up from $257,605 in the prior year, largely due to the consolidation of MEI's expenses.
Cash on hand decreased dramatically to $328 as of June 30, 2025, from $46,018 at the beginning of the period.
A substantial doubt exists regarding the company's ability to continue as a going concern for the next 12 months, citing accumulated deficit of $5,197,025 and a working capital deficit of $1,906,788.
Disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to material weaknesses including lack of segregation of duties and internal control documentation.

Sentiment

Score: 2

Explanation: Despite strategic acquisitions and new revenue streams, the company faces severe liquidity issues with a critically low cash balance, increasing net losses, a substantial going concern doubt, and ineffective internal controls. While the strategic direction is positive, the immediate financial health is highly precarious.

Positives

Generated first-time revenues of $95,556 from implementation and subscription services for the three months ended June 30, 2025, following the Millennium EBS acquisition.
The acquisition of Millennium EBS, Inc. (MEI) positions the company as a diversified global provider of advanced payment infrastructure solutions, expanding its market reach in fintech.
Strategic partnerships have been formed with Abeam Consulting to promote ISO 20022 and Payment Hub solutions.
Secured an engagement with a large commercial bank in Nepal for ISO 20022 standard transition, serving as a critical reference case in South Asia.
In discussions to form a strategic partnership with a Fortune 500 company to expand global reach of the ISO 20022 compliant Payment Hub platform.
Introduced BlueOne Pay, a platform for seamless, low-cost conversion of stablecoin USDT into USD for remittances, targeting a large and underserved demographic.

Negatives

Net loss attributable to common shareholders increased to $274,030 for the quarter, up from $259,359 in the prior year period.
Cash balance is critically low at $328 as of June 30, 2025, down from $46,018 at March 31, 2025.
Accumulated deficit increased to $5,197,025 and working capital deficit reached $1,906,788 as of June 30, 2025.
Disclosure controls and procedures are not effective due to material weaknesses, including lack of segregation of duties and internal control documentation.
The company has not yet generated significant revenues on a commercial scale and does not expect to until the first calendar quarter of 2026.
Cash provided by financing activities significantly decreased to $6,350 for the quarter, compared to $75,000 in the prior year period.
An acquisition payable of $430,000 to the sole stockholder of Millennium EBS was due March 13, 2025, and has been extended to December 31, 2025, indicating liquidity constraints.

Risks

Substantial doubt exists regarding the company's ability to continue as a going concern for the next 12 months, dependent on continued financial support, additional financing, and attainment of profitability.
Inability to obtain adequate capital could force the company to cease operations.
Material weaknesses in internal control over financial reporting, including lack of segregation of duties and internal control documentation, pose risks to financial reporting reliability.
Reliance on a single financial institution for cash, which could have a significant adverse impact if access to funds is lost.
The fair value of assets acquired and liabilities assumed in the Millennium EBS acquisition is provisional and subject to revaluation within a one-year measurement period, potentially impacting financial statements.
Future capital requirements are substantial, and additional equity or debt financing may result in dilution or restrictive covenants.

Future Outlook

The company anticipates potential revenue growth over the next year, driven by the newly integrated Millennium EBS Payment Hub platform. It aims to work towards meeting NASDAQ listing requirements by Q4 2026, subject to market conditions and other factors. Commercial scale revenue generation is not expected until the first calendar quarter of 2026.

Management Comments

Management believes that the expectations reflected in any of our forward-looking statements are reasonable, but actual results could differ materially.
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 profitability.
Our disclosure controls and procedures are not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting.

Industry Context

BlueOne Card's acquisition of Millennium EBS positions it to capitalize on major, non-discretionary shifts in the global financial landscape, including the mandatory transition to ISO 20022, the modernization of legacy banking systems, and the growth in digital remittances. The introduction of BlueOne Pay for stablecoin-to-USD remittances aligns with the increasing acceptance of U.S. dollar-backed stablecoins and addresses the needs of the underbanked and digital nomads in the $150 billion outbound U.S. remittance market.

Comparison to Industry Standards

The Millennium EBS Payment Hub has successfully enabled a major banking institution in Sri Lanka and Gayana to transition to ISO 20022 standards, showcasing its role as a solution for banks seeking scalability, compliance, and secure financial messaging. This indicates a competitive offering in the payment orchestration and modernization platform market.
The company's engagement with a large commercial bank in Nepal for ISO 20022 transition serves as a critical reference case in the South Asian market, suggesting a competitive foothold in emerging markets for financial technology solutions.
BlueOne Pay's stablecoin-to-USD conversion offers a cost-effective solution compared to traditional bank wires or SWIFT, potentially disrupting traditional remittance services by catering to users of crypto assets like USDT, which has a daily trading volume exceeding $70 billion.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Director	NA	Sole shareholder of Millennium EBS Inc.	2024-12-13	Appointment upon consummation of the acquisition of Millennium EBS Inc.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weaknesses	Disclosure controls and procedures are not effective due to material weaknesses including lack of segregation of duties, lack of internal control documentation, and lack of monitoring controls over the evaluation of impairment of intangibles and long-lived assets.	2025-06-30	Raises concerns about the reliability of financial reporting and the company's ability to accurately record, process, summarize, and report financial information.

Related Party Transactions

The CEO has provided advances to the company for working capital, totaling $24,072 as of June 30, 2025. These funds are unsecured, non-interest bearing, and due on demand.
Compensation payable to the CEO totaled $835,861 as of June 30, 2025, with $54,903 recorded as compensation expense for the quarter.
An acquisition payable of $430,000 to the sole stockholder of Millennium EBS Inc. (who is also a director) remains unpaid and was extended to December 31, 2025.
The company recorded a consulting expense of $48,000 payable to the sole stockholder of Millennium EBS Inc. for the quarter.
The total amount payable to the sole shareholder of MEI amounted to $554,752 as of June 30, 2025.
The company is obligated to pay for services to Millennium Consultants, Inc., an entity owned by the sole selling stockholder of MEI and director, totaling $152,854 as of June 30, 2025.

Stakeholder Impact

**Shareholders:** Face significant dilution risk from potential future capital raises, increased net losses, and a substantial going concern warning. The stock price is highly likely to be negatively impacted by the financial instability and control weaknesses.
**Creditors:** The extension of the acquisition payable and the overall going concern doubt indicate increased credit risk.
**Employees (including CEO):** The CEO has significant compensation payable and has provided advances, indicating a reliance on his financial support and potential impact on his compensation if the company's financial situation deteriorates further.
**Customers (Banks, FIs, Fintechs):** The company's ability to deliver on its new payment hub and remittance solutions could be jeopardized by its financial instability, potentially impacting customer trust and service continuity.

Next Steps

Generate revenues on a commercial scale, expected to commence during the first calendar quarter of 2026.
Obtain necessary financing to continue operations, potentially through equity, debt, or partnership agreements.
Address material weaknesses in internal control over financial reporting, including lack of segregation of duties and internal control documentation.
Work towards meeting NASDAQ listing requirements by Q4 2026, subject to market conditions.
Finalize the fair value valuation of assets acquired and liabilities assumed in the Millennium EBS acquisition within the one-year measurement period.

Key Dates

Date	Description
2007-07-06	BlueOne Card, Inc. (formerly Avenue South Ltd.) incorporated in Nevada.
2011-09-30	Company changed name to TBSS International, Inc. and engaged in gold mining and construction.
2019-04-26	Corporate Compliance, LLC filed re-application for custodianship over TBSS International, Inc.
2019-10-15	Company changed name to Manneking Inc. and executed a 1-for-100 reverse stock-split.
2020-06-30	Company changed name to BlueOne Card, Inc. and executed another 1-for-100 reverse stock-split.
2020-07-23	FINRA corporate action announced on Daily List for trading symbol change to BCRD.
2020-08-27	Executed month-to-month cancellable operating lease for office space in an executive suite.
2020-09-07	Paid security deposit for executive suite office lease.
2020-10-26	Executed non-cancellable operating lease agreement for principal office.
2020-10-28	Paid security deposit for principal office lease.
2020-12-01	Entered into employment agreement with CEO for a three-year term.
2021-01-01	Monthly rent for executive suite office increased to $279.
2021-11-25	Executed month-to-month lease for principal office facility at a monthly rental of $6,500.
2022-03-11	Board of Directors adopted the 2022 Stock Incentive Plan.
2022-07-12	Executed a non-cancellable operating lease for a vehicle, commencing on this date.
2022-10-01	Monthly rent for executive suite office increased to $289.
2023-04-13	Executed a non-cancellable office space lease in a retail shopping center (J Plaza).
2023-12-18	Terminated relationship with previous sole vendor for prepaid debit cards and software.
2024-02-27	Entered into an agreement with a new vendor for prepaid debit cards and gift cards.
2024-04-08	Issued 15,000 shares of common stock to six investors to settle $60,000 in stock subscriptions.
2024-10-25	Entered into a Stock Exchange and Acquisition Agreement with Millennium EBS, Inc. (MEI) and Shinto Matthew.
2024-12-13	Articles of Exchange filed, MEI acquisition closed, and BCI shares issued to MEI shareholder.
2024-12-14	Start date for loss allocated to non-controlling interest for MEI.
2025-03-01	Company and sole stockholder of MEI mutually agreed to extend payment of cash consideration to December 31, 2025.
2025-03-13	Original due date for $500,000 cash consideration for MEI acquisition.
2025-03-31	End of previous fiscal quarter.
2025-06-30	End of current reporting period for the Quarterly Report on Form 10-Q.
2025-07-11	Expiration date of vehicle lease.
2025-08-27	Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC.
2025-09-30	Date of filing of this Quarterly Report on Form 10-Q.
2025-12-31	Extended due date for $430,000 cash consideration for MEI acquisition.
2026-03-31	Expected recognition of deferred revenues over the nine months ending this date.
2026-Q1	Expected commencement of generating revenues on a commercial scale.
2026-Q4	Target for meeting NASDAQ listing requirements, subject to market conditions.

Recommendation

strong sell

The company faces severe financial distress, evidenced by a critically low cash balance ($328), increasing net losses, a substantial going concern warning, and a significant working capital deficit. The disclosure of ineffective internal controls further exacerbates concerns about financial reporting reliability. While the acquisition of Millennium EBS and new revenue streams offer strategic potential, the immediate financial instability and high operational risks make the stock a strong sell. The company's survival is explicitly dependent on securing additional financing, which, if obtained, would likely lead to significant shareholder dilution. The current financial position presents an unacceptable level of risk for investors.

Keywords

Fintech, Payment Hub, ISO 20022, Remittance, Stablecoin, USDT, Prepaid Card, Financial Technology, SEC Filing, Quarterly Report, BlueOne Card, Millennium EBS

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