NOTE 7 – COMMITMENTS AND CONTINGENCIES

Leases

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

Summary of Non-Cancellable Operating Leases as of December 31, 2025:

 SCHEDULE OF NON-CANCELLABLE OPERATING LEASES

Vehicle

On May 17, 2025, the Company executed a non-cancellable operating lease for a vehicle with the lease commencing on May 17, 2025 for a 3three-year term. The Company paid $7,578 at the execution of the lease which included $2,210 as first month payment, and $5,368 as vehicle registration, capitalized cost reduction and other handling fees. The Company recorded rent expenses for this vehicle lease of $6,446 and $23,252 for the three months and nine months ended December 31, 2025, and $0 and $0 for the three months and nine months ended December 31, 2024 respectively. The lease expires on May 16, 2028.

Supplemental balance sheet information related to the vehicle lease is as follows as of December 31, 2025:

 SCHEDULE OF SUPPLEMENTAL INFORMATION UNDER OPERATING LEASE

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

Anticipated future minimum lease payments are as follows:

 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES

Office Lease – J Plaza

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

The Company recorded rent expense including common area maintenance for this office lease of $11,359 and $34,077 for the three months and nine months ended December 31, 2025, and $11,359 and $34,077 for the three months and nine months ended December 31, 2024, respectively.

BLUEONE CARD, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Unaudited)

Supplemental balance sheet information related to the office lease is as follows as of December 31, 2025:

 SCHEDULE OF SUPPLEMENTAL INFORMATION UNDER OPERATING LEASE

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

Anticipated future minimum lease payments are as follows:

 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES

Office Leases - Others

On August 27, 2020, the Company formally executed a month-to-month cancellable operating lease for leasing office space in an executive suite, commencing on September 1, 2020 for $259 per month. The Company paid a security deposit of $259 on September 7, 2020. The monthly rent increased to $279 effective January 1, 2021 and then to $289 effective October 1, 2022. The Company has recorded rent expenses of $867 and $2,601 for the three months and nine months ended December 31, 2025, and $867 and $2,601 for the three months and nine months ended December 31, 2024, respectively.

On October 26, 2020, the Company executed a non-cancellable operating lease agreement for its principal office for a monthly rent of $5,500, with the lease commencing on November 1, 2020 for a period of 12 months. The Company paid a security deposit of $5,500 on October 28, 2020. On November 25, 2021, the Company executed a month-to-month lease for this office facility at a monthly rental of $6,500. The Company has recorded rent expenses of $19,500 and $58,500 for the three months and nine months ended December 31, 2025, and $19,500 and $58,500 for the three months and nine months ended December 31, 2024, respectively.

The Company has recorded total rent expense for all above leases of $41,172 and $118,430 for the three months and nine months ended December 31, 2025, and $37,789 and $113,146 for the three months and nine months ended December 31, 2024, respectively.

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

Employment Agreement

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

Pursuant to the Agreement, the Officer is entitled to an annual base salary of $150,000 and that amount is subject to an automatic 10% annual increase on the anniversary date (See Note 6).

Legal Costs and Contingencies

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

If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. The Company was not aware of any loss contingencies as of December 31, 2025.

Acquisition Payable

As discussed in Note 4, the acquisition payable of $500,000 was due to be paid 90 days from the acquisition closing date which was March 13, 2025. As of December 31, 2025 and March 31, 2025, $430,000 of this acquisition payable remained unpaid. On March 1, 2025, the Company and the sole selling stockholder of Millenium EBS mutually agreed to extend the payment of cash consideration to June 30, 2026.

BLUEONE CARD, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

(Unaudited)