UPAY, Inc. (UPYY) Q3 shows bigger net loss and going-concern risk
Filing Impact
Filing Sentiment
Form Type
10-Q
UPAY, Inc. reported modestly higher quarterly revenue but a much larger loss for the quarter ended November 30, 2025. Revenue for the three months rose to
For the nine months, revenue was
Positive
- Improving cash burn and operating efficiency: Net cash used in operating activities decreased to
$259,375 for the nine months ended November 30, 2025 from$741,637 a year earlier, while gross profit and operating expenses both moved in a favorable direction. - Quarterly revenue growth: Revenue for the three months ended November 30, 2025 increased to
$184,587 from$150,366 , mainly from higher transactional revenue in South African operations.
Negative
- Large loss driven by debt settlement: A loss on settlement of debt of
$904,400 contributed to a quarterly net loss of$1,032,123 and a nine‑month net loss of$1,291,361 . - Weak balance sheet and stockholders’ deficit: As of November 30, 2025, total assets of
$211,845 were far below total liabilities of$698,196 , resulting in a stockholders’ deficit of$486,351 and negative working capital. - Going-concern uncertainty and financing dependence: Management states there is substantial doubt about the company’s ability to continue as a going concern, noting insufficient revenues and an intention to fund operations through equity financings.
- Material weaknesses in internal controls: Disclosure controls and procedures were concluded to be not effective, with weaknesses in the control environment and no independent board members or audit committee financial expert.
Insights
UPAY’s Q3 shows higher revenue but a much larger loss and ongoing going-concern risk.
UPAY increased quarterly revenue to
Despite this, the capital structure remains weak. A loss on settlement of debt of
Management explicitly states that current revenues are insufficient to execute the business plan and that operations are expected to be funded through equity financing, raising dilution and financing-dependence concerns. Cash flow from operations improved, with net cash used falling to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
November 30
, 2025
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____to .
Commission File Number 333-212447
(Exact name of small business issuer as specified in its charter)
NEVADA | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
th
Floor(Address of principal executive offices)
(972 ) 888-6052
(Company’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
x
No
¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes
x
No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
¨ | Smaller reporting company | |||
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected no t to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
¨
No
The Company has 17,495,211 common shares outstanding as of January 13, 2026
TABLE OF CONTENTS
Page | ||
PART I — Financial Information | ||
Item 1. | Consolidated Financial Statements (unaudited) | F-1 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 4 |
Item 4. | Controls and Procedures | 5 |
PART II — Other Information | 6 | |
Item 1. | Legal Proceedings | 6 |
Item 1A. | Risk Factors | 6 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 6 |
Item 3. | Defaults Upon Senior Securities | 6 |
Item 4. | Mine Safety Disclosures | 6 |
Item 5. | Other Information | 6 |
Item 6. | Exhibits | 6 |
Signatures | 7 |
| 2 |
UPAY, Inc.
C
onsolidated Financial Statements
(
unaudited
)Index | |
Table of Contents | |
Consolidated Balance Sheets (unaudited) | F-2 |
Consolidated Statements of Operations and Comprehensive Loss (unaudited) | F-3 |
Consolidated Statements of Stockholders’ Deficit and Accumulated Other Comprehensive Loss (unaudited) | F-4 |
Consolidated Statements of Cash Flows (unaudited) | F-6 |
Notes to the Consolidated Financial Statements (unaudited) | F-7 |
| F-1 |
UPAY, INC.
C
o
nsolidated Balance Sheets(Expressed in U.S. dollars)
November 30, 2025 | February 28, 2025 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable, net of allowance | ||||||||
Prepaid expenses and other current assets | ||||||||
Total Current Assets | ||||||||
Property and Equipment, Net (Note 3) | ||||||||
Right-of-use Assets, Net (Note 4) | ||||||||
Deposit (Note 11) | ||||||||
Total Assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | $ | ||||||
Due to related parties (Note 5) | ||||||||
Current portion of lease liabilities (Note 7) | ||||||||
Current portion of notes payable (Note 6) | ||||||||
Current portion of notes payable in default (Note 6) | ||||||||
Notes Payable – Related parties (Note 5) | ||||||||
Total Current Liabilities | ||||||||
Non-Current Liabilities | ||||||||
Lease Liabilities (Note 7) | ||||||||
Notes Payable (Note 6) | ||||||||
Notes Payable – Related Parties (Note 5) | ||||||||
Total Liabilities | ||||||||
Stockholders’ Deficit | ||||||||
Preferred Stock, $ | ||||||||
Common Stock, $ | ||||||||
Common Stock Issuable | ||||||||
Additional Paid-in Capital | ||||||||
Accumulated Deficit | ( | ) | ( | ) | ||||
Accumulated Other Comprehensive Loss | ( | ) | ( | ) | ||||
Total Stockholders ’ Deficit | ( | ) | ( | ) | ||||
Total Liabilities and Stockholders ’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
UPAY, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
(unaudited)
Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
November 30, | November 30, | November 30, | November 30, | |||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||
Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gross Profit | ||||||||||||||||
Expenses | ||||||||||||||||
Depreciation (Note 3) | ||||||||||||||||
General and administrative | ||||||||||||||||
Total Expenses | ||||||||||||||||
Loss Before Other Income (Expenses) and Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Income (Expenses) | ||||||||||||||||
Interest income | ( | ) | ||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Loss on settlement of debt | ( | ) | ( | ) | ||||||||||||
Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for income taxes | ||||||||||||||||
Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Comprehensive Income | ||||||||||||||||
Foreign currency translation adjustments | ( | ) | ||||||||||||||
Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net Loss Per Share – Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Weighted-average Common Shares Outstanding – Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
UPAY, Inc.
Consolidated Statement of Stockholders’ Deficit and Accumulated Other Comprehensive Loss
(Expressed in U.S. dollars)
(unaudited)
Accumulated | ||||||||||||||||||||||||||||
Additional | Common | Other | ||||||||||||||||||||||||||
Common Stock | Paid-in | Stock | Accumulated | Comprehensive | ||||||||||||||||||||||||
Shares | Amount | Capital | Issuable | Deficit | Loss | Total | ||||||||||||||||||||||
Balance – February 29, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustments | – | – | – | – | – | |||||||||||||||||||||||
Balance – May 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Common stock issued for cash | – | – | – | |||||||||||||||||||||||||
Common stock issued for Huntpal LLC acquisition | ( | ) | – | – | – | – | ||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustments | – | – | – | – | – | |||||||||||||||||||||||
Balance – August 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Stock issued for services | – | – | – | |||||||||||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustments | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
Balance – November 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
The accompanying notes are an integral part of these
consolidated
financial statements.| F-4 |
UPAY, Inc.
Consolidated Statement of Stockholders’ Deficit and Accumulated Other Comprehensive Loss
(Expressed in U.S. dollars)
(unaudited)
Accumulated | ||||||||||||||||||||||||||||
Additional | Common | Other | ||||||||||||||||||||||||||
Common Stock | Paid-in | Stock | Accumulated | Comprehensive | ||||||||||||||||||||||||
Shares | Amount | Capital | Issuable | Deficit | Loss | Total | ||||||||||||||||||||||
Balance – February 28, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustment | – | – | – | – | – | |||||||||||||||||||||||
Balance – May 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustment | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||
Balance – August 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
Common stock issued for cash | – | – | – | – | ||||||||||||||||||||||||
Common stock issued for settlement of debt | – | – | – | |||||||||||||||||||||||||
Common stock issuable for services | – | – | – | – | – | |||||||||||||||||||||||
Net loss | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||
Foreign currency translation adjustment | – | – | – | – | – | |||||||||||||||||||||||
Balance – November 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
UPAY, Inc.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
(unaudited)
Nine Months Ended November 30, 2025 | Nine Months Ended November 30, 2024 | |||||||
Cash Flows from Operating Activities | ||||||||
Net Loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Common stock issued or issuable for services | ||||||||
Depreciation | ||||||||
Provision for bad debts | ||||||||
Loss on settlement of debt | ||||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | ( | ) | ||||||
Prepaid expenses and other current assets | ( | ) | ||||||
Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
Accounts payable – related party | ||||||||
Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
Cash Flows from Investing Activities | ||||||||
Purchase of fixed assets | ( | ) | ||||||
Net Cash Used in Financing Activities | ( | ) | ||||||
Cash Flows from Financing Activities | ||||||||
Proceeds from related party loan | ||||||||
Proceeds from common stock issued for cash | ||||||||
Net Cash Provided by Financing Activities | ||||||||
Effect of Exchange Rate Changes on Cash | ||||||||
Change in Cash and Cash Equivalents | ( | ) | ||||||
Cash and Cash Equivalents - Beginning of Period | ||||||||
Cash and Cash Equivalents - End of Period | $ | $ | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Interest paid | $ | $ | ||||||
Income taxes paid | $ | $ | ||||||
Non-cash Investing and Financing Activities: | ||||||||
Common stock issued for acquisition of Huntpal LLC | $ | $ | ||||||
Common stock issued for debt settlement | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
1. | Nature of Operations and Continuance of Business |
UPAY, Inc. (the “Company”) was incorporated in the State of Nevada on July 8, 2015. Pursuant to a November 4, 2025 Share Exchange Agreement , the Company agreed to acquire all of the issued and outstanding shares of Rent Pay (Pty) Ltd (“Rent Pay”), in exchange for 200,000 shares of the Company’s common stock. The acquisition was a capital transaction in substance and therefore was accounted for as a recapitalization. Rent Pay was incorporated in South Africa on February 1, 2012. Because Rent Pay was deemed to be the acquirer for accounting purposes, the consolidated financial statements are presented as a continuation of Rent Pay and include the results of operations of Rent Pay since incorporation on February 1, 2012, and the results of operations of the Company since the date of acquisition on November 4, 2015. On March 2, 2022, the Company acquired a controlling interest in Miway Finance Inc. (“Miway”) in a transaction between entities under common control. On May 30, 2023, the Company incorporated a wholly-owned subsidiary, Huntpal LLC (“Huntpal”), taking a 51 % controlling interest in Huntpal. On June 13, 2024, the Company acquired the remaining non-controlling interest in Huntpal, increasing its ownership to 100 %. On May 28, 2024, the Company acquired a controlling interest in AML Go (Pty) Ltd (“AML”), a South African entity, which was incorporated on July 3, 2023. AML was determined to be an entity under common control, and the transaction was considered immaterial due to the nominal assets and liabilities at the time of acquisiti
on.
Rent Pay operates principally in South Africa and engages in software development and licensing and provides services to the credit provider industry.
2. | Summary of Significant Accounting Policies |
a) | Basis of Presentation |
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year end is February 28. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Rent Pay and Huntpal LLC, and its controlled subsidiaries, Miway and AML. The Company owns 48 % of Miway and 51 % of AML. All significant intercompany transactions and accounts have been eliminated in consolidation.
b) | Interim Financial Statements |
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end February 28, 2025, have been omitted.
c) | Use of Estimates |
The preparation of consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, and deferred income tax asset valuations. 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.
d) | Going Concern |
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of November 30, 2025, the Company does not have sufficient revenues to execute its business plan. The Company intends to fund operations through equity financing arrangements. There is no assurance that this will be successful. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| F-7 |
e) | Segment Information |
In accordance with the provisions of ASC 280-10,
“Disclosures about Segments of an Enterprise and Related Information”,
the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of November 30, 2025, and February 28, 2025. The Company manages its operations as a single operating segment for the purpose of assessing performance and making operating decisions. Accordingly, all assets are considered to relate to the single operating segment and are consistent with the total assets presented on the Company’s consolidated balance sheet. The Company’s Chief Operating Decision Maker (“CODM”) is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about combined net income from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.f) | Recent Accounting Pronouncements |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its unaudited consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3. | Property and Equipment, Net |
Property and equipment, net, consists of the following:
Cost | Accumulated Depreciation | November 30, 2025 Net Carrying Value | February 28, 2025 Net Carrying Value | |||||||||||||
Computer equipment | $ | $ | $ | $ | ||||||||||||
Computer software | ||||||||||||||||
Furniture and fixtures | ||||||||||||||||
Motor vehicle | ||||||||||||||||
Office equipment | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
During the nine months ended November 30, 2025, the Company recorded depreciation expense of $5,197 (2024 – $5,816 ). During the nine months ended November 30, 2025, the Company acquired $842 (2024 - $nil ) of computer equipment.
4. | Right-Of-Use Assets, Net |
Right-of-use assets, net, consist of the following:
Cost | Accumulated Amortization | November 30, 2025 Net Carrying Value | February 28, 2025 Net Carrying Value | |||||||||||||
Right-of-use building (operating lease) | $ | $ | $ | $ | ||||||||||||
During the nine months ended November 30, 2025, the Company recorded rent expense of $17,599 (2024 – $16,253 ) related to Company’s right-of-use building.
5. | Due to Related Parties |
a) | On March 24, 2021, the Company entered into a promissory note with the Chief Executive Officer (“CEO”) of the Company for $ |
b) | On September 7, 2021, the Company entered into a promissory note with the Company’s CEO for $ |
c) | On February 11, 2022, the Company entered into a promissory note with the Company’s CEO for $ February 11, 2023 . As at November 30, 2025, the outstanding principal is $ |
| F-8 |
d) | On April 14, 2021, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ |
e) | On February 11, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ |
f) | During the year ended February 28, 2022, a third-party lender purchased a promissory note from a company controlled by a significant shareholder of the Company in the amount of $ |
g) | On May 2, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ March 2, 2023 . As at November 30, 2025, the outstanding principal is $ |
h) | On September 9, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ |
i) | On January 31, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ January 31, 2027 . As at November 30, 2025, the outstanding principal is $ |
j) | On March 3, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ March 3, 2027 . As at November 30, 2025, the outstanding principal is $ |
k) | On May 9, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ May 9, 2027 . As at November 30, 2025, the outstanding principal is $ |
l) | On May 22, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ May 22, 2027 . As at November 30, 2025, the outstanding principal is $ |
m) | On July 23, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ July 23, 2027 . As at November 30, 2025, the outstanding principal is $ |
n) | On September 12, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ |
o) | As at November 30, 2025, the Company owes a total of $ |
p) | During the nine months ended November 30, 2025, the Company incurred salary expenses of $ |
| F-9 |
q) | During the nine months ended November 30, 2025, the Company incurred directors’ fees of $ Director and COO of the Company pursuant to a Director Agreement (Note 10(b)). |
r) | During the nine months ended November 30, 2025, the Company incurred directors’ fees of $ |
s) | During the nine months ended November 30, 2025, the Company incurred management fees of $ |
6. | Notes Payable |
a) | On May 20, 2020, the Company entered into a promissory note with a third-party lender for $ $ |
b) | On May 27, 2020, the Company entered into a promissory note with the U.S. Small Business Administration for $ |
c) | On October 22, 2021, the Company entered into a promissory note with a third-party lender for $ (February 28, 2025 – $ included in accounts payable and accrued liabilities. |
7. | Lease Liabilities |
On February 1, 2025, the Company entered a one-year lease with a two-year renewal option for office space in South Africa. Rental payments are due at the beginning of each month and increase at an annual escalation rate of 6 %. The base monthly rental rate is $1,907 (R34,832 ). The interest rate underlying the obligation in the lease was 11 % per annum.
The following is a schedule by years of future minimum lease payments under the remaining finance leases together with the present value of the net minimum lease payments as of November 30, 2025:
Years ending February 28: | Building Lease (Operating Lease) | |||
2026 | $ | |||
2027 | ||||
2028 | ||||
Net minimum lease payments | ||||
Less: amount representing interest payments | ( | ) | ||
Present value of net minimum lease payments | ||||
Less: current portion | ( | ) | ||
Long-term portion | $ | |||
8. | Common Stock |
Share transactions for the nine months ended November 30, 2025:
a) | On October 8, 2025, the Company issued |
b) | On November 11, 2025, the Company issued |
c) | During the nine months ended November 30, 2025, the Company accrued |
| F-10 |
Share transactions for the nine months ended November 30, 2024:
a) | On June 13, 2024, the Company issued |
b) | On July 22, 2024, the Company issued |
c) | On September 6, 2024, the Company issued |
d) | During the nine months ended November 30, 2024, the Company accrued $ |
9. | Concentrations |
The Company’s revenues were concentrated among two customers for the nine months ended
November 30
, 2025, and for the nine months ended
November 30
, 2024.
Customer | Nine months ended November 30, 2025 | |||
1 | % | |||
2 | % | |||
Customer | Nine months ended November 30, 2024 | |||
1 | % | |||
2 | % | |||
The Company’s receivables were concentrated among three customers as at
November 30
, 2025, and February 28, 2025:
Customer | November 30, 2025 | |||
1 | % | |||
2 | % | |||
3 | % | |||
Customer | February 28, 2025 | |||
1 | % | |||
2 | % | |||
3 | % | |||
10. | Commitments and Contingencies |
a) | On September 1, 2022, the Company entered into an agreement with a Director of the Company for a term of 12 months. In consideration for the services to be provided, the Company agreed to pay the Director February 29, 2024 , the Company recognized board member compensation of $ February 29, 2024 , another |
On August 16, 2023, the Company extended its agreement with the Director for a new term of 12 months, effective September 1, 2023. In consideration of services to be rendered, the Company shall pay the director 100,000 restricted shares of common stock, of which 50,000 shares will vest every 6 months over the term. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $50,000 , representing a fair value of 50,000 shares of common stock issuable for services rendered for the period from March 2024 to August 2024. On February 26, 2025, the Company issued the 50,000 shares of common stock issuable.
| F-11 |
On September 1, 2024, the Company extended its agreement with the Director for a new term of 24 months, effective September 1, 2024. In consideration of services to be rendered, the Company shall pay the director 200,000 restricted shares of common stock, of which 100,000 shares will vest every 12 months over the term. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $33,500 , representing a fair value of 50,000 shares of common stock issuable for services rendered for the period from September 2024 to February 2025. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $50,250 , representing a fair value of 75,000 shares of common stock issuable for services rendered for the period from March 2025 to November 2025.
As at
November 30, 2025
, a total of 125,000 shares (February 28, 2025 – 50,000 shares) of common stock remain issuable to the director.
b) | On March 1, 2023, the Company entered into agreements with a Director and Chief Operating Officer of the Company for director services and management services for a term of |
On March 1, 2024, the Company extended its agreement with the Director for a new term of 30 months, effective March 1, 2024. In consideration of services to be rendered, the Company shall pay the director 250,000 restricted shares of common stock, of which 100,000 shares will vest on or about September 1, 2025, with the remaining 150,000 shares vesting on or about September 1, 2026. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $70,000 representing a fair value of 100,000 shares of common stock issuable for services rendered for the period from March 2024 to February 2025. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $52,500 representing a fair value of 93,750 shares of common stock issuable for services rendered for the period from March 2025 to November 2025.
As at
November 30
, 2025, a total of 175,000 (February 28, 2025 – 100,000 shares) shares of common stock remain issuable to the officer and director.
11. | Deposit |
On October 15, 2021, the Company paid a R800,000 deposit to establish an electronic funds transfer debit facility with a vendor, which does not require a physical facility. During the year ended February 29, 2024, R600,000 of the deposit was returned to the Company. As at November 30, 2025, the balance of the deposit was $11,653 (R200,000 ) (February 28, 2025 – $10,807 (R200,000 )). The deposit will remain for as long as the Company uses the facility.
12. | Subsequent Event |
Management has evaluated subsequent events through the date that these financial statements were issued, and none were identified.
| F-12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward- looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are
subject
to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:· | Our results are vulnerable to economic conditions; |
· | Our ability to raise adequate working capital; |
· | Loss of customers or sales weakness; |
· | Inability to achieve sales levels or other operating results; |
· | The unavailability of funds for expansion purposes; |
· | Operational inefficiencies; |
· | Any further outbreaks of Covid-19 may negatively impact our business, results of operations and financial condition and could adversely affect the economies and financial markets worldwide, including closures of certain businesses, travel limitations, and requirements that individuals stay at home or shelter in place. |
· | Increased competitive pressures from existing competitors and new entrants. |
Trends and Uncertainties
Our business is subject to the following trends and uncertainties:
· | Whether our system will be adaptable to other countries besides South Africa |
· | Whether we will develop interest in our software system in other countries we plan to expand into |
· | The level of activity of credit facilities and their need for our software |
| 3 |
Results of Operations: For the 3 months ended November 30, 2025 and November 30, 2024
Revenues
Our revenues for the 3-month period ended November 30, 2025 and 2024 were $184,587 and $150,366, respectively, reflecting an increase in revenues of $34,221, which increased revenues are primarily attributable to an increase in transactional revenue in our South African operations.
Net Loss
We had net losses of $1,032,123and $159,184 for the 3-months ended November 30, 2025 and November 30, 2024, respectively, reflecting an increased net loss of ($872,939), which is primarily attributable to a loss on settlement of debt.
Expenses
We incurred total expenses of $243,433 and $256,788, respectively, for the 3-month period ended November 30, 2025 and 2024, reflecting decreased expenses of ($13,355), which is primarily attributable to a decrease in general and administrative expenses in our South African operations.
Results of Operations: For the 9 months ended November 30, 2025 and November 30, 2024
Revenues
Our revenues for the 9-month period ended November 30, 2025 and 2024 were $543,948 and $575,686, respectively, reflecting decreased revenues of ($31,738), which is primarily attributable to a decrease in transactional revenue in our South African operations for the period.
Net Loss
We had net losses of $1,291,361 and $501,185 for the 9-months ended November 30, 2025 and 2024, respectively, reflecting increased net loss of $790,176, which is primarily attributable to a loss in settlement of debt.
Expenses
We incurred total expenses of $750,882 and $826,599, respectively, for the 9-month period ended November 30, 2025 and 2024, reflecting decreased total expenses of ($75,717), which is primarily attributable to a reduction in general and administrational expenses in our South African operations.
Liquidity and Capital Resources
Working Capital
We had negative working capital of ($199,281) at November 30, 2025 and negative working capital of ($386,487) for our year end at February 28, 2025 , representing a decreased deficit of $187,206.
Cash Flows
Our net cash used in operating activities was ($259,375) and ($741,637) for the 9 months ended November 30, 2025 and 2024, respectively, reflecting decreased net cash used in operating activities of $482,262.
Our net cash used in investing activities was ($842) and $0, respectively, for the 9 months ended November 30, 2025 and 2024 , reflecting increased net cash used in investing activities of ($842).
Our net cash provided by financing activities was $270,000 and $100,000 for the 9-month period ended November 30, 2025 and 2024, respectively, reflecting increased net cash of $170,000 provided by financing activities.
Off-Balance sheet arrangements
None.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable
| 4 |
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management’s Report on Internal Control over Financial Reporting
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of November 30, 2025. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of November 30, 2025, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
As of November 30, 2025, we did not maintain effective controls over our control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive
effect
across the organization, management has determined that these circumstances constitute a material weaknessOur management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all error or 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 are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to 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, have been detected.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We will continue to evaluate the effectiveness of internal controls and procedures on an on-going basis.
| 5 |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no material pending legal proceedings to which our company or our subsidiary is a party or of which any of our properties, or the properties of our subsidiary, is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.
We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or our subsidiary or has a material interest adverse to our company or our subsidiary.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide risk factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures.
None
Item 5. Other information
Item 6. Exhibits.
EXHIBIT INDEX
Exhibit Number | Description | |
31.1 | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 6 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.Date: January
12
, 2026
UPAY, INC. | |
By: | |
/s/ Jacob C. Folscher | |
Jacob C. Folscher | |
Chief Executive Officer / Chief Financial Officer | |
/Chief Accounting Officer) |
| 7 |
FAQ
How did UPAY, Inc. (UPYY) perform financially in the quarter ended November 30, 2025?
For the three months ended November 30, 2025, UPAY generated revenue of
What were UPAY, Inc.’s results for the nine months ended November 30, 2025?
For the nine months ended November 30, 2025, UPAY recorded revenue of
What does UPAY, Inc.’s balance sheet look like as of November 30, 2025?
As of November 30, 2025, UPAY reported total assets of
Does UPAY, Inc. face going-concern risks?
Yes. Management states that as of November 30, 2025 the company does not have sufficient revenues to execute its business plan and intends to fund operations through equity financing arrangements. These conditions, among others, raise substantial doubt about UPAY’s ability to continue as a going concern.
How is UPAY, Inc. funding its operations and what were its cash flows?
For the nine months ended November 30, 2025, UPAY used
What internal control issues did UPAY, Inc. disclose?
UPAY concluded that its disclosure controls and procedures were not effective as of November 30, 2025. Management cited weaknesses in the control environment, including undeveloped and inconsistently communicated accounting policies and the absence of independent board members or an audit committee financial expert.
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