UPAY

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, 2024

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

UPAY, Inc.

(Exact name of small business issuer as specified in its charter)

NEVADA		37-1793622
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3010 LBJ Freeway, 12

Floor

Dallas, Texas 75234

(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 

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 

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	
Non-accelerated filer		Smaller reporting company	x
Emerging Growth Company	

If an emerging growth company, indicate by check mark if the registrant has elected not 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 

16,228,544

 common shares outstanding as of January 13
, 2025

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

UPAY, Inc.

Consolidated 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.

Consolidated Balance Sheets

(Expressed in U.S. dollars)

	November 30, 2024			February 29, 2024
	(unaudited)

ASSETS

Current Assets

Cash and cash equivalents	$	31,935		$	642,846
Accounts receivable, net of allowance		35,075			73,395
Prepaid expenses and other current assets		68,904			2,884

Total Current Assets		135,914			719,125

Property and Equipment, Net (Note 3)		18,191			22,638
Right-of-use Assets, Net (Note 4)		3,611			18,169
Deposit (Note 11)		11,085			10,408

Total Assets	$	168,801		$	770,340


LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable and accrued liabilities	$	69,196		$	572,904
Due to related parties (Note 5)		74,259			54,774
Current portion of lease liabilities (Note 7)		3,611			18,169
Current portion of notes payable (Note 6)		52,135			52,143
Notes payable – Related parties (Note 5)		251,000			251,000

Total Current Liabilities		450,201			948,990

Non-Current Liabilities

Notes Payable (Note 6)		76,165			76,157

Total Liabilities		526,366			1,025,147

Stockholders’ Deficit

Preferred Stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding		–			–
Common Stock, $0.001 par value, 100,000,000 shares authorized; 16,228,544 and 15,708,544 shares issued and outstanding, respectively		16,228			15,708
Common Stock Issuable		538,327			313,331
Additional Paid-in Capital		1,283,070			1,116,590
Accumulated Deficit		(2,124,374	)		(1,623,189	)
Accumulated Other Comprehensive Loss		(70,816	)		(77,247	)

Total Stockholders’ Deficit		(357,565	)		(254,807	)

Total Liabilities and Stockholders’ Deficit	$	168,801		$	770,340

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,
	2024			2023			2024			2023

Revenue	$	150,366		$	364,360		$	575,686		$	1,060,978
Cost of revenue		(44,399	)		(168,111	)		(228,110	)		(485,582	)

Gross Profit		105,967			196,249			347,576			575,396

Expenses

Amortization of right-of-use assets (Note 4)		–			–			–			888
Depreciation (Note 3)		1,961			2,528			5,816			15,718
General and administrative		254,827			491,141			820,783			1,050,402

Total Expenses		256,788			493,669			826,599			1,067,008

Loss Before Other Income (Expenses) and Income Taxes		(150,821	)		(297,420	)		(479,023	)		(491,612	)

Other Income (Expenses)

Interest income		287			3,048			3,058			6,054
Interest expense		(8,650	)		(8,327	)		(25,220	)		(25,031	)
Gain on settlement of lease (Note 7)		–			–			–			1,052
Gain on disposal on equipment		–			622			–			622

Loss Before Income Taxes		(159,184	)		(302,077	)		(501,185	)		(508,915	)

Provision for income taxes		–			–			–			–

Net Loss		(159,184	)		(302,077	)		(501,185	)		(508,915	)

Other Comprehensive Income (Loss)

Foreign currency translation adjustments		(7,049	)		(7,410	)		6,431			(11,186	)

Comprehensive Loss	$	(166,233	)	$	(309,487	)	$	(494,754	)	$	(520,101	)

Net Loss Per Share – Basic and Diluted	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.03	)

Weighted-average Common Shares Outstanding – Basic and Diluted		16,740,856			16,242,600			16,504,190			17,123,815

The accompanying notes are an integral part of these unaudited 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 28, 2023		17,190,211		$	17,190		$	535,275		$	13,334		$	(886,998	)	$	(60,828	)	$	(382,027	)
Stock subscriptions received		–			–			–			10,000			–			–			10,000
Common stock issuable for services		–			–			–			20,000			–			–			20,000
Net loss		–			–			–			–			(32,220	)		–			(32,220	)
Foreign currency translation adjustments		–			–			–			–			–			(8,552	)		(8,552	)
Balance – May 31, 2023		17,190,211		$	17,190		$	535,275		$	43,334		$	(919,218	)	$	(69,380	)	$	(392,799	)
Common stock issued for cash		220,000			220			209,780			(10,000	)		–			–			200,000
Common stock issued for services		133,333			133			123,200			(123,333	)		–			–			–
Common stock issuable for services		–			–			–			186,666			–			–			186,666
Net loss		–			–			–			–			(174,618	)		–			(174,618	)
Foreign currency translation adjustments		–			–			–			–			–			4,776			4,776
Balance – August 31, 2023		17,543,544		$	17,543		$	868,255		$	96,667		$	(1,093,836	)	$	(64,604	)	$	(175,975	)
Cancellation of common stock		(2,035,000	)		(2,035	)		(21,465	)		–			–			–			(23,500	)
Forgiveness of amount owing for repurchase of common stock		–			–			70,000			–			–			–			70,000
Common stock issuable for services		–			–			–			108,332			–			–			108,332
Common stock subscriptions received		–			–			–			200,000			–			–			200,000
Net loss		–			–			–			–			(302,077	)		–			(302,077	)
Foreign currency translation adjustments		–			–			–			–			–			(7,410	)		(7,410	)
Balance – November 30, 2023		15,508,544			15,508			916,790			404,999			(1,395,913	)		(72,014	)		(130,630	)

The accompanying notes are an integral part of these unaudited 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, 2024		15,708,544	$	15,708	$	1,116,590		$	313,331	$	(1,623,189	)	$	(77,247	)	$	(254,807	)
Common stock issuable for services		–		–		–			83,332		–			–			83,332
Net loss		–		–		–			–		(150,677	)		–			(150,677	)
Foreign currency translation adjustments		–		–		–			–		–			3,027			3,027
Balance – May 31, 2024		15,708,544	$	15,708	$	1,116,590		$	396,663	$	(1,773,866	)	$	(74,220	)	$	(319,125	)
Common stock issuable for services		–		–		–			83,332		–			–			83,332
Common stock issued for cash		200,000		200		99,800			–		–			–			100,000
Common stock issued for Huntpal LLC acquisition		220,000		220		(220	)		–		–			–			–
Net loss		–		–		–			–		(191,324	)		–			(191,324	)
Foreign currency translation adjustments		–		–		–			–		–			10,453			10,453
Balance – August 31, 2024		16,128,544	$	16,128	$	1,216,170		$	479,995	$	(1,965,190	)	$	(63,767	)	$	(316,664	)
Stock issued for services		100,000		100		66,900			–		–			–			67,000
Common stock issuable for services		–		–		–			58,332		–			–			58,332
Net loss		–		–		–			–		(159,184	)		–			(159,184	)
Foreign currency translation adjustments		–		–		–			–		–			(7,049	)		(7,049	)
Balance – November 30, 2024		16,228,544	$	16,228	$	1,283,070		$	538,327	$	(2,124,374	)	$	(70,816	)	$	(357,565	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-5

UPAY, Inc.

Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

(unaudited)

	Nine Months Ended November 30, 2024			Nine Months Ended November 30, 2023

Cash Flows from Operating Activities

Net Loss	$	(501,185	)	$	(508,915	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of right-of-use assets		–			888
Common stock issued or issuable for services		236,163			314,998
Depreciation		5,816			15,718
Gain on disposal of equipment		–			(622	)
Gain on settlement of lease		–			(1,052	)
Interest expense on lease liability		–			66
Stock-based compensation		–			200,000

Changes in operating assets and liabilities:
Accounts receivable		42,729			(7,567	)
Prepaid expenses and other current assets		(10,000	)		(3,320	)
Deposits		–			32,162
Accounts payable and accrued liabilities		(534,638	)		(20,330	)
Accounts payable – related party		19,478			18,937

Net Cash (Used in) Provided by Operating Activities		(741,637	)		40,963

Cash Flows from Investing Activities

Purchase of property and equipment		–			(24,144	)
Proceeds received on disposal of property and equipment		–			828

Net Cash Used in Investing Activities		–			(23,316	)

Cash Flows from Financing Activities
Proceeds from common stock issued for cash		100,000			210,000
Proceeds from notes payable to related party		–			4,000
Repayment of notes payable to related party		–			(4,000	)
Repurchase and cancellation of common stock		–			(23,500	)
Repayment of lease liabilities		–			(1,014	)

Net Cash Provided by Financing Activities		100,000			185,486

Effect of Exchange Rate Changes on Cash		30,726			(20,139	)

Change in Cash and Cash Equivalents		(610,911	)		182,994

Cash and Cash Equivalents - Beginning of Period		642,846			662,991

Cash and Cash Equivalents - End of Period	$	31,935		$	845,985

Supplemental Disclosures of Cash Flow Information:

Interest paid	$	25,220		$	25,031
Income taxes paid	$	–		$	–

Non-cash Investing and Financing Activities:

Forgiveness of amount owing for repurchase of common stock	$	–		$	70,000
Common stock issued for services	$	67,000		$	–
Common stock issued for acquisition of Huntpal LLC	$	147,400		$	–

The accompanying notes are an integral part of these unaudited 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. By a Share Exchange Agreement dated November 4, 2015, 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”), which was determined to be a transaction between entities under common control. On May 30, 2023, the Company incorporated a wholly-owned subsidiary, taking a 51% controlling interest in Huntpal LLC (“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”) 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 acquisition.

Rent Pay operates principally in South Africa and engages in software development and licensing and provides services to the credit provider industry.

Summary of Significant Accounting Policies

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.

Interim Financial Statements

The accompanying unaudited interim 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 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 29, 2024, have been omitted.

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.

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, 2024, the Company does not have revenues sufficient 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

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.

F-7

Property and Equipment, Net

Property and equipment, net, consists of the following:

	Cost		Accumulated Depreciation			November 30, 2024 Net Carrying Value		February 29, 2024 Net Carrying Value

Computer equipment	$	14,427	$	(11,910	)	$	2,517	$	4,186
Computer software		206,000		(205,915	)		85		325
Furniture and fixtures		10,228		(8,485	)		1,743		2,074
Motor vehicle		25,194		(11,770	)		13,424		15,414
Office equipment		4,396		(3,974	)		422		639

Total	$	260,245	$	(242,054	)	$	18,191	$	22,638

During the nine months ended November 30, 2024, the Company recorded depreciation expense of $5,816 (2023

–

$15,718). During the nine months ended November 30, 2024, the Company acquired $nil (2023

–

$2,317) of computer equipment and $nil (2023

–

$21,827) of motor vehicles.

Right-Of-Use Assets, Net

Right-of-use assets, net, consist of the following:

	Cost		Accumulated Amortization			November 30, 2024 Net Carrying Value		February 29, 2024 Net Carrying Value

Right-of-use building (operating lease)	$	63,443	$	(59,832	)	$	3,611	$	18,169

Total	$	63,443	$	(59,832	)	$	3,611	$	18,169

During the nine months ended November 30, 2024, the Company recorded rent expense of $16,253 (2023 - $14,955) related to Company’s right-of-use building and amortization expense of $nil (2023 - $888) related to the Company’s right-of-use vehicles. During the year ended February 29, 2024, the Company settled a lease obligation on a right-of-use vehicle with a carrying value of $1,894 and a remaining lease liability of $2,936, which resulted in a gain on settlement of lease of $1,042.

Due to Related Parties

On March 24, 2021, the Company entered into a promissory note with the Chief Executive Officer (“CEO”) of the Company for $10,000, which is unsecured, bears interest of 10% per annum and matured on March 24, 2022. As at November 30, 2024, the outstanding principal is $10,000 (February 29, 2024 – $

10,000

) and the Company has recognized accrued interest of $3,690 (February 29, 2024 – $

2,963

), which is included in due to related parties.

On September 7, 2021, the Company entered into a promissory note with the CEO of the Company for $10,000, which is unsecured, bears interest of 10% per annum and matured on March 7, 2022. As at November 30, 2024, the outstanding principal is $10,000 (February 29, 2024 – $

10,000

) and the Company has recognized accrued interest of $3,233 (February 29, 2024 – $2,479) which is included in due to related parties.

On February 11, 2022, the Company entered into a promissory note with the CEO of the Company for $20,000, which is unsecured, bears interest of 10% per annum and matured on February 11, 2023. As at November 30, 2024, the outstanding principal is $20,000 (February 29, 2024 – $

20,000

) and the Company has recognized accrued interest of $5,606 (February 29, 2024 – $

4,099

), which is included in due to related parties.

On April 14, 2021, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $26,000, which is unsecured, bears interest of 10% per annum and matured on October 13, 2023. As at November 30, 2024, the outstanding principal is $26,000 (February 29, 2024 – $

26,000

) and the Company has recognized accrued interest of $9,445 (February 29, 2024 – $

7,487

), which is included in due to related parties.

On February 11, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $130,000, which is unsecured, bears interest of 10% per annum and matures on February 11, 2023. As at November 30, 2024, the outstanding principal is $130,000 (February 29, 2024 – $

130,000

) and the Company has recognized accrued interest of $36,436 (February 29, 2024 – $26,641), which is included in due to related

parties

F-8

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 $

15,000

, which is unsecured, bears interest of 10% per annum and matured on October 13, 2023. As at November 30, 2024, the outstanding principal is $

15,000

(February 29, 2024 – $

15,000

) and the Company has recognized accrued interest of $

5,449

(February 29, 2024 – $

4,319

), which is included in due to related parties.

On May 2, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $25,000, which is unsecured, bears interest of 10% per annum and matured on March 2, 2023. As at November 30, 2024, the outstanding principal is $

25,000

(February 29, 2024 – $25,000) and the Company has recognized accrued interest of $6,459 (February 29, 2024 – $4,575), which is included in due to related parties.

On September 9, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $15,000, which is unsecured, bears interest of 10% per annum and matured on September 9, 2023. As at November 30, 2024, the outstanding principal is $15,000 (February 29, 2024 – $15,000) and the Company has recognized accrued interest of $3,341 (February 29, 2024 – $2,211), which is included in due to related parties.

As at November 30, 2024, the Company owes a total of $600 (February 29, 2024 – $nil) to officers of the Company for advances, which are unsecured, non-interest bearing and due on demand.

During the nine months ended November 30, 2024, the Company incurred salary expenses of $81,332 (R1,479,774) (2023 – $83,522 (R1,558,145)) to the CEO of the Company.

During the nine months ended November 30, 2024, the Company incurred directors’ fees of $50,000 (2023 – $

65,000

) to a Director of the Company pursuant to a Director Agreement (Note 10(b)).

During the nine months ended November 30, 2024, the Company incurred directors’ fees of $3,297 (R

60,000

) (2023 – $nil) to a Director of the Company.

During the nine months ended November 30, 2024, 2024, the Company incurred management fees of $174,996 (2023 - $

174,998

) and director fees of $nil (2023 - $75,000) to the Chief Operating Officer (“COO”) and Director of the Company pursuant to a Director and Officer Agreement (Note 10(c)).

Notes Payable

On May 20, 2020, the Company entered into a promissory note with a third-party lender for $25,000, which is unsecured, bears interest of 10% per annum and matured on May 20, 2023. As at

November 30, 2024

, the Company has recognized accrued interest of $11,336 (

February 29, 2024

–

9,452

), which is included in accounts payable and accrued liabilities.

On May 27, 2020, the Company entered into a promissory note with the U.S. Small Business Administration for $77,800, which is secured by the assets of the Company, bears interest of 3.75% per annum and matures on May 27, 2050. Instalment payments, including principal and interest, of $380 per month will begin 12 months from the date of the promissory note. As at

November 30, 2024

, the Company has recognized accrued interest of $12,393 (

February 29, 2024

– $

10,195

), which is included in accounts payable and accrued liabilities.

On October 22, 2021, the Company entered into a promissory note with a third-party lender for $25,500, which is unsecured, bears interest of 10% per annum and matured on October 13, 2023. As at

November 30, 2024

, the Company has recognized accrued interest of $7,929

(

February 29, 2024

–

6,008

), which is

included in accounts payable and accrued liabilities.

Lease Liabilities

The Company commenced the leasing of a motor vehicle on October 10, 2018, for a term of five years. The monthly minimum lease payments were $519 (R9,456). The motor vehicle lease was classified as a finance lease. The interest rate underlying the obligation in the lease was 11.25% per annum. During the nine months ended November 30, 2024, the Company paid a total of $nil (2023 - $

1,080

) in principal and interest payments on the motor vehicle lease.

On May 10, 2023, the Company settled the motor vehicle finance leases for a settlement fee of $2,530 (R

47,204

) resulting in a gain on settlement of $1,052 (R

19,480

). Upon the payment of the settlement fee, the vehicle title was transferred immediately to the Company and has been allocated to the Company’s property and equipment to be depreciated over the remainder of its useful life.

On February 1, 2021, the Company entered a two-year lease with a renewal option for office space in South Africa. The term of the renewal agreement is for an additional two years and commenced on February 1, 2023. Rental payments are due at the beginning of each month and increase at an annual rate of 7%. The base monthly rental rate is $1,209 (R

22,000

) for the first year, $1,294 (R

23,540

) in the second year, $1,384 (R

25,188

) in the third year, and $1,481 (R26,951) in the final year of the lease. On January 26, 2023, the Company executed the renewal option for two additional years of its lease, commencing on February 1, 2023. Rental payments are due at the beginning of each month. The base monthly rental rate is $1,704 (R

31,000

) for the first year and $1,806 (R

32,860

) in the second year. The office space lease was classified as an operating lease. The interest rate underlying the obligation in the lease was 7% per annum.

F-9

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, 2024:

Years ending February 28:	Building Lease (Operating Lease)

2025	$	3,643

Net minimum lease payments		3,643
Less: amount representing interest payments		(32	)

Present value of net minimum lease payments		3,611
Less: current portion		(3,611	)

Long-term portion	$	–

Common Stock

Share transactions for the nine months ended November 30, 2024:

On June 13, 2024, the Company issued 220,000 shares of common stock with a fair value of $147,400 to the acquire the remaining 49% non-controlling interest in Huntpal LLC

. At the date of acquisition, the carrying value of the non-controlling interest was $nil, resulting in a loss of $147,180 which was recognized against additional paid-in capital.

On July 22, 2024, the Company issued 200,000 shares of common stock for proceeds of $100,000.

On September 6, 2024, the Company issued 100,000 shares of common stock with a fair value of $67,000 for legal services, which vest on September 6, 2025. The fair value was recorded of the shares of common stock will be amortized over the 12-month vesting period. The issuance is also subject to a

5-year

service condition, for which the shares of common stock will be clawed back on a pro-rated basis for any portion of the service term not provided. During the nine months ended November 30, 2024, the Company recognized legal fees of $11,167 related to this issuance. As at November 30, 2024, the Company has recognized $55,833 in prepaid expenses and other current assets.

During the nine months ended November 30, 2024,

the Company accrued $50,000 of common stock issuable for 50,000 common stock pursuant to a Director Agreement (Note 10(b)) and $174,996 of common stock issuable for 174,996 shares of common stock pursuant to an Officer Agreement (Note 10(c)).

Share transactions for the nine months November 30,2023:

On July 17, 2023, the Company issued 200,000 shares of common stock with a fair value of $ 200,000 to the COO of the Company for proceeds of $ 100,000, resulting in the recognition of stock-based compensation of $ 100,000. The Company also issued a total of 133,333 shares of common stock for services with a fair value of $123,333, pursuant to a Director Agreement and Officer Agreement.

On July 17, 2023, the Company issued 20,000 shares of common stock to an arms length party for proceeds of $10,000.

On September 19, 2023, the Company repurchased 2,035,000 shares of common stock from the former CEO of the Company for $23,500, pursuant to the amended Share Purchase and Separation Agreement described in Note 10. In addition, the former CEO of the Company agreed to forgive $70,000 of amounts owing for the repurchase of common stock under the original Share Purchase and Separate Agreement, which has been recognized in additional paid-in capital.

During the nine months ended November 30, 2023, the Company accrued $100,000 of common stock issuable for 100,000 shares of common stock pursuant to Director Agreements

(Note 10(b)).

and $174,998 of common stock issuable for 174,998 shares of common stock pursuant to an Officer Agreement

(Note 10(c))

During the nine months ended November 30, 2023, the Company received $100,000 of subscriptions from a company controlled by a Director of the Company pursuant to the issuance of 200,000 shares of common stock with a fair value of $200,000, resulting in the recognition of stock-based compensation of $100,000. At November30, 2023, the shares have not been issued and the fair value of $200,000 is included in common stock issuable.

F-10

Concentrations

The Company’s revenues were concentrated among two customers for the nine months ended November 30, 2024, and four customers for the nine months ended November 30, 2023.

Customer	Nine Months Ended November 30, 2024

1		30	%
2		11	%

Customer	Nine Months Ended November 30, 2023

1		26	%
2		21	%
3		19	%
4		11	%

The Company’s receivables were concentrated among three customers as at November 30, 2024, and one customer as at February 29, 2024:

Customer	November 30, 2024

1		30	%
2		18	%
3		12	%

Customer	February 29 , 2024

1		65	%

10.

Commitments and Contingencies

On February 3, 2022 (the “Effective Date”), the former CEO of the Company and the Company entered into a Share Purchase and Separation Agreement (the “Agreement”) with the following terms: (a) former CEO sells the Company 7,125,000 shares of common stock of the Company and 3,700,000 shares of common stock of MiWay Finance, Inc. (the “Purchased Shares”), for $240,000, payable with a $150,000 cash payment within 10 days of the Effective Date; and (b) $10,000 per month for 9 consecutive months commencing April 1, 2022; (c) the Company will pay the former CEO current salary through February 2022; (d) former CEO shall retain ownership of 2,000,000 shares of the Company’s common stock subject to a lockup/leak out whereby the former CEO is prohibited from selling any of the 2,000,000 Shares for a period of 18 months and thereafter, shall be permitted to sell no more than 5,000 shares per month. In addition, the former CEO agreed to forgive the $10,000 promissory note and accrued interest entered on September 7, 2021 with the Company, as well as $1,170 in expenses incurred on behalf of the Company. As of February 28, 2022, the Company received 7,025,000 of the 7,125,000 shares of common stock of the Company. The transaction closed on March 2, 2022, and the Company received the remaining 100,000 shares of common stock of the Company and 3,700,000 shares of common stock of Miway Finance Inc.

On September 1, 2023, the Company amended the Agreement with the former CEO of the Company. The amendment stipulates a revised payment structure, with the Company agreeing to pay a total of $170,000 for the Purchased Shares, including a $150,000 cash payment post-closing and two $10,000 monthly payments from April 1, 2022, all of which have been paid at the amendment date. As a result of the amendment, a total of $70,000 was forgiven related to the revised payments for the Purchased Shares resulting in a corresponding reduction in accounts payable and accrued liabilities, and additional paid-in capital. The Company and the former CEO of the Company have mutually released each other from all claims and liabilities related to the former CEO’s employment and termination, excluding those specified in the agreement. Additionally, the Company agreed to repurchase a total of 2,035,000 shares of common stock held by the former CEO of the Company in consideration for $23,500. All other terms of the original agreement remain in effect unless specifically modified by this addendum. On September 19, 2023, the Company repurchased and cancelled the 2,035,000 shares of common stock.

F-11

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 100,000 restricted shares of common stock that will vest bi-monthly over the 12 months. During the year ended February 28, 2023, the Company recognized board member compensation of $40,000, representing the fair value of 50,000 shares of common stock issuable for services rendered for the period from September 2022 to February 2023. During the year ended February 28, 2023, the Company issued 33,333 of the 50,000 shares issuable, leaving a balance of 16,667 shares still issuable at February 28, 2023. During the year ended

February 29, 2024

, the Company recognized board member compensation of $40,000, representing the fair value of 50,000 shares of common stock issuable for services rendered for the period from March 2023 to August 2023. During the year ended

February 29, 2024

, another 50,000 shares were issued.

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. As at

November 30, 2024

, a total of 116,667 shares (February 29, 2024 – 66,667 shares) of common stock remain issuable to the director.

On March 1, 2023, the Company entered into agreements with a Director and COO of the Company for director services and management services for a term of 12 months and 3 years, respectively. In consideration for the services to be provided as a director, the Company agreed to pay the Officer and Director 100,000 restricted shares of common stock that will vest bi-monthly over the 12 months. In consideration for the services to be provided as the COO, the Company also agreed to pay the Officer and Director an additional 700,000 shares of common stock that will vest quarterly with 12 equal payments of 58,333 shares. During the year ended February 29, 2024, the Company recognized management fees of $233,330 and board member compensation of $100,000, representing the fair value of 333,330 shares of common stock issuable for services rendered for the period from March 2023 to February 2024. During the nine months ended November 30, 2024, the Company recognized management fees of $174,996 and board member compensation of $nil, representing the fair value of 174,996 shares of common stock issuable for services rendered for the period from March 2024 to November 30, 2024. As at November 30, 2024, a total of 424,993 (February 29, 2024 – 249,997 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 set up 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, 2024, the balance of the deposit was $11,085 (R200,000) (February 29, 2024

–

$10,408 (R

200,000

). 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

Results of Operations: For the 3 months ended November 30, 2024 and November 30, 2023

Revenues

Our revenues for the 3-month period ended November 30, 2024 and 2023 were $150,366 and $364,360, respectively, reflecting decreased revenues of $213,994. The $213,994 of decreased revenues is primarily attributable to the decrease in transactional revenue in our South African operations.

Net Loss/Profit

We had net losses of $159,184 and $302,077 for the 3-months ended November 30, 2024 and November 30, 2023, respectively, reflecting a decreased net loss of $142,893, which is primarily attributable to the decrease in transactional revenue in our South African operations.

Expenses

We incurred total expenses of $256,788 and $493,669, respectively, for the 3-month period ended November 30, 2024 and 2023, reflecting decreased expenses of $236,881, which is primarily attributable to a decrease in general and administrative expenses.

Results of Operations: For the 9 months ended November 30, 2024 and November 30, 2023

Revenues

Our revenues for the 9-month period ended November 30, 2024 and 2023 were $575,686 and $1,060,978, respectively, reflecting decreased revenues of $485,292, which is primarily attributable to a decrease in transactional revenue in our South African operations.

Net Loss/Profit

We had net losses of $501,185 and $508,915 for the 9-months ended November 30, 2024 and 2023, respectively, reflecting decreased net loss of 7,720, which is primarily attributable to a decrease in general and administrative expenses.

Expenses

We incurred total expenses of $826,599 and $1,067,008, respectively, for the 9-month period ended November 30, 2024 and 2023, reflecting decreased total expenses of $240,409, which is primarily attributable to a decrease in cost of sales.

Liquidity and Capital Resources

We had negative working capital of $314,287 at November 30, 2024 and negative working capital of $229,865 for our year end at February 28, 2024, representing increased negative working capital of $84,422.

Our net cash used in operating activities was negative $741,637 and $40,963 for the 9 months ended November 30, 2024 and 2023, respectively, reflecting decreased net cash used in operating activities of $700,674.

Our net cash used in investing activities were $- and $23,316 , respectively, for the 9 months ended November 30, 2024 and 2023, reflecting decreased net cash used in investing activities of $23,216.

Our net cash provided by financing activities was $100,000 and $185,486 for the 9-month period ended November 30, 2024 and 2023, respectively, reflecting decreased net cash of $85,486 provided by financing activities of $85,486.

Off-Balance sheet arrangements

None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

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, 2024. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of November 30, 2024, 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, 2024, 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 weakness

Our 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.

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.

On July 22, 2024, we issued 200,000 restricted common stock shares of common stock to (an Accredited Investor?) for proceeds of $100,000.

On September 6, 2024, we issued 100,000 restricted common stock shares to (an Accredited Investor?) at a fair value of $67,000 for legal services, which shares vest on September 6, 2025.

During the nine months ended November 30, 2024, we

accrued $50,000 of common stock issuable for 50,000 restricted common stock shares pursuant to a Director Agreement (

See

Note 10(b)) and $174,996 of common stock issuable for 174,996 restricted common stock shares pursuant to an Officer Agreement (

See

Note 10(c)).

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures.

None

Item 5. Other information

None.

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

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 13, 2025

UPAY, INC.



By: /s/ Jacob C. Folscher
Jacob C. Folscher
Chief Executive Officer / Chief Financial Officer
/Chief Accounting Officer)