QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
¨ | Smaller reporting company | |||
Emerging Growth Company |
Index | |
Table of Contents | |
| F-1 |
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 | $ | $ | ||||||
| F-2 |
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 | ||||||||||||||||
| F-3 |
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 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| F-4 |
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 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| F-5 |
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 | $ | $ | ||||||
| F-6 |
1. | Nature of Operations and Continuance of Business |
2. | Summary of Significant Accounting Policies |
a) | Basis of Presentation |
b) | Interim Financial Statements |
c) | Use of Estimates |
d) | Going Concern |
| F-7 |
e) | Segment Information |
f) | Recent Accounting Pronouncements |
3. | Property and Equipment, Net |
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 | $ | $ | $ | $ | ||||||||||||
4. | Right-Of-Use Assets, Net |
Cost | Accumulated Amortization | November 30, 2025 Net Carrying Value | February 28, 2025 Net Carrying Value | |||||||||||||
Right-of-use building (operating lease) | $ | $ | $ | $ | ||||||||||||
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 |
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 |
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 |
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 |
Customer | Nine months ended November 30, 2025 | |||
1 | % | |||
2 | % | |||
Customer | Nine months ended November 30, 2024 | |||
1 | % | |||
2 | % | |||
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 |
| F-11 |
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 |
11. | Deposit |
12. | Subsequent Event |
| F-12 |
· | 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. |
· | 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 |
| 4 |
| 5 |
| 6 |
UPAY, INC. | |
By: | |
/s/ Jacob C. Folscher | |
Jacob C. Folscher | |
Chief Executive Officer / Chief Financial Officer | |
/Chief Accounting Officer) |
| 7 |