UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2026
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from March 1, 2026 to May 31, 2026
Commission File Number 333-212447
UPAY, INC.
(Exact name of registrant 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
,
12th Floor
Dallas
,
Texas
75234
(Address of principal executive offices) (Zip Code)
(
972
)
888-6052
(Registrant’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 every Interactive Data File required to be submitted 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 such files). Yes
x
No
¨
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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
x
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
x
The registrant had 17,665,211 shares of common stock outstanding as of July
14
, 2026.
TABLE OF CONTENT
Page
PART I — Financial Information
Item 1.
Consolidated Financial Statements (unaudited)
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Item 4.
Controls and Procedures

PART II — Other Information
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
Signatures
2
PART I — FINANCIAL INFORMATION
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-5
Notes to the Consolidated Financial Statements (unaudited)
F-6
F-1
UPAY, INC.
Consolidated Balance Sheets
(Expressed in U.S. dollars)
May 31,
2026
February 28,
2026
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents
$
91,692
$
96,279
Accounts receivable, net of allowance
54,338
44,553
Prepaid expenses and other current assets
12,227
12,779
Total Current Assets
158,257
153,611
Property and Equipment, Net (Note 3)
12,311
13,048
Right-of-use Assets, Net (Note 4)
41,626
48,166
Deposit (Note 11)
12,296
12,584
Total Assets
$
224,490
$
227,409
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities
$
125,793
$
138,317
Due to related parties (Note 5)
71,709
61,484
Current portion of lease liabilities (Note 7)
23,752
23,383
Current portion of notes payable (Note 6)
1,642
1,642
Current portion of notes payable in default (Note 6)
50,500
50,500
Current portion of notes payable – Related parties (Note 5)
210,000
145,000
Current portion of notes payable – Related parties in default (Note 5)
55,000
–
Total Current Liabilities
$
538,396
$
420,326
Non-Current Liabilities
Lease liabilities (Note 7)
17,874
24,783
Notes payable (Note 6)
76,158
76,158
Notes payable – Related parties (Note 5)
175,000
220,000
Total Liabilities
$
807,428
$
741,267
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;
17,615,211 and 17,595,211 shares issued and outstanding, respectively
17,615
17,595
Common Stock Issuable
274,750
240,500
Additional Paid-in Capital
2,878,417
2,865,037
Accumulated Deficit
(3,691,252
)
(3,569,874
)
Accumulated Other Comprehensive Loss
(62,468
)
(67,116
)
Total Stockholders’ Deficit
(582,938
)
(513,858
)
Total Liabilities and Stockholders’ Deficit
$
224,490
$
227,409
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
Ended
Ended
May 31,
May 31,
2026
2025
Revenue
$
226,347
$
170,414
Cost of revenue
(59,405
)
(42,584
)
Gross Profit
166,942
127,830
Expenses
Depreciation (Note 3)
1,621
1,718
General and administrative
268,190
256,714
Total Expenses
269,811
258,432
Loss Before Other Income (Expenses) and Income Taxes
(102,869
)
(130,602
)
Other Income (Expenses)
Interest income
306
258
Interest expense
(12,877
)
(11,642
)
Loss Before Income Taxes
(115,440
)
(141,986
)
Provision for income taxes
–
–
Net Loss
(115,440
)
(141,986
)
Other Comprehensive Income
Foreign currency translation adjustments
4,648
16
Comprehensive Loss
$
(110,792
)
$
(141,970
)
Net Loss Per Share – Basic and Diluted
$
(0.01
)
$
(0.01
)
Weighted-average Common Shares Outstanding – Basic and Diluted
17,287,867
16,795,211
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 28, 2025
16,595,211
$
16,595
$
1,646,037
$
103,500
$
(2,163,251
)
$
(71,737
)
$
(468,856
)
Common stock issuable for services
–
–
–
34,250
–
–
34,250
Net loss
–
–
–
–
(141,986
)
–
(141,986
)
Foreign currency translation adjustments
–
–
–
–
–
16
16
Balance – May 31, 2025
16,595,211
$
16,595
$
1,646,037
$
137,750
$
(2,305,237
)
$
(71,721
)
$
(576,576
)
Balance – February 28, 2026
17,595,211
$
17,595
$
2,865,037
$
240,500
$
(3,569,874
)
$
(67,116
)
$
(513,858
)
Common stock issued for services
20,000
20
13,380
–
–
–
13,400
Common stock issuable for services
–
–
–
34,250
–
–
34,250
Net loss
–
–
–
–
(115,440
)
–
(115,440
)
Foreign currency translation adjustments
–
–
–
–
(5,938
)
4,648
(1,290
)
Balance – May 31, 2026
17,615,211
$
17,615
$
2,878,417
$
274,750
$
(3,691,252
)
$
(62,468
)
$
(582,938
)
The accompanying notes are an integral part of these consolidated financial statements.
F-4
UPAY, Inc.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
(unaudited)
Three Months
Ended
May 31,
2026
Three Months
Ended
May 31,
2025
Cash Flows from Operating Activities
Net Loss
$
(115,440
)
$
(141,986
)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued or issuable for services
47,650
34,250
Depreciation
1,621
1,718
Provision for bad debt
217
2,954
Changes in operating assets and liabilities:
Accounts receivable
(10,074
)
(3,280
)
Prepaid expenses and other current assets
500
18,486
Accounts payable and accrued liabilities
(8,937
)
(52,089
)
Accounts payable – related party
10,241
9,271
Net Cash Used in Operating Activities
(74,222
)
(130,676
)
Cash Flows from Investing Activities
Purchase of property and equipment
(1,189
)
–
Net Cash Used in Investing Activities
(1,189
)
–
Cash Flows from Financing Activities
Proceeds from notes payable to related party
75,000
120,000
Net Cash Provided by Financing Activities
75,000
120,000
Effect of Exchange Rate Changes on Cash
(4,176
)
(1,065
)
Change in Cash and Cash Equivalents
(4,587
)
(11,741
)
Cash and Cash Equivalents - Beginning of Period
96,279
55,362
Cash and Cash Equivalents - End of Period
91,692
43,621
Supplemental Disclosures of Cash Flow Information:
Interest paid
$
12,877
$
11,642
Income taxes paid
$
–
$
–
Non-cash Investing and Financing Activities:
Common stock issued for marketing services
$
13,400
$
–
The accompanying notes are an integral part of these consolidated financial statements.
F-5
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 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
49
% 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.
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, 2026, 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 May 31, 2026, 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.
F-6
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 May 31, 2026, and February 28, 2026. 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 the 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
May 31,
2026
Net Carrying Value
February 28,
2026
Net Carrying Value
Computer equipment
$
17,154
$
(15,888
)
$
1,266
$
1,106
Computer software
206,000
(206,000
)
–
–
Furniture and fixtures
13,229
(10,507
)
2,722
2,256
Motor vehicle
22,132
(13,882
)
8,250
9,577
Office equipment
4,865
(4,792
)
73
109
Total
$
263,380
$
(251,069
)
$
12,311
$
13,048
During the three months ended May 31, 2026, the Company recorded depreciation expense of $1,621 (2025 – $1,718).
4.
Right-Of-Use Assets, Net
Right-of-use assets, net, consist of the following:
Cost
Accumulated
Amortization
May 31,
2026
Net Carrying
Value
February 28,
2026
Net Carrying
Value
Right-of-use building (operating lease)
$
61,038
$
(19,412
)
$
41,626
$
48,166
Total
$
61,038
$
(19,412
)
$
41,626
$
48,166
During the three months ended May 31, 2026, the Company recorded rent expense of $6,550 (2025 - $5,676) related to Company’s right-of-use building.
5.
Due to Related
Par
ties
a)
On March 24, 2021, the Company entered into a promissory note with the Company’s Chief Executive Officer (“CEO”) for $10,000, which is unsecured, bears interest of 10% per annum and matured on March 24, 2022. On May 28, 2026, the maturity date was extended to
September 17, 2027
. As at May 31, 2026, the outstanding principal is $10,000 (February 28, 2026 – $10,000) and the Company has recognized accrued interest of $5,189 (February 28, 2026 – $4,937), which is included in due to related parties.
b)
On September 7, 2021, the Company entered into a promissory note with the Company’s CEO for $10,000, which is unsecured, bears interest of 10% per annum and matured on March 7, 2022. On May 28, 2026, the maturity date was extended to September 17, 2027. As at May 31, 2026, the outstanding principal is $10,000 (February 28, 2026 – $10,000) and the Company has recognized accrued interest of $4,732 (February 28, 2026 – $4,479) which is included in due to related parties.
c)
On February 11, 2022, the Company entered into a promissory note with the Company’s CEO for $20,000, which is unsecured, bears interest of 10% per annum and matured on February 11, 2023. On May 28, 2026, the maturity date was extended to September 17, 2027. As at May 31, 2026, the outstanding principal is $20,000 (February 28, 2026 – $20,000) and the Company has recognized accrued interest of $8,603 (February 28, 2026 – $8,099), which is included in due to related parties.
F-7
d)
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 May 31, 2026, the outstanding principal is $15,000 (February 28, 2026 – $15,000) and the Company has recognized accrued interest of $7,697 (February 28, 2026 – $7,319), which is included in due to related parties. As at May 31, 2026, the promissory note is in default.
e)
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 May 31, 2026, the outstanding principal is $25,000 (February 28, 2026 – $25,000) and the Company has recognized accrued interest of $10,206 (February 28, 2026 – $9,575), which is included in due to related parties. As at May 31, 2026, the promissory note is in default.
f)
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 May 31, 2026, the outstanding principal is $15,000 (February 28, 2026 – $15,000) and the Company has recognized accrued interest of $5,589 (February 28, 2026 – $5,211), which is included in due to related parties. As at May 31, 2026, the promissory note is in default.
g)
On January 31, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $50,000, which is unsecured, bears interest of 10% per annum and matures on January 31, 2027. As at May 31, 2026, the outstanding principal is $50,000 (February 28, 2026 - $50,000) and the Company has recognized accrued interest of $6,643 (February 28, 2026 - $5,383), which is included in due to related parties.
h)
On March 3, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $50,000, which is unsecured, bears interest of 10% per annum and matures on March 3, 2027. As at May 31, 2026, the outstanding principal is $50,000 (February 28, 2026 – $50,000) and the Company has recognized accrued interest of $6,219 (February 28, 2026 – $4,959), which is included in due to related parties.
i)
On May 9, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $29,000, which is unsecured, bears interest of 10% per annum and matures on May 9, 2027. As at May 31, 2026, the outstanding principal is $29,000 (February 28, 2026 – $29,000) and the Company has recognized accrued interest of $3,075 (February 28, 2026 – $2,344), which is included in due to related parties.
j)
On May 22, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $41,000, which is unsecured, bears interest of 10% per annum and matures on May 22, 2027. As at May 31, 2026, the outstanding principal is $41,000 (February 28, 2026 – $41,000) and the Company has recognized accrued interest of $4,201 (February 28, 2026 - $3,168), which is included in due to related parties.
k)
On July 23, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $50,000, which is unsecured, bears interest of 10% per annum and matures on July 23, 2027. As at May 31, 2026, the outstanding principal is $50,000 (February 28, 2026 - $50,000) and the Company has recognized accrued interest of $4,274 (February 28, 2026 - $3,014), which is included in due to related parties.
l)
On September 12, 2025, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $50,000, which is unsecured, bears interest of 10% per annum and matures on September 12, 2027. As at May 31, 2026, the outstanding principal is $50,000 (February 28, 2026 - $50,000) and the Company has recognized accrued interest of $3,575 (February 28, 2026 - $2,315), which is included in due to related parties.
m)
On March 17, 2026, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $50,000, which is unsecured, bears interest of 10% per annum and matures on March 17, 2029. As at May 31, 2026, the outstanding principal is $50,000 and the Company has recognized accrued interest of $1,027, which is included in due to related parties.
n)
On May 29, 2026, 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 matures on May 29, 2029. As at May 31, 2026, the outstanding principal is $25,000 and the Company has recognized accrued interest of $14, which is included in due to related parties.
o)
As at May 31, 2026, the Company owes a total of $665 (February 28, 2026 – $681) to officers of the Company for advances, which are unsecured, non-interest bearing and due on demand.
p)
During the three months ended May 31, 2026, the Company incurred salary expenses of $30,027 (R498,185) (2025 – $27,058 (R498,185)) to the CEO of the Company.
F-8
q)
During the three months ended May 31, 2026, the Company incurred directors’ fees of $16,750 (2025 – $16,750) to a Director of the Company pursuant to a Director Agreement (Note 10(a)).
r)
During the three months ended May 31, 2026, the Company incurred directors’ fees of $904 (R15,000) (2025 – $815 (R15,000)) to a Director of the Company.
s)
During the three months ended May 31, 2026, the Company incurred director fees of $17,500 (2025 - $17,500) to the Director and former Chief Operating Officer (“COO”) of the Company pursuant to a Director and Officer Agreement (Note 10(b)).
6.
Notes Payable
a)
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 May 31, 2026, the promissory note is in default and the Company has recognized accrued interest of $15,082 (February 28, 2026 –
$
14,452), which is included in accounts payable and accrued liabilities.
b)
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 Company’s assets, 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 May 31, 2026, the Company has recognized accrued interest of $16,765 (February 28, 2026 – $16,030), which is included in accounts payable and accrued liabilities.
c)
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 May 31, 2026, the promissory note is in default and the Company has recognized accrued interest of $11,751
(
February 28, 2026 –
$11,108), which is
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%. On January 19, 2026, the Company entered into an amendment to the original lease which amended the annual escalation rate to 4%. The base monthly rental rate is $2,078 (R36,225). 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 May 31, 2026:
Years ending February 28:
Building Lease
(Operating Lease)
2027
$
20,223
2028
25,571
Net minimum lease payments
45,794
Less: amount representing interest payments
(4,168
)
Present value of net minimum lease payments
41,626
Less: current portion
(23,752
)
Long-term portion
$
17,874
8.
Common Stock
Share transactions for the three months ended May 31, 2026:
During the three months ended May 31, 2026, the Company accrued 50,000 shares of common stock issuable with a fair value of $34,250 pursuant to Director Agreements (Note 10(a) and Note 10(b)).
During the three months ended May 31, 2026, the Company issued 20,000 shares of common stock with a fair value of $13,400 for marketing services.
Share transactions for the three months ended May 31, 2025:
During
the three months ended May 31, 2025,
the Company accrued 50,000 shares of common stock issuable with a fair value of $34,250 pursuant to Director Agreements (Note 10(a) and Note 10(b)).
F-9
9.
Concentrations
The Company’s revenues were concentrated among four customers for the three months ended May 31, 2026 and four customers for the three months ended May 31, 2025.
Customer
Three months
Ended
May 31, 2026
1
20
%
2
10
%
3
8
%
4
8
%
Customer
Three months
Ended
May 31, 2025
1
25
%
2
9
%
3
8
%
4
7
%
The Company’s receivables were concentrated among two customers as at May 31, 2026, and two customers as at February 28, 2026:
Customer
May 31,
2026
1
26
%
2
11
%
Customer
February 28
,
2026
1
26
%
2
13
%
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 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. On February 26, 2025, the Company issued the 50,000 shares of common stock issuable.
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 $67,000, representing a fair value of 100,000 shares of common stock issuable for services rendered for the period from March 2025 to February 2026. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $16,750, representing a fair value of 25,000 shares of common stock issuable for services rendered for the period from March 2026 to May 2026.
F-10
As at
May 31, 2026
, a total of 175,000 shares (February 28, 2026 – 150,000 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 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. The Company did not renew the Officer Agreement and on February 26, 2025, issued 250,000 shares of common stock with a fair value of $250,000.
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 $70,000 representing a fair value of 100,000 shares of common stock issuable for services rendered for the period from March 2025 to February 2026. Pursuant to the terms of the extended agreement, the Company recognized board member compensation of $17,500 representing a fair value of 25,000 shares of common stock issuable for services rendered for the period from March 2026 to May 2026.
As at May 31, 2026, a total of 225,000 (February 28, 2026 – 200,000 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 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 May 31, 2026, the balance of the deposit was $12,296 (R200,000) (February 28, 2026 – $12,584 (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
except for the following:
Subsequent to the three months ended May 31, 2026, the Company issued 50,000 shares of common stock for services pursuant to a Director Agreement.
F-11
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 any projections of earnings, revenue or other financial items; statements of the plans, strategies and objectives of management for future operations; statements concerning proposed new services or developments; statements regarding future economic conditions or performance; statements of belief; and 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 as required by applicable securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. 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; and
·
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 countries other than South Africa;
·
Whether we will develop interest in our software system in other countries into which we plan to expand; and
·
The level of activity of credit facilities and their need for our software.
Results of Operations — For the three months ended May 31, 2026 and May 31, 2025
Revenues
Our revenues for the three-month periods ended May 31, 2026 and 2025 were $226,347 and $170,414, respectively, reflecting an increase in revenues of $55,933, which increase is primarily attributable to increased revenue generated from the Company’s software development, and an increase in transactional revenue, from new and existing clients in the credit industry in South Africa.
Net Loss
We had net losses of $115,440 and $141,986 for the three months ended May 31, 2026 and 2025, respectively, reflecting a decrease net loss of $26,546, which is primarily attributable to increased revenues and gross profit during the period, partially offset by higher general and administrative expenses.
Expenses
We incurred total expenses of $269,811 and $258,432, respectively, for the three months ended May 31, 2026 and 2025, reflecting an increase in expenses of $11,379, which is primarily attributable to an increase in general and administrative expenses during the period.
Liquidity and Capital Resources
Working Capital
We had negative working capital of $380,139 at May 31, 2026 and negative working capital of $266,715 at our fiscal year end of February 28, 2026, representing a decrease in working capital of $113,424.
3
Cash Flows
Our net cash used in operating activities was $74,222 and $130,676 for the three months ended May 31, 2026 and 2025, respectively.
Our net cash used in investing activities was $1,189 and $0, respectively, for the three months ended May 31, 2026 and 2025.
Our net cash provided by financing activities was $75,000 and $120,000 for the three months ended May 31, 2026 and 2025, respectively.
Off-Balance Sheet Arrangements
None.
4
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
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 May 31, 2026. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of May 31, 2026, 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 May 31, 2026, 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, which 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 does 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. 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 the quarter ended May 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
5
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently a party to any material legal proceedings, and no such proceedings are known to be contemplated
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three months ended May 31, 2026, the Company issued 20,000 shares of common stock for marketing services.
During the three months ended May 31, 2026, the Company also accrued 50,000 shares of common stock issuable pursuant to Director Agreements. Although the shares were issued subsequent to May 31, 2026, the shares were earned and accrued during the quarter ended May 31, 2026 pursuant to the applicable Director Agreements.
The securities described above were issued, accrued, or subsequently issued in consideration for services rendered, in transactions not involving a public offering, and were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. No underwriters were involved in the foregoing transactions, and the Company did not receive any cash proceeds from the issuance, accrual, or subsequent issuance of such securities.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
Exhibit No.
Description
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (Section 302).
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (Section 302).
32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906).
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
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.
UPAY, INC.
Date: July 14, 2026
By:
/s/ Jacob Casper Folscher
Jacob Casper Folscher
Chief Executive Officer
(Principal Executive Officer)
Date: July 14, 2026
By:
/s/ Jacob Casper Folscher]
Chief Financial Officer
(Principal Financial Officer)
7