Upay 10-Q/A for FY2025 Q2
Upay (UPYY)
10-Q/A
2025-01-13
For: 2024-08-31
View Original
Added on
April 06, 2026
About this 10-Q/A
Upay filed this 10-Q/A on January 13, 2025, covering the quarter ended August 31, 2024 (FY2025 Q2).
Headline figures
Quarter ended August 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $168.07K
- down 53.8% from $364.04K a year earlier
- Net loss
- $191.32K
- compared with a net loss of $174.62K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended August 31, 2024
or
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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
(Exact name of small business issuer as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
th
Floor(Address of principal executive offices)
(972 ) 888-6052
(Company’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
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.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging Growth Company |
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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
shares outstanding as of October
17
, 2024.EXPLANATORY NOTE
The purpose of this Amendment to the Registrant’s Quarterly Report on Form 10-Q/A for the quarter ended August 31, 2024 (“Form 10-Q/A”) is to correct paragraph 4 of the Company’s Section 302 certifications to refer to both disclosure controls procedures and internal control over financial reporting (rather than solely disclosure control procedures in the original Form 10-Q for the quarter ended August 31, 2024
)
. UPAY, Inc.
Consolidated Financial Statements
(unaudited)
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Table of Contents
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Index
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| F-1 |
Consolidated Balance Sheets
(Expressed in U.S. dollars)
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August 31, 2024 |
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February 29, 2024 |
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(unaudited) |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowance |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Property and Equipment, Net (Note 3) |
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Right-of-use Assets, Net (Note 4) |
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Deposit (Note 11) |
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Total Assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Due to related parties (Note 5) |
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Current portion of lease liabilities (Note 7) |
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Current portion of notes payable (Note 6) |
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Notes payable – Related parties (Note 5) |
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Total Current Liabilities |
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Non-Current Liabilities |
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Notes Payable (Note 6) |
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Total Liabilities |
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Stockholders’ Deficit |
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Preferred Stock, $ |
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Common Stock, $ |
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Common Stock Issuable |
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Additional Paid-in Capital |
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Accumulated Deficit |
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Accumulated Other Comprehensive Loss |
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( |
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( |
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Total Stockholders’ Deficit |
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Total Liabilities and Stockholders’ Deficit |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-2 |
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
(unaudited)
Three months | Three months | Six months | Six months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
August 31, | August 31, | August 31, | August 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||
Cost of Revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gross Profit | ||||||||||||||||
Expenses | ||||||||||||||||
Amortization of right-of-use assets (Note 4) | ||||||||||||||||
Depreciation (Note 3) | ||||||||||||||||
General and administrative | ||||||||||||||||
Total Expenses | ||||||||||||||||
Loss Before Other Income (Expenses) and Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Income (Expenses) | ||||||||||||||||
Interest income | ||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gain on settlement of lease (Note 7) | ||||||||||||||||
Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for income taxes | ||||||||||||||||
Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Comprehensive Income (Loss) | ||||||||||||||||
Foreign currency translation adjustments | ( | ) | ||||||||||||||
Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net Loss Per Share – Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Weighted-average Common Shares Outstanding – Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
Consolidated Statement of Stockholders’ Deficit and Accumulated Other Comprehensive Loss
(Expressed in U.S. dollars)
(unaudited)
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Accumulated |
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Additional |
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Common |
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Other |
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Common Stock |
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Paid-in |
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Stock |
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Accumulated |
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Comprehensive |
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Shares |
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Amount |
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Capital |
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Issuable |
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Deficit |
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Loss |
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Total |
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Balance – February 28, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock subscriptions received |
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– |
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– |
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– |
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– |
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– |
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– |
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– |
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– |
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Common stock issuable for services |
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– |
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– |
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– |
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– |
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– |
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– |
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– |
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– |
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Net loss |
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– |
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– |
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– |
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– |
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( |
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– |
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( |
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– |
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– |
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– |
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Foreign currency translation adjustments |
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– |
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– |
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– |
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– |
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– |
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( |
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( |
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Balance – May 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Common stock issued for cash |
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( |
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– |
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– |
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Common stock issued for services |
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( |
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– |
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– |
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Common stock issuable for services |
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– |
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– |
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– |
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– |
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Net loss |
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– |
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– |
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– |
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– |
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( |
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– |
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Foreign currency translation adjustments |
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– |
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– |
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– |
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– |
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Balance – August 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
) |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
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 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
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 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-5 |
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
(unaudited)
Six months Ended August 31, 2024 | Six months Ended August 31, 2023 | |||||||
Cash Flows from Operating Activities | ||||||||
Net Loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Amortization of right-of-use assets | ||||||||
Common stock issued or issuable for services | ||||||||
Depreciation | ||||||||
Gain on settlement of lease | ( | ) | ||||||
Interest expense on lease liability | ||||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | ||||||||
Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
Deposits | ||||||||
Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
Accounts payable – related party | ||||||||
Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
Cash Flows from Investing Activities | ||||||||
Purchase of property and equipment | ( | ) | ||||||
Net Cash Used in Investing Activities | ( | ) | ||||||
Cash Flows from Financing Activities | ||||||||
– | – | |||||||
Proceeds from common stock issued for cash | ||||||||
Repayment of lease liabilities | ( | ) | ||||||
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 | $ | $ | – | |||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-6 |
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1.
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Nature of Operations and Continuance of Business
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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 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.
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2. |
Summary of Significant Accounting Policies |
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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.
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b) |
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.
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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.
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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 August 31, 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.
|
e) |
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 |
3. | Property and Equipment, Net |
Property and equipment, net, consists of the following:
Cost | Accumulated Depreciation | August 31, 2024 Net Carrying Value | February 29, 2024 Net Carrying Value | |||||||||||||
Computer equipment | $ | $ | ( | ) | $ | $ | ||||||||||
Computer software | ( | ) | ||||||||||||||
Furniture and fixtures | ( | ) | ||||||||||||||
Motor vehicle | ( | ) | ||||||||||||||
Office equipment | ( | ) | ||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ||||||||||
During the six months ended August 31, 2024, the Company recorded depreciation expense of $3,855 (2023
–
$13,190 ). During the six months ended August 31, 2024, the Company acquired $nil (2023
–
$1,180 ) of computer equipment and $nil (2023
–
$21,962 ) of motor vehicles.
4. | Right-Of-Use Assets, Net |
Right-of-use assets, net, consist of the following:
Cost | Accumulated Amortization | August 31, 2024 Net Carrying Value | February 29, 2024 Net Carrying Value | |||||||||||||
Right-of-use building (operating lease) | $ | $ | ( | ) | $ | $ | ||||||||||
Total | $ | $ | ( | ) | $ | $ | ||||||||||
During the six months ended August 31, 2024, the Company recorded rent expense of $10,679 (2023 - $10,032 ) 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 .
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 $ August 31, 2024 , the outstanding principal is $ February 29, 2024 – $ February 29, 2024 – $ |
b) | On September 7, 2021, the Company entered into a promissory note with the CEO of the Company for $ August 31, 2024 , the outstanding principal is $ February 29, 2024 – $ February 29, 2024 – $ |
c) | On February 11, 2022, the Company entered into a promissory note with the CEO of the Company for $ August 31, 2024 , the outstanding principal is $ February 29, 2024 – $ February 29, 2024 – $ |
d) | On April 14, 2021, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ August 31, 2024 , the outstanding principal is $ February 29, 2024 – $ February 29, 2024 – $ |
e) | On February 11, 2022, the Company entered into a promissory note with a company controlled by a significant shareholder of the Company for $ August 31, 2024 , the outstanding principal is $ February 29, 2024 – $ February 29, 2024 – $ |
| F-8 |
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 $ |
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) | As at August 31, 2024, the Company owes a total of $ |
j) | During the six months ended August 31, 2024, the Company incurred salary expenses of $ |
k) | During the six months ended August 31, 2024, the Company incurred directors’ fees of |
l) | During the six months ended August 31, 2024, the Company incurred directors’ fees of $ |
m) | During the six months ended August 31, 2024, 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 $ August 31, 2024 , the Company has recognized accrued interest of $ February 29, 2024 – $ |
b) | On May 27, 2020, the Company entered into a promissory note with the U.S. Small Business Administration for $ February 29, 2024 – $ |
c) | On October 22, 2021, the Company entered into a promissory note with a third-party lender for $ August 31, 2024 , the Company has recognized accrued interest of $ ( February 29, 2024 – $ included in accounts payable and accrued liabilities. |
7. | 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 $512 (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 six months ended August 31, 2024, the Company paid a total of $nil (2023 - $1,021 ) 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 $2,549 (R47,204 ) resulting in a gain on settlement of $1,052 (R19,480 ). 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 $1,192 (R22,000 ) for the first year, $1,275 (R23,540 ) in the second year, $1,364 (R25,188 ) in the third year, and $1,460 (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 $1,679 (R31,000 ) for the first year and $1,780 (R32,860 ) 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 August 31, 2024:
Years ending February 28: | Building Lease (Operating Lease) | |||
2025 | $ | |||
Net minimum lease payments | ||||
Less: amount representing interest payments | ( | ) | ||
Present value of net minimum lease payments | ||||
Less: current portion | ( | ) | ||
Long-term portion | $ | |||
8. | Common Stock |
Share transactions for the six months ended August 31, 2024:
a) | On June 13, 2024, the Company issued . At the date of acquisition, the carrying value of the non-controlling interest was $, resulting in a loss of $ |
b) | On July 22, 2024, the Company issued |
c) | The Company accrued |
Share transactions for the six months August 31, 2023:
a) | On July 17, 2023, the Company issued |
b) | The Company accrued $ |
9.
Concentrations
The Company’s revenues were concentrated among two customers for the six months ended August 31, 2024, and three customers for the six months ended August 31, 2023.
Customer | Six months Ended August 31, 2024 | |||
1 | % | |||
2 | % | |||
Customer | Six months Ended August 31, 2023 | |||
1 | % | |||
2 | % | |||
3 | % | |||
| F-10 |
The Company’s receivables were concentrated among two customers as at August 31, 2024, and one customer as at February 29, 2024:
Customer | August 31, 2024 | |||
1 | % | |||
2 | % | |||
Customer | February 29 , 2024 | |||
1 | % | |||
10. | Commitments and Contingencies |
a) | 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 |
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 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.
b) | On September 1, 2022, the Company entered into an agreement with a Director of the Company for a term of 12 months. In consideration for the services to be provided, the Company agreed to pay the Director February 29, 2024 , the Company recognized board member compensation of $ February 29, 2024 , another |
On August 16, 2023, the Company extended its Agreement with the Director for a new term of 12 months, effective September 1, 2023. In consideration of services to be rendered, the Company shall pay the director 100,000 restricted shares of common stock, of which 50,000 6 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
August 31, 2024
, a total of 116,667 shares (February 29, 2024 – 66,667 shares) of common stock remain issuable to the director.
c) | 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 |
Management has evaluated commitments and contingencies and is unaware of any legal matters or other contingencies requiring disclosure through period-end.
| F-11 |
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 August 31, 2024, the balance of the deposit was $11,356 (R200,000 ) (February 29, 2024
–
$10,408 (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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – 3 Month Periods Ending August 31, 2024 and August 31, 2023.
Reliance Upon One or a Few Customers
The Company’s revenues were concentrated among two customers for the six months ended August 31, 2024, and three customers for the six months ended August 31, 2023.
Customer | Six months Ended August 31, 2024 | |||
1 | 32 | % | ||
2 | 14 | % | ||
Customer | Six months Ended August 31, 2023 | |||
1 | 24 | % | ||
2 | 20 | % | ||
3 | 11 | % | ||
| F-12 |
The Company’s receivables were concentrated among two customers as at August 31, 2024, and one customer as at February 29, 2024:
Customer | August 31, 2024 | |||
1 | 32 | % | ||
2 | 23 | % | ||
Customer | February 29, 2024 | |||
1 | 65 | % | ||
Trends and Uncertainties
Our business is subject to the following trends and uncertainties:
· | Whether our system will be adaptable to US needs |
· | Whether we will develop interest in our software system in the US |
· | The level of activity of credit facilities and their need for our software |
Going Concern
Our financial statements have been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge its liabilities and commitments in the normal course of business for the foreseeable future. We had an accumulated deficit of ($1,773,866) at August 31, 2024. As of August 31, 2024, we do not have revenues sufficient to execute our business plan. We intend to fund operations through equity financing arrangements; however, there is no assurance that we will be successful.
| F-13 |
Results of Operations: For the 3 months ended August 31, 2024 and August 31, 2023
Revenues
Our revenues for the 3-month period ended August 31, 2024 and 2023 were $168,071 and $364,042 respectively, reflecting decreased revenues of $195,971. The $196,171 of decreased revenues is primarily attributable to a reduction in transactional revenue in our South African operations.
Net Loss/Profit
We had a net loss of $191,324 and a net loss of $174,618 for the 3-months ended August 31, 2024 and 2023, respectively, reflecting an increased net loss of $16,706, which increased net loss is primarily attributable to a reduction in transactional revenue in our South African operations.
Expenses
We incurred total expenses of $302,897 and $373,834, respectively, for the 3-month period ended August 31, 2024 and 2023, reflecting decreased expenses of $70,937, which is primarily attributable to a decrease in general and administrative expenses.
Results of Operations: For the 6 months ended August 31, 2024 and August 31, 2023
Revenues
Our revenues for the 6-month period ended August 31, 2024 and 2023 were $425,320 and $696,618, respectively, reflecting decreased revenues of $271,298. The decreased revenues of $271,298 is primarily attributable to a decrease in transactional revenue in our South African operations.
Net Loss/Profit
We had a net loss of $342,001 and a net loss of $206,838 for the 6-months ended August 31, 2024 and 2023 , respectively, reflecting an increased net loss of $135,163, which increased net loss is primarily attributable to a decrease in our transactional revenue in our South African operations.
Expenses
We incurred total expenses of $569,811 and $573,339, respectively, for the 6-month period ended August 31, 2024 and 2023, reflecting decreased total expenses of $3,528, which is primarily attributable to a decrease in general and administrative expenses.
Liquidity and Capital Resources
We had working capital of ($281,627) on August 31, 2024 and working capital of ($229,865) at our fiscal year end of February 28, 2024, representing decreased working capital of $51,762.
Our net cash used in operating activities was ($651,056) and ($79,847) for the 6 months ended August 31, 2024 and 2023 reflecting increased net cash used in operating activities of $571,209.
Our net cash used in investing activities were ($0) and ($23,142), respectively, for the 6 months ended August 31, 2024 and 2023, reflecting decreased net cash used in investing activities of $23,142.
Our net cash provided by financing activities was $100,000 and $108,979 for the 6-month period ended August 31, 2024 and 2023, respectively, reflecting decreased net cash provided by financing activities of $8,979.
| F-14 |
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
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer/Chief Accounting Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our report as of the end of the period covered by this report. This is because we have not sufficiently developed our segregation of duties and we do not have an audit committee.
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.
| F-15 |
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 us 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.
None
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 | |
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 | |
| II-1 |
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/ Jaco C. Folscher | |
Jaco C. Folscher | |
Chief Executive Officer | |
(Principal Executive Officer & Chief Executive Officer) |
By: /s/ Jaco C. Folscher | |
Jaco C. Folscher | |
Chief Financial Officer | |
(Chief Financial Officer/Chief Accounting Officer) | |
| II-2 |
EXHIBIT 31.1
CERTIFICATION
CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Jacob C. Folscher, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of UPAY, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrants’ other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: January 13, 2025
/s/ Jacob C. Folscher |
|
Jacob C. Folscher |
|
(Principal Executive Officer & Chief Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION
CHIEF FINANCIAL OFFICER/CHIEF ACCOUNTING OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Jacob C. Folscher, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of UPAY, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrants’ other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: January 13, 2025
/s/ Jacob C. Folscher |
|
Jacob C. Folscher |
|
Chief Financial Officer/Chief Accounting Officer |
|
(Principal Financial Officer and Principal Accounting Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of UPAY, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Quarterly Report on Form 10-Q/A for the quarter ended August 31, 2024 (the “Form 10-Q/A”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q/A.
Date: January 13, 2025
/s/ Jaco C. Folscher |
|
Jaco C. Folscher |
|
Principal Executive Officer/Chief Executive Officer |
|
(Principal Executive Officer and Chief Executive Officer) |
|
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of UPAY, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Quarterly Report on Form 10-Q/A for the quarter ended August 31, 2024 (the “Form 10-Q/A”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q/A fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.
Date: January 13, 2025 |
|
|
|
/s/ Jaco C. Folscher |
|
Jaco C. Folscher |
|
Chief Financial Officer/Chief Accounting Officer |
|
(Principal Financial Officer/Chief Financial Officer/Principal Accounting Officer) |
|
The foregoing certifications are being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-QA for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.