10-Q

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, 2017

or

o   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

UPAY, Inc.

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

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

3010 LBJ Freeway, 12^th Floor

Dallas, Texas 75234

(Address of principal executive offices)

(972) 888-6052

(Company’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller Reporting Company	x
Emerging Growth Company	x

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 o No x

The Company has 25,915,310 shares outstanding as of July 24, 2018.

TABLE OF CONTENTS

		Page
	PART I — Financial Information	F-1
Item 1.	Consolidated Financial Statements (unaudited)	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative  and Qualitative Disclosures about Market Risk	4
Item 4.	Controls and Procedures	4
	PART II — Other Information	5
Item 1.	Legal Proceedings	5
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	Mine Safety Disclosures	6
Item 5.	Other Information	6
Item 6.	Exhibits	6
	Signatures	7

UPAY, Inc.

Consolidated Financial Statements

(unaudited)

Table of Contents	Index
Consolidated Balance Sheets (unaudited)	F-2
Consolidated Statements of Operations and Comprehensive Loss (unaudited)	F-3
Consolidated Statements of Cash Flows (unaudited)	F-4
Notes to the Consolidated Financial Statements (unaudited)	F-5

F-1

UPAY, Inc.

Consolidated Balance Sheets

(Expressed in U.S. dollars)

	May 31, 2017			February 28, 2017
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	266,848		$	262,974
Accounts receivable		55,697			89,669
Prepaid expenses and other current assets		2,290			2,304
Total Current Assets		324,835			354,947
Property and Equipment, Net		7,263			8,927
Total Assets	$	332,098		$	363,874
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	204,171		$	217,589
Taxes payable		4,437			4,464
Total Liabilities		208,608			222,053
Stockholders’ Equity
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; 23,915,310 shares issued and outstanding		23,915			23,915
Additional Paid in Capital		172,732			172,732
Accumulated Deficit		(66,738	)		(48,506	)
Accumulated Other Comprehensive Loss		(6,419	)		(6,320	)
Total Stockholders’ Equity		123,490			141,821
Total Liabilities and Stockholders’ Equity	$	332,098		$	363,874

The accompanying notes are an integral part of these unaudited 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,
	2017			2016
Revenue	$	175,336		$	54,213
Cost of Revenue		(27,784	)		(11,736	)
Gross Profit		147,552			42,477
Expenses
General and administrative		164,556			102,271
Depreciation		1,597			1,248
Total Expenses		166,153			103,519
Net Loss Before Other Expenses and Income Taxes		(18,601	)		(61,042	)
Other Income (Expenses)
Interest income		370			168
Interest expense		—			(416	)
Loss Before Income Taxes		(18,231	)		(61,290	)
Provision for income taxes		—			—
Net Loss		(18,231	)		(61,290	)
Other Comprehensive Income (Loss)
Foreign currency translation adjustments		(99	)		(18	)
Comprehensive Loss	$	(18,330	)	$	(61,308	)
Net Loss Per Share – Basic and Diluted	$	(0.00	)	$	(0.00	)
Weighted-average Common Shares Outstanding - Basic and Diluted		23,915,310			23,372,408

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

F-3

UPAY, Inc.

Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

(unaudited)

	Three Months Ended May 31, 2017			Three Months Ended May 31, 2016
Cash Flows from Operating Activities
Net loss	$	(18,231	)	$	(61,290	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,597			1,248
Shares issued for services		—			3,000
Changes in operating assets and liabilities:
Accounts receivable		33,972			32,000
Prepaid expenses and other current assets		14			—
Accounts payable		(17,379	)		16,799
Accrued expenses		4,000			—
Net Cash Provided by (Used in) Operating Activities		3,973			(8,243	)
Cash Flows from Investing Activities
Repayment of loan receivable		—			940
Cash paid for purchase of fixed assets		—			(793	)
Net Cash Provided by Investing Activities		—			147
Cash Flows from Financing Activities
Principal payments on capital lease obligation		—			(175	)
Proceeds from issuance of common stock		—			60,245
Net Cash Provided by Financing Activities		—			60,070
Effect of Exchange Rate Changes on Cash		(99	)		153
Change in Cash and Cash Equivalents		3,874			52,127
Cash and Cash Equivalents - Beginning of Period		262,974			146,090
Cash and Cash Equivalents - End of Period	$	266,848		$	198,217
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	—		$	416
Income taxes paid	$	—		$	—

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

F-4

1. Nature of Operations and Continuance of Business

UPAY, Inc. (the “Company”) was incorporated in the State of Nevada on July 8, 2015. By a Share Exchange Agreement dated November 4, 2015, the Company agreed to acquire all of the issued and outstanding shares of Rent Pay (Pty) Ltd (“Rent Pay”), in exchange for 200,000 shares of the Company’s common stock. The acquisition is a capital transaction in substance and therefore has been accounted for as a recapitalization. Rent Pay was incorporated in South Africa on February 1, 2012. Because Rent Pay is 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.

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 Financial statements include the accounts of the Company and its subsidiary Rent Pay. All significant intercompany transactions and accounts have been eliminated in consolidation.

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 28, 2017, 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) Accounts Receivable

Trade accounts receivable are recorded at net invoice value and such receivables are non-interest bearing. Receivables are considered past due based on the contractual payment terms. Receivables are reviewed and specific amounts are reserved if collectability is no longer reasonably assured.

e) Revenue Recognition

The Company derives revenue through licensing its software and by collecting various transaction fees from third party debit orders.

The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured.

F-5

The company has several revenue streams and they are recognized as below:

Branch Setup Fees

This is a once off cost that the company charges when a customer is onboarded. The billing occurs in the same month that the debit order is collected. This results in no accounts receivable at the end of the month.

Data Migration Fees.

This only applies to a customer applying to migrate client data from a previous system to our system. We invoice for this service as soon as data is successfully transferred, imported and verified by our customer and when transactions begin to occur. Revenue is recognized upon invoicing and payment is collected within two days due to debit order mandates signed by the customer as part of the agreement. This results in no outstanding accounts receivable as of the end of each month.

Monthly Rental Fees

Our software is made available on a web based software platform and is offered as software as a service. Our agreement is an evergreen agreement (auto-renewed) and if not terminated by a customer, remains intact. Termination may occur by either party at any point with 30 days’ notice. The monthly software rental fee is payable every month per branch. Monthly rental fees are payable in advance, are invoiced prior to the end of the month and is also collected prior to the end of each month due to debit order mandate signed by the customer. We record this as deferred revenue and recognize the revenue during the month of service. These deferred revenues are held in the customer control account, which is included in the AP section of our financial statements.

Development Service Fee

We have some clients that we do custom software development for, on some versions of our software. Here we adopt a scrum methodology with 2-week development sprints. We agreed on a price per hour for development with these clients. We send an invoice for the work completed and usually get paid within the same month. On this revenue stream we do not run a debit order, but a client needs to pay invoices before we continue with the next development increment. Payments are due upon invoicing but at times it can take up to 30 days. Any unpaid invoices, if any are recorded to accounts receivable at the end of each month, but invoicing and payment usually happen within the same month.

Transactional Fees

We offer an integrated debit order facility built into our software. When our client (lenders) creates loans with consumers, the consumer contracts directly with us on a separate agreement. We then act as a third-party payment provider, to facilitate the repayment of loans from the consumer to the lender by debit order.

We are registered as a third-party payment provider and all payments collected on this stream are settled by the bank directly into our bank account. We only charge a fee on successful debit order collections and retain that fee when we distribute funds collected on behalf of consumers. The transaction fees charged for these transactions are called CTC and they are displayed on the signed agreement that the consumer signs with us. The CTC fees are paid by the consumer, in addition to the loan installment collected. The loan installment and CTC are collected as one amount, but the CTC is retained by us upon distribution of funds to lenders. Our software system counts and accounts for each individual transaction and its amount and this is generated on a report on our Acpas software. We use this report for revenue recognition in our billing system. Revenue is recorded as a lump sum based on this report at the end of each month. If there are any CTC that still needs to be recognized at an end of a period, it will be recorded as accounts receivable.

Credit Protection Insurance Commission

Some insurance companies offer insurance products on loans that cover the consumer for the full repayment of his debt to the lender, in case of unforeseen events. There is an insurance product from one of our suppliers (an insurance company) that we make available for the insurance company on our software program. In return for making this product available the insurance company would pay us monthly commission on premiums they received. This is a product offered by the insurance company directly to the consumer and we only make it available on our software platform. If this option is selected when a loan is created, an additional fee is added to the loan repayment amount. The software system calculates the insurance premiums and all premiums for a given month are paid by lenders to the insurance company, or lenders use our payment service and instruct us to manage the payments on their behalf.

F-6

After receiving the premiums and supporting reports, the insurance company will then calculate and verify the premiums paid and premium claw back to the point and work out the commission payable based on the premiums received. The insurance company will then pay all commissions earned by us and our clients. Commissions are not earned until collection of the premiums from the consumers and the remittance of the premiums to the insurance company and when the insurance company did their final calculations. We distribute the commission amounts due to our customers within two days of receiving such payments from the insurance company.

f) Earnings (Loss) Per Share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share on the face of the statement of operations. EPS is calculated using the weighted-average number of common shares outstanding during the period. Diluted EPS if applicable is calculated by dividing net income available to common stockholders for the period by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS would reflect the potential dilution from common shares issuable through stock options, performance-based restricted stock units that have satisfied their performance factor and restricted stock units using the treasury stock method.

g) 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, 2017, 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.

h) Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its 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, 2017 Net Carrying Value		February 28, 2017 Net Carrying Value
IT equipment	$	3,912	$	(1,527	)	$	2,385	$	2,724
Motor vehicle		21,036		(18,780	)		2,256		3,328
Furniture and fixtures		2,738		(1,847	)		891		1,011
Office equipment		2,426		(695	)		1,731		1,864
Total	$	30,112	$	(22,849	)	$	7,263	$	8,927

During the three months ended May 31, 2017, the Company recorded depreciation expense of $1,597 (2016 - $1,248).

4.Common Stock

There were no common stock transactions during the three months ended May 31, 2017.

F-7

5.Warrants

The following table summarizes the continuity of the Company’s warrants:

	Number of warrants		Weighted average exercise price $
Balance, February 28, 2017		—		—
Issued		2,020,000		3.51
Balance, May 31, 2017		2,020,000		3.51

F-8

6.Commitments

On November 11, 2015, the Company entered into a lease agreement for renting office space in South Africa. The term of the lease is for two years commencing March 1, 2016. The monthly base rate is $681 (R8,918) in the first year and increases to $749 (R9,809) in the second year of the lease. Lease expense for the three months ended May 31, 2017 was $3,116 (2016 - $1,768).

On April 18, 2016, the Company entered into a lease agreement for renting office space in Dallas, Texas. The term of the lease is for one year commencing May 1, 2016, renews annually, and the monthly base rate is $715. Lease expense for the three months ended May 31, 2017 was $2,686 (2016 - $1,594).

As of May 31, 2017, the future lease commitments are as follows:

Year		Operating Lease Commitments
2018	$	12,776

On June 1, 2015 the Company entered into Consultancy Agreements with two consultants whereby the consultants will assist the Company with the filing of the S-1 Registration Statement of the Company. In consideration for these services the Company will issue to each consultant 10,000 cashless warrants within ten days of the Company receiving an effectiveness notice of the S-1 filing from the Securities and Exchange Commission. The warrants have an exercise price of $5.00 and are exercisable for a two-year period following their issuance. During the three months ended May 31, 2017, the Company issued each consultant 10,000 cashless warrants pursuant to the agreements.

On January 18, 2016, the Company entered into a Software Services Agreement whereby a company will provide services to develop software in consideration for 1,800,000 restricted shares of common stock to be issued within ten days of the completion of the software development. As of May 31, 2017, the services and software have not been completed.

On June 3, 2016, the Company entered into a Consultancy Agreement for business advisory services in consideration for 300,000 restricted shares of common stock and 2,000,000 cashless warrants that have an exercise price of $3.50 and an exercise period of two years following the effectiveness notice of the S-1 filing from the Securities and Exchange Commission. On June 15, 2016, the Company issued 300,000 restricted shares of common stock with a fair value of $30,000 pursuant to the agreement. On May 29, 2017, the Company issued 2,000,000 cashless warrants pursuant to the agreement.

7. Concentrations

The Company’s revenues were concentrated among three customers for the three months ended May 31, 2017 and three customers for the three months ended May 31, 2016:

Customer		Three Months Ended May 31, 2017
	1		37	%
	2		14	%
	3		13	%

Customer		Three Months Ended May 31, 2016
	1		26	%
	2		15	%
	3		10	%

8. Subsequent Events   On April 16, 2018, pursuant to an Asset Purchase Agreement, the Company acquired software named “Theme Studio” from Twin Harbor Web Solutions in exchange for 2,000,000 common stock shares of the Company.

The Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events requiring recognition as of May 31, 2017, have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

F-9

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward- looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

• Our results are vulnerable to economic conditions;

• Our ability to raise adequate working capital;

• Loss of customers or sales weakness;

• Inability to achieve sales levels or other operating results;

• The unavailability of funds for expansion purposes;

• Operational inefficiencies;

• 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 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

3

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 $(66,738) at May 31, 2017 and a net loss of $18,321 for the 3 months ended May 31, 2017. As of May 31, 2017, 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.

Results of Operations: For the 3 months ended May 31, 2017 and May 31, 2016

Revenues

Our revenues for the 3-month period ended May 31, 2017 and 2016 were $175,336 and $54,213, respectively, reflecting increased revenues of $121,123. The $121,123 of increased revenues is primarily attributable to growth in our transactional revenue from our client base in South Africa.

Net Loss

We had a net comprehensive loss of $18,330 and a net loss of $61,308 for the 3-month ended May 31, 2017 and 2016, respectively, reflecting a decrease of $42,978, which is primarily attributable to growth in transactional revenue in South Africa.

Operating Expenses

We incurred total operating expenses of $166,153 and $103,519, respectively, for the 3-month period ended May 31, 2017 and 2016, reflecting a $62,634 increase for the 3 months ended May 31, 2018, which is attributable to a $62,285 increase in general and administrative expenses.

Liquidity and Capital Resources

We had working capital of $116,227 at May 31, 2017 and working capital of $132,894 at our fiscal year ended February 28, 2017, representing a decrease of $16,667 in working capital.

Our net cash flows provided by operating activities was $3,973 for the 3 months ended May 31, 2017 compared to $(8,243) for the 3 months ended May 31, 2016, representing an $12,216 increase in cash flows provided by operating activities.

Our net cash used in investing activities were $0 and $147, respectively, for the three months ended May 31, 2017 and 2016, reflecting a $147 decrease in cash used in investing activities.

Our net cash provided by financing activities was $0 for the 3-month period ended May 31, 2017, compared to $60,070 for the three months ended May 31, 2016 reflecting a decrease in financing activities of $60,070, which resulted primarily from our initial private placement offering that closed.

Off-Balance sheet arrangements

None.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

Item 4.   Controls and Procedures.

4

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. We have no formal control process related to the identification and approval of related party transactions.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  We will continue to evaluate the effectiveness of internal controls and procedures on an on-going basis.

PART II – OTHER INFORMATION

Item 1.   Legal Proceedings.

We know of no material pending legal proceedings to which our company or our subsidiary is a party or of which any of our properties, or the properties of our subsidiary, is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

5

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or our subsidiary or has a material interest adverse to our company or our subsidiary.

Item 1A.   Risk Factors

As a smaller reporting company, we are not required to provide risk factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

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
31.1	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

6

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 30, 2018

UPAY, INC.

By:       /s/ Wouter A. Fouche

Wouter A. Fouche

Chief Executive Officer

(Principal Executive Officer & Chief Executive Officer)

By:       /s/ Jacob C. Folscher

Jacob C. Folscher

Chief Financial Officer

(Chief Financial Officer/Chief Accounting Officer)

7

EX-31.1

EXHIBIT 31.1

CERTIFICATION

CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Wouter A. Fouche, 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)) 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: July 30, 2018

/s/ Wouter A. Fouche

Wouter A. Fouche

(Principal Executive Officer & Chief Executive Officer)

EX-31.2

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)) 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: July 30, 2018

/s/  Jacob C. Folscher

Jacob C. Folscher

Chief Financial Officer/Chief Accounting Officer

(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

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 for the quarter ended May 31, 2017 (the “Form 10-Q”) 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.

Date: July 30, 2018

/s/ Wouter A. Fouche

Wouter A. Fouche

Principal Executive Officer/Chief Executive Officer  

(Principal Executive Officer and Chief Executive Officer)    

EX-32.2

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 for the quarter ended May 31, 2017 (the “Form 10-Q”) 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.

Date: July 30, 2018

/s/ Jacob C. Folscher

Jacob 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-Q 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.

XML

Document and Entity Information - USD ($)	3 Months Ended
	May 31, 2017	Jul. 24, 2018
Document And Entity Information
Entity Registrant Name	UPAY, Inc.
Entity Central Index Key	0001677897
Document Type	10-Q
Document Period End Date	May 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--02-28
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 0
Entity Common Stock, Shares Outstanding		25,915,310
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	May 31, 2017	Feb. 28, 2017
Current Assets
Cash and cash equivalents	$ 266,848	$ 262,974
Accounts receivable	55,697	89,669
Prepaid expenses and other current assets	2,290	2,304
Total Current Assets	324,835	354,947
Property and Equipment, Net	7,263	8,927
Total Assets	332,098	363,874
Current Liabilities
Accounts payable	204,171	217,589
Taxes payable	4,437	4,464
Total Current Liabilities	208,608	222,053
Total Liabilities	208,608	222,053
Stockholders' Equity
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; 23,915,310 shares issued and outstanding	23,915	23,915
Additional Paid in Capital	172,732	172,732
Accumulated Deficit	(66,738)	(48,506)
Accumulated Other Comprehensive Loss	(6,419)	(6,320)
Total Stockholders' Equity	123,490	141,821
Total Liabilities and Stockholders' Equity	$ 332,098	$ 363,874

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	May 31, 2017	Feb. 28, 2017
Consolidated Balance Sheets Unaudited
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	23,915,310	23,915,310
Common Stock, Shares, Outstanding	23,915,310	23,915,310

XML

Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($)	3 Months Ended
	May 31, 2017	May 31, 2016
Consolidated Statements Of Operations And Comprehensive Loss
Revenue	$ 175,336	$ 54,213
Cost of Revenue	(27,784)	(11,736)
Gross Profit	147,552	42,477
Expenses
General and administrative	164,556	102,271
Depreciation	1,597	1,248
Total Expenses	166,153	103,519
Net Loss Before Other Expenses and Income Taxes	(18,601)	(61,042)
Other Income (Expenses)
Interest income	370	168
Interest expense		(416)
Loss Before Income Taxes	(18,231)	(61,290)
Provision for income taxes
Net Loss	(18,231)	(61,290)
Other Comprehensive Income (Loss)
Foreign currency translation adjustments	(99)	(18)
Comprehensive Loss	$ (18,330)	$ (61,308)
Net (Loss) Earnings Per Share - Basic and Diluted	$ 0.00	$ 0.00
Weighted-average Common Shares Outstanding - Basic and Diluted	23,915,310	23,372,408

XML

Consolidated Statements of Cash Flows (unaudited) - USD ($)	3 Months Ended
	May 31, 2017	May 31, 2016
Cash Flows from Operating Activities
Net (loss) income	$ (18,231)	$ (61,290)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,597	1,248
Changes in operating assets and liabilities:
Accounts receivable	33,972	32,000
Prepaid expenses and other current assets	14
Accounts payable	(17,379)	16,799
Accrued expenses	4,000
Net Cash Provided by (Used in) Operating Activities	3,973	(8,243)
Cash Flows from Investing Activities
Repayment of loan receivable		940
Cash paid for purchase of fixed assets		(793)
Net Cash Provided by Investing Activities		147
Cash Flows from Financing Activities
Principal payments on capital lease obligation		(175)
Proceeds from issuance of common stock		60,245
Net Cash Provided by Financing Activities		60,070
Effect of Exchange Rate Changes on Cash	(99)	153
Change in Cash and Cash Equivalents	3,874	52,127
Cash and Cash Equivalents - Beginning of Year	262,974	146,090
Cash and Cash Equivalents - End of Year	266,848	198,217
Supplemental Disclosures of Cash Flow Information:
Interest paid		416
Income taxes paid

XML

Nature of Operations and Continuance of Business

3 Months Ended

May 31, 2017

Nature Of Operations And Continuance Of Business

Nature of Operations and Continuance of Business

1. Nature of Operations and Continuance of Business

UPAY, Inc. (the “Company”) was incorporated in the State of Nevada on July 8, 2015. By a Share Exchange Agreement dated November 4, 2015, the Company agreed to acquire all of the issued and outstanding shares of Rent Pay (Pty) Ltd (“Rent Pay”), in exchange for 200,000 shares of the Company’s common stock. The acquisition is a capital transaction in substance and therefore has been accounted for as a recapitalization. Rent Pay was incorporated in South Africa on February 1, 2012. Because Rent Pay is 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.

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

XML

Summary of Significant Accounting Policies

3 Months Ended

May 31, 2017

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

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 Financial statements include the accounts of the Company and its subsidiary Rent Pay. All significant intercompany transactions and accounts have been eliminated in consolidation.

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 28, 2017, 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) Accounts Receivable

Trade accounts receivable are recorded at net invoice value and such receivables are non-interest bearing. Receivables are considered past due based on the contractual payment terms. Receivables are reviewed and specific amounts are reserved if collectability is no longer reasonably assured.

e) Revenue Recognition

The Company derives revenue through licensing its software and by collecting various transaction fees from third party debit orders.

The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured.

The company has several revenue streams and they are recognized as below:

Branch Setup Fees

This is a once off cost that the company charges when a customer is onboarded. The billing occurs in the same month that the debit order is collected. This results in no accounts receivable at the end of the month.

Data Migration Fees.

This only applies to a customer applying to migrate client data from a previous system to our system. We invoice for this service as soon as data is successfully transferred, imported and verified by our customer and when transactions begin to occur. Revenue is recognized upon invoicing and payment is collected within two days due to debit order mandates signed by the customer as part of the agreement. This results in no outstanding accounts receivable as of the end of each month.

Monthly Rental Fees

Our software is made available on a web based software platform and is offered as software as a service. Our agreement is an evergreen agreement (auto-renewed) and if not terminated by a customer, remains intact. Termination may occur by either party at any point with 30 days’ notice. The monthly software rental fee is payable every month per branch. Monthly rental fees are payable in advance, are invoiced prior to the end of the month and is also collected prior to the end of each month due to debit order mandate signed by the customer. We record this as deferred revenue and recognize the revenue during the month of service. These deferred revenues are held in the customer control account, which is included in the AP section of our financial statements.

Development Service Fee

We have some clients that we do custom software development for, on some versions of our software. Here we adopt a scrum methodology with 2-week development sprints. We agreed on a price per hour for development with these clients. We send an invoice for the work completed and usually get paid within the same month. On this revenue stream we do not run a debit order, but a client needs to pay invoices before we continue with the next development increment. Payments are due upon invoicing but at times it can take up to 30 days. Any unpaid invoices, if any are recorded to accounts receivable at the end of each month, but invoicing and payment usually happen within the same month.

Transactional Fees

We offer an integrated debit order facility built into our software. When our client (lenders) creates loans with consumers, the consumer contracts directly with us on a separate agreement. We then act as a third-party payment provider, to facilitate the repayment of loans from the consumer to the lender by debit order.

We are registered as a third-party payment provider and all payments collected on this stream are settled by the bank directly into our bank account. We only charge a fee on successful debit order collections and retain that fee when we distribute funds collected on behalf of consumers. The transaction fees charged for these transactions are called CTC and they are displayed on the signed agreement that the consumer signs with us. The CTC fees are paid by the consumer, in addition to the loan installment collected. The loan installment and CTC are collected as one amount, but the CTC is retained by us upon distribution of funds to lenders. Our software system counts and accounts for each individual transaction and its amount and this is generated on a report on our Acpas software. We use this report for revenue recognition in our billing system. Revenue is recorded as a lump sum based on this report at the end of each month. If there are any CTC that still needs to be recognized at an end of a period, it will be recorded as accounts receivable.

Credit Protection Insurance Commission

Some insurance companies offer insurance products on loans that cover the consumer for the full repayment of his debt to the lender, in case of unforeseen events. There is an insurance product from one of our suppliers (an insurance company) that we make available for the insurance company on our software program. In return for making this product available the insurance company would pay us monthly commission on premiums they received. This is a product offered by the insurance company directly to the consumer and we only make it available on our software platform. If this option is selected when a loan is created, an additional fee is added to the loan repayment amount. The software system calculates the insurance premiums and all premiums for a given month are paid by lenders to the insurance company, or lenders use our payment service and instruct us to manage the payments on their behalf.

After receiving the premiums and supporting reports, the insurance company will then calculate and verify the premiums paid and premium claw back to the point and work out the commission payable based on the premiums received. The insurance company will then pay all commissions earned by us and our clients. Commissions are not earned until collection of the premiums from the consumers and the remittance of the premiums to the insurance company and when the insurance company did their final calculations. We distribute the commission amounts due to our customers within two days of receiving such payments from the insurance company.

f) Earnings (Loss) Per Share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share on the face of the statement of operations. EPS is calculated using the weighted-average number of common shares outstanding during the period. Diluted EPS if applicable is calculated by dividing net income available to common stockholders for the period by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS would reflect the potential dilution from common shares issuable through stock options, performance-based restricted stock units that have satisfied their performance factor and restricted stock units using the treasury stock method.

g) 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, 2017, 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.

h) Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its 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.

XML

Property and Equipment, Net

3 Months Ended

May 31, 2017

Property And Equipment Net

Property and Equipment, Net

3. Property and Equipment, Net

Property and equipment, net, consists of the following:

	Cost		Accumulated Depreciation			May 31, 2017 Net Carrying Value		February 28, 2017 Net Carrying Value
IT equipment	$	3,912	$	(1,527	)	$	2,385	$	2,724
Motor vehicle		21,036		(18,780	)		2,256		3,328
Furniture and fixtures		2,738		(1,847	)		891		1,011
Office equipment		2,426		(695	)		1,731		1,864
Total	$	30,112	$	(22,849	)	$	7,263	$	8,927

During the three months ended May 31, 2017, the Company recorded depreciation expense of $1,597 (2016 - $1,248).

XML

Common Stock

3 Months Ended

May 31, 2017

Common Stock

Common Stock

4. Common Stock

There were no common stock transactions during the three months ended May 31, 2017.

XML

Warrants

3 Months Ended

May 31, 2017

Warrants

Warrants

5. Warrants

The following table summarizes the continuity of the Company’s warrants:

	Number of warrants		Weighted average exercise price $
Balance, February 28, 2017		—		—
Issued		2,020,000		3.51
Balance, May 31, 2017		2,020,000		3.51

XML

Commitments

3 Months Ended

May 31, 2017

Commitments

Commitments

6. Commitments

On November 11, 2015, the Company entered into a lease agreement for renting office space in South Africa. The term of the lease is for two years commencing March 1, 2016. The monthly base rate is $681 (R8,918) in the first year and increases to $749 (R9,809) in the second year of the lease. Lease expense for the three months ended May 31, 2017 was $3,116 (2016 - $1,768).

On April 18, 2016, the Company entered into a lease agreement for renting office space in Dallas, Texas. The term of the lease is for one year commencing May 1, 2016, renews annually, and the monthly base rate is $715. Lease expense for the three months ended May 31, 2017 was $2,686 (2016 - $1,594).

As of May 31, 2017, the future lease commitments are as follows:

Year		Operating Lease Commitments
	2018	$	12,776

On June 1, 2015 the Company entered into Consultancy Agreements with two consultants whereby the consultants will assist the Company with the filing of the S-1 Registration Statement of the Company. In consideration for these services the Company will issue to each consultant 10,000 cashless warrants within ten days of the Company receiving an effectiveness notice of the S-1 filing from the Securities and Exchange Commission. The warrants have an exercise price of $5.00 and are exercisable for a two-year period following their issuance. During the three months ended May 31, 2017, the Company issued each consultant 10,000 cashless warrants pursuant to the agreements.

On January 18, 2016, the Company entered into a Software Services Agreement whereby a company will provide services to develop software in consideration for 1,800,000 restricted shares of common stock to be issued within ten days of the completion of the software development. As of May 31, 2017, the services and software have not been completed.

On June 3, 2016, the Company entered into a Consultancy Agreement for business advisory services in consideration for 300,000 restricted shares of common stock and 2,000,000 cashless warrants that have an exercise price of $3.50 and an exercise period of two years following the effectiveness notice of the S-1 filing from the Securities and Exchange Commission. On June 15, 2016, the Company issued 300,000 restricted shares of common stock with a fair value of $30,000 pursuant to the agreement. On May 29, 2017, the Company issued 2,000,000 cashless warrants pursuant to the agreement.

XML

Concentrations

3 Months Ended

May 31, 2017

Concentrations

Concentrations

7. Concentrations

The Company’s revenues were concentrated among three customers for the three months ended May 31, 2017 and three customers for the three months ended May 31, 2016:

Customer		Three Months Ended May 31, 2017
	1		37	%
	2		14	%
	3		13	%

Customer		Three Months Ended May 31, 2016
	1		26	%
	2		15	%
	3		10	%

XML

Subsequent Events

3 Months Ended

May 31, 2017

Subsequent Events [Abstract]

Subsequent Events

8. Subsequent Events

On April 16, 2018, pursuant to an Asset Purchase Agreement, the Company acquired software named “Theme Studio” from Twin Harbor Web Solutions in exchange for 2,000,000 common stock shares of the Company.

The Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events requiring recognition as of May 31, 2017, have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

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 Financial statements include the accounts of the Company and its subsidiary Rent Pay. All significant intercompany transactions and accounts have been eliminated in consolidation.

Interim Financial Statements

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 28, 2017, have been omitted.

Use of Estimates

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.

Accounts Receivable

d) Accounts Receivable

Trade accounts receivable are recorded at net invoice value and such receivables are non-interest bearing. Receivables are considered past due based on the contractual payment terms. Receivables are reviewed and specific amounts are reserved if collectability is no longer reasonably assured.

Revenue Recognition

e) Revenue Recognition

The Company derives revenue through licensing its software and by collecting various transaction fees from third party debit orders.

The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured.

The company has several revenue streams and they are recognized as below:

Branch Setup Fees

This is a once off cost that the company charges when a customer is onboarded. The billing occurs in the same month that the debit order is collected. This results in no accounts receivable at the end of the month.

Data Migration Fees.

This only applies to a customer applying to migrate client data from a previous system to our system. We invoice for this service as soon as data is successfully transferred, imported and verified by our customer and when transactions begin to occur. Revenue is recognized upon invoicing and payment is collected within two days due to debit order mandates signed by the customer as part of the agreement. This results in no outstanding accounts receivable as of the end of each month.

Monthly Rental Fees

Our software is made available on a web based software platform and is offered as software as a service. Our agreement is an evergreen agreement (auto-renewed) and if not terminated by a customer, remains intact. Termination may occur by either party at any point with 30 days’ notice. The monthly software rental fee is payable every month per branch. Monthly rental fees are payable in advance, are invoiced prior to the end of the month and is also collected prior to the end of each month due to debit order mandate signed by the customer. We record this as deferred revenue and recognize the revenue during the month of service. These deferred revenues are held in the customer control account, which is included in the AP section of our financial statements.

Development Service Fee

We have some clients that we do custom software development for, on some versions of our software. Here we adopt a scrum methodology with 2-week development sprints. We agreed on a price per hour for development with these clients. We send an invoice for the work completed and usually get paid within the same month. On this revenue stream we do not run a debit order, but a client needs to pay invoices before we continue with the next development increment. Payments are due upon invoicing but at times it can take up to 30 days. Any unpaid invoices, if any are recorded to accounts receivable at the end of each month, but invoicing and payment usually happen within the same month.

Transactional Fees

We offer an integrated debit order facility built into our software. When our client (lenders) creates loans with consumers, the consumer contracts directly with us on a separate agreement. We then act as a third-party payment provider, to facilitate the repayment of loans from the consumer to the lender by debit order.

We are registered as a third-party payment provider and all payments collected on this stream are settled by the bank directly into our bank account. We only charge a fee on successful debit order collections and retain that fee when we distribute funds collected on behalf of consumers. The transaction fees charged for these transactions are called CTC and they are displayed on the signed agreement that the consumer signs with us. The CTC fees are paid by the consumer, in addition to the loan installment collected. The loan installment and CTC are collected as one amount, but the CTC is retained by us upon distribution of funds to lenders. Our software system counts and accounts for each individual transaction and its amount and this is generated on a report on our Acpas software. We use this report for revenue recognition in our billing system. Revenue is recorded as a lump sum based on this report at the end of each month. If there are any CTC that still needs to be recognized at an end of a period, it will be recorded as accounts receivable.

Credit Protection Insurance Commission

Some insurance companies offer insurance products on loans that cover the consumer for the full repayment of his debt to the lender, in case of unforeseen events. There is an insurance product from one of our suppliers (an insurance company) that we make available for the insurance company on our software program. In return for making this product available the insurance company would pay us monthly commission on premiums they received. This is a product offered by the insurance company directly to the consumer and we only make it available on our software platform. If this option is selected when a loan is created, an additional fee is added to the loan repayment amount. The software system calculates the insurance premiums and all premiums for a given month are paid by lenders to the insurance company, or lenders use our payment service and instruct us to manage the payments on their behalf.

After receiving the premiums and supporting reports, the insurance company will then calculate and verify the premiums paid and premium claw back to the point and work out the commission payable based on the premiums received. The insurance company will then pay all commissions earned by us and our clients. Commissions are not earned until collection of the premiums from the consumers and the remittance of the premiums to the insurance company and when the insurance company did their final calculations. We distribute the commission amounts due to our customers within two days of receiving such payments from the insurance company.

Earnings (Loss) Per Share

f) Earnings (Loss) Per Share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share on the face of the statement of operations. EPS is calculated using the weighted-average number of common shares outstanding during the period. Diluted EPS if applicable is calculated by dividing net income available to common stockholders for the period by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS would reflect the potential dilution from common shares issuable through stock options, performance-based restricted stock units that have satisfied their performance factor and restricted stock units using the treasury stock method.

Going Concern

g) 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, 2017, the Company does not have revenues sufficient to execute its business plan. The Company intends to fund operations through equity financing arrangements. There is no assurance that this will be successful.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Recent Accounting Pronouncements

h) Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its 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.

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Property and Equipment, Net (Tables)

3 Months Ended

May 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property and equipment, net, consists of the following:

	Cost		Accumulated Depreciation			May 31, 2017 Net Carrying Value		February 28, 2017 Net Carrying Value
IT equipment	$	3,912	$	(1,527	)	$	2,385	$	2,724
Motor vehicle		21,036		(18,780	)		2,256		3,328
Furniture and fixtures		2,738		(1,847	)		891		1,011
Office equipment		2,426		(695	)		1,731		1,864
Total	$	30,112	$	(22,849	)	$	7,263	$	8,927

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Warrants (Tables)

3 Months Ended

May 31, 2017

Notes to Financial Statements

Schedule of Company Warrants

The following table summarizes the continuity of the Company’s warrants:

	Number of warrants		Weighted average exercise price $
Balance, February 28, 2017		—		—
Issued		2,020,000		3.51
Balance, May 31, 2017		2,020,000		3.51

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Commitments (Tables)

3 Months Ended

May 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

As of May 31, 2017, the future lease commitments are as follows:

Year		Operating Lease Commitments
	2018	$	12,776

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Concentrations (Tables)

3 Months Ended

May 31, 2017

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk, by Risk Factor

The Company’s revenues were concentrated among three customers for the three months ended May 31, 2017 and three customers for the three months ended May 31, 2016:

Customer		Three Months Ended May 31, 2017
	1		37	%
	2		14	%
	3		13	%

Customer		Three Months Ended May 31, 2016
	1		26	%
	2		15	%
	3		10	%

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Property and Equipment, Net (Details) - USD ($)	May 31, 2017	Feb. 28, 2017
Property, Plant and Equipment [Line Items]
Cost	$ 30,112
Accumulated depreciation	(22,849)
Net Carrying Value	7,263	$ 8,927
IT equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	3,912
Accumulated depreciation	(1,527)
Net Carrying Value	2,385	2,724
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Cost	21,036
Accumulated depreciation	(18,780)
Net Carrying Value	2,256	3,328
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Cost	2,738
Accumulated depreciation	(1,847)
Net Carrying Value	891	1,011
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	2,426
Accumulated depreciation	(695)
Net Carrying Value	$ 1,731	$ 1,864

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Property and Equipment, Net (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2017	May 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,597	$ 1,248

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Warrants (Details) - Warrant [Member]	3 Months Ended
	May 31, 2017 $ / shares shares
Number of Warrants
Beginning Balance | shares
Issued | shares	2,020,000
Ending Balance | shares	2,020,000
Weighted average exercise price
Beginning Balance | $ / shares
Issued | $ / shares	3.51
Ending Balance | $ / shares	$ 3.51

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Commitments and Contingencies (Details)	May 31, 2017 USD ($)
Commitments And Contingencies
2018	$ 12,776

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Commitments and Contingencies (Details Narrative)		1 Months Ended		3 Months Ended
	Jun. 03, 2016 $ / shares shares	Apr. 18, 2016 USD ($)	Jun. 01, 2015 $ / shares shares	May 28, 2017 USD ($)	May 28, 2017 ZAR (R)	May 28, 2016 USD ($)	May 28, 2016 ZAR (R)
Monthly base rate		$ 715
Operating leases commencement date		May 01, 2016
Exercise price (in dollars per share) | $ / shares	$ 3.50		$ 5.00
Number of warrants issued | shares	2,000,000		10,000
Warrants exercisable term (in years)	2 years		2 years
SOUTH AFRICA
Monthly base rate				$ 749		$ 681
Operating lease expense				$ 3,116		$ 1,768
Operating leases commencement date						Mar. 01, 2016	Mar. 01, 2016
SOUTH AFRICA | First Year [Member]
Monthly base rate | R							R 8,918
SOUTH AFRICA | Second Year [Member]
Monthly base rate | R					R 9,809
Restricted Stock [Member]
Number of shares issued for services (in shares) | shares	300,000

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Concentrations (Details)	3 Months Ended
	May 31, 2017	May 31, 2016
Sales Revenue, Net [Member] | Customer One [Member]
Percentage of concentration risk	37.00%
Sales Revenue, Net [Member] | Customer Two [Member]
Percentage of concentration risk	14.00%
Sales Revenue, Net [Member] | Customer Three [Member]
Percentage of concentration risk	13.00%
Accounts Receivable [Member] | Customer One [Member]
Percentage of concentration risk		26.00%
Accounts Receivable [Member] | Customer Two [Member]
Percentage of concentration risk		15.00%
Accounts Receivable [Member] | Customer Three [Member]
Percentage of concentration risk		10.00%

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Subsequent Events (Details Narrative)	Apr. 16, 2018 shares
Subsequent Event [Member] | Asset Purchase Agreement [Member] | Theme Studio [Member] | Twin Harbor Web Solutions [Member]
Number of shares issued	2,000,000