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Type 10-Q PREAXIA HEALTH CARE PAYM For: Feb 29


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly interval ended February
29, 2020

 

or

 

[  ] TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition interval from __________ to
______________

 

Fee File Quantity:  000-52365

 

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

 (Precise identify of registrant
as laid out in its constitution)

 

Nevada 20-4395271
(State or different jurisdiction of incorporation or group) (I.R.S. Employer Identification No.)

 

PO Field 34075 Westbrook PO, 1610-37th
Street S.W., Calgary, Alberta T3C 3W2

(Handle of principal government places of work) (Zip
Code)

 

(403) 850-4120

(Registrant’s phone quantity, together with
space code)

 

Securities registered pursuant to Part 12(b)
of the Act:

Title of every class Buying and selling Image(s) Title of every exchange on which registered
None None N/A

 

Securities registered pursuant to Part 12(g)
of the Act:

Frequent Inventory, $0.001 par value
(Title of sophistication)

 

Point out by verify mark whether or not the registrant (1) has filed all
stories required to be filed by Part 13 or 15(d) of the Securities Alternate Act of 1934 through the previous 12 months (or for
such shorter interval that the registrant was required to file such stories), and (2) has been topic to such submitting necessities
for the previous 90 days. Sure [X]  No [  ]

 

Point out by verify mark whether or not the registrant has submitted electronically
each Interactive Knowledge File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) throughout
the previous 12 months (or for such shorter interval that the registrant was required to submit such information).

Sure [X] No [ ]

 

Point out by verify mark whether or not the registrant
is a big accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting firm, or an rising progress
firm.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting firm,” and “emerging growth company” in Rule 12b-2 of the Alternate Act.

 

Giant accelerated filer [   ]   Accelerated filer [   ]
Non-accelerated filer [X]   Smaller reporting firm [X]
Rising progress firm [   ]      

 

If an rising progress firm, point out by
verify mark if the registrant has elected to not use the prolonged transition interval for complying with any new or revised monetary
accounting requirements supplied pursuant to Part 13(a) of the Alternate Act. [   ]

 

Point out by verify mark whether or not the registrant is a shell firm
(as outlined in Rule 12b-2 of the Alternate Act.)  Sure [  ]  No [X]

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Point out by verify mark whether or not the registrant
filed all paperwork and stories required to be filed by Part 12, 13 or 15(d) of the Securities Alternate Act of 1934 subsequent
to the distribution of securities beneath a plan confirmed by a courtroom.    

Sure [  ]  No [  ]

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Point out the variety of shares excellent of
every of the issuer’s courses of frequent stock, as of the newest practicable date.

 

As of June 2, 2020 the registrant had 19,767,698 excellent shares
of Frequent Inventory.

 

 

 

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 3
ITEM 1.   FINANCIAL STATEMENTS 3
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 4
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 11
ITEM 4. CONTROLS AND PROCEDURES 11
PART II – OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 1A. RISK FACTORS 12
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 12
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. MINE SAFETY DISCLOSURES 12
ITEM 5.  OTHER INFORMATION 12
ITEM 6.   EXHIBITS 12
SIGNATURES 13

 

 

 

 

 

 

 

 

 

 

 

 

EXPLANATORY NOTE

 

The Firm is submitting its Quarterly Report
on Type 10-Q for the 9 months ended February 29, 2020 after the April 14, 2020 deadline relevant to the Firm for the submitting
of a Type 10-Q in reliance on the 45-day extension supplied by an order issued by the SEC beneath Part 36 of the Alternate Act
dated March 4, 2020 (Launch No. 34-88318), as modified and outdated by a brand new SEC order issued on March 25, 2020 (Launch No.
34-88465) (collectively, the “COVID-19 Order”).

 

The Firm has been following the suggestions
of native well being authorities to attenuate publicity danger for its crew members for the previous a number of months, together with the non permanent
closures of its places of work and having crew members work remotely.  In consequence, the quarterly report was not be accomplished by
the submitting deadline, resulting from inadequate time to facilitate the inner and exterior evaluation course of. 

 

PART I – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

 

The accompanying unaudited condensed consolidated
monetary statements have been ready in accordance with U.S. typically accepted accounting rules for interim monetary
info and with the directions for Type 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they don’t
embody all the info and footnotes required by U.S. typically accepted accounting rules for full monetary statements.  In
the opinion of administration, all changes thought of vital for a good presentation have been included.  All such
changes are of a standard recurring nature.  Working outcomes for the 9 month interval ended February 29, 2020 are
not essentially indicative of the outcomes that may be anticipated for the fiscal 12 months ending May 31, 2020.  For additional
info consult with the consolidated monetary statements and footnotes thereto included in Preaxia’s Annual Report on Type
10-Okay for the 12 months ended May 31, 2019.

 

 

 

 

 

  Web page
   
Unaudited Condensed Consolidated Monetary Statements  
   
Unaudited Condensed Consolidated Steadiness Sheets as of February 29, 2020 and May 31, 2019 F-1
   
Unaudited Condensed Consolidated Statements of Operations and Complete Loss for the three and 9 months ended February 29, 2020 and February 28, 2019 F-2
   
Unaudited Condensed Consolidated Assertion of Stockholders’ Deficit for the three and 9 months ended February 29, 2020 and February 28, 2019 F-3
   
Unaudited Condensed Consolidated Statements of Money Flows for the 9 months ended February 29, 2020 and February 28, 2019 F-4
   
Notes to Unaudited Condensed Consolidated Monetary Statements F-5
   

 

 

 

 

 

 

 

 

PREAXIA
HEALTHCARE PAYMENT SYSTEMS INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                 
     

February 29,

2020

     

May 31,

2019

 
ASSETS                
                 
Present belongings                
Money   $ —       $ 17,939  
Whole present belongings     —         17,939  
                 
Whole belongings   $ —       $ 17,939  
                 
LIABILITIES                
                 
Present liabilities                
Accounts payable and accrued liabilities   $ 152,011     $ 134,436  
Accounts payable and accrued liabilities –
associated celebration
    279,121       239,121  
Advances – associated celebration     7,456       715  
Loans payable – shareholders     132,902       132,902  
Legal responsibility for unissued shares     126,967       126,967  
Convertible notice payable
– associated celebration
    1,058,760       1,058,760  
Whole present liabilities     1,757,217       1,692,901  
                 
Whole liabilities     1,757,217       1,692,901  
                 
Commitments and Contingencies     —         —    
                 
STOCKHOLDERS’ DEFICIT                
                 
Frequent Inventory, $0.001 par value, 75,000,000
shares of frequent stock approved
               
19,767,698 and 19,667,698 frequent shares issued
and excellent at February 29, 2020 and May 31, 2019, respectively
    19,768       19,668  
Extra paid-in capital     2,655,236       2,605,336  
Gathered different complete revenue     57,197       57,197  
Gathered deficit     (4,489,418 )     (4,357,163 )
Whole stockholders’ deficit     (1,757,217 )     (1,674,962 )
                 
Whole liabilities and stockholders’ deficit   $ —       $ 17,939  
                 
See Accompanying Notes to the Unaudited Condensed
Consolidated Monetary Statements

 

 

PREAXIA
HEALTHCARE PAYMENT SYSTEMS INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
                                 
     

Three
months ended

    9
months ended
 
     

February 29,

2020

     

February 28,

2019

     

February 29,

2020

     

February 28,

2019

 
                                 
Income   $ —       $ —       $ —       $ —    
                                 
Working bills                                
Consulting     33,815       33,814       93,815       95,726  
Skilled     4,608       3,084       17,092       13,208  
Workplace and administration     4,098       4,292       12,870       21,745  
Analysis and improvement     2,594       6,736       8,478       20,704  
Whole bills     45,115       47,926       132,255       151,383  
                                 
Loss from operations     (45,115 )     (47,926 )     (132,255 )     (151,383 )
                                 
Internet loss and complete loss   $ (45,115 )   $ (47,926 )   $ (132,255 )   $ (151,383 )
                                 
Internet loss per share – fundamental and diluted   $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.01 )
                                 
Weighted common variety of frequent shares
excellent – fundamental and diluted
    19,767,698       19,667,698       19,712,589       19,667,698  
                                 
See Accompanying Notes to the Unaudited Condensed Consolidated Monetary Statements

PREAXIA
HEALTHCARE PAYMENT SYSTEMS INC.
CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)
      Frequent Inventory                                  
      Shares       Quantity       Extra
Paid-in Capital
      Gathered
Different Complete Revenue
      Gathered
Deficit
      Whole
Stockholders’ Deficit
 
Steadiness, November 30, 2018     19,667,698     $ 19,668     $ 2,682,303     $ 57,197     $ (4,262,821 )   $ (1,503,653 )
                                                 
Internet loss and complete loss     —         —         —         —         (47,926 )     (47,926 )
                                                 
Steadiness, February 28, 2019     19,667,698     $ 19,668     $ 2,682,303     $ 57,197     $ (4,310,747 )   $ (1,551,579 )
                                                 
      Frequent Inventory                                  
      Shares       Quantity       Extra
Paid-in Capital
      Gathered
Different Complete Revenue
      Gathered
Deficit
      Whole
Stockholders’ Deficit
 
Steadiness, May 31, 2018     19,667,698     $ 19,668     $ 2,682,303     $ 57,197     $ (4,159,364 )   $ (1,400,196 )
                                                 
Internet loss and complete loss     —         —         —         —         (151,383 )     (151,383 )
                                                 
Steadiness, February 28, 2019     19,667,698     $ 19,668     $ 2,682,303     $ 57,197     $ (4,310,747 )   $ (1,551,579 )

 

 

      Frequent
Inventory
                               
      Shares       Quantity       Extra
Paid-in Capital
      Gathered
Different Complete Revenue
      Gathered
Deficit
      Whole
Stockholders’ Deficit
 
Steadiness, May 31, 2019     19,667,698     $ 19,668     $ 2,605,336     $ 57,197     $ (4,357,163 )   $ (1,674,962 )
                                                 
Issuance of shares to settle accounts payable
and accrued liabilities – associated celebration
    100,000       100       49,900                       50,000  
Internet loss and complete loss     —         —         —         —         (132,255 )     (132,255 )
                                                 
Steadiness, February 29, 2020     19,767,698     $ 19,768     $ 2,655,236     $ 57,197     $ (4,489,418 )   $ (1,757,217 )
                                                 
      Frequent
Inventory
                                 
      Shares       Quantity       Extra
Paid-in Capital
      Gathered
Different Complete Revenue
      Gathered
Deficit
      Whole
Stockholders’ Deficit
 
Steadiness, November 30, 2019     19,667,698     $ 19,668     $ 2,605,336     $ 57,197     $ (4,444,303 )   $ (1,762,102 )
                                                 
Issuance of shares to settle accounts payable
and accrued liabilities – associated celebration
    100,000       100       49,900                       50,000  
Internet loss and complete loss     —         —         —         —         (45,115 )     (45,115 )
                                                 
Steadiness, February 29, 2020     19,767,698     $ 19,768     $ 2,655,236     $ 57,197     $ (4,489,418 )   $ (1,757,217 )

 

See Accompanying Notes to the Unaudited Condensed Consolidated Monetary Statements

 

PREAXIA
HEALTHCARE PAYMENT SYSTEMS INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                 
      9 months ended  
     

February
29,

2020

     

February
28,

2019

 
Money flows from working actions                
Internet loss   $ (132,255 )   $ (151,383 )
 Change in working belongings and liabilities                
Improve in accounts payable and accrued liabilities
– associated celebration
    90,000       90,000  
Improve (lower) in
accounts payable and accrued liabilities
    17,575       (5,500 )
Money flows utilized in working
actions
    (24,680 )     (66,883 )
                 
Money flows from investing actions     —         —    
                 
Money stream from financing actions                
Advances – associated celebration     15,328       24,471  
Reimbursement of advances – associated celebration     (8,587 )     (16,782 )
Proceeds from loans payable
– shareholder
    —         51,777  
Internet cash supplied by financing
actions
    6,741       59,466  
                 
Internet change in cash     (17,939 )     (7,417 )
                 
Money, starting of the interval     17,939       7,608  
                 
Money, finish of the interval   $ —       $ 191  
                 
Supplemental Disclosure:                
Money paid for revenue
taxes
  $ —       $ —    
Money paid for curiosity   $ —       $ —    
                 
Non-cash investing and financing actions                
Subject shares to settle
accounts payable and accrued liabilities – associated celebration
  $ 50,000     $ —    
                 
See Accompanying Notes to the Unaudited Condensed
Consolidated Monetary Statements

 

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PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

9 Months Ended February 29, 2020

 

Notice 1 – Group and Description
of Enterprise

 

PreAxia Well being Care Cost Techniques
Inc. (the “Company” or “PreAxia”) was included on April 3, 2000 within the State of Nevada. On May 31,
2005 the Firm acquired all the excellent stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for five,000,000
shares of the frequent stock of the Firm with a par value of $0.001. The Firm had no operations previous to the date of the aforementioned
acquisition.

The enterprise goal of the Firm
is the event, distribution, advertising and sale of well being care cost processing providers and merchandise.

The Firm has not but realized any
revenues from its deliberate operations. 

The operations of the Firm are anticipated
to be primarily undertaken by PreAxia Well being Care Cost Ltd. (“PreAxia Payment”), included pursuant to the legal guidelines
of the Province of Alberta on November 26, 2015.

 

PreAxia Cost is within the means of creating
a web-based entry system making a well being spending account that may facilitate card cost and processing providers to third-party
directors, insurance coverage firms and others.

 

Notice 2 – Abstract of Vital Accounting
Insurance policies

 

Foundation of presentation

 

The unaudited condensed consolidated monetary
statements of the Firm for the 9 months ended February 29, 2020 and February 28, 2019 have been ready in accordance with
accounting rules typically accepted in the US of America for interim monetary info and pursuant to the
necessities for reporting on Type 10-Q and Regulation S-Okay. Accordingly, they don’t embody all the data and footnotes
required by accounting rules typically accepted in the US of America for full monetary statements. Nevertheless,
such info displays all changes (consisting solely of regular recurring changes), that are, within the opinion of administration,
vital for the truthful presentation of the monetary place and the outcomes of operations. Outcomes proven for interim durations
aren’t essentially indicative of the outcomes to be obtained for a full fiscal 12 months. The steadiness sheet info as of May 31,
2019 was derived from the audited monetary statements included within the Firm’s monetary statements as of and for the fiscal
12 months ended May 31, 2019 included within the Firm’s Annual Report on Type 10-Okay filed with the Securities and Alternate Fee
(the “SEC”) on August 27, 2019. These monetary statements needs to be learn along with that report.

 

 Ideas of Consolidation

 

The consolidated monetary statements
embody the accounts of the Firm and its wholly-owned subsidiaries (i) PreAxia Well being Care Cost Techniques Inc., included
pursuant to the legal guidelines of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., included pursuant to the legal guidelines
of the Province of Alberta on January 28, 2008 and (iii) PreAxia Well being Care Cost Ltd., included pursuant to the legal guidelines of
the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions
have been eradicated in consolidation.

Going Concern

 

The accompanying consolidated monetary
statements have been ready assuming the Firm will proceed as a going concern, which contemplates the conclusion of
belongings and satisfaction of liabilities within the regular course of enterprise. Through the 9 months ended February 29, 2020, the
Firm incurred a web lack of $132,255 and used cash in working actions of $24,680, and at February 29, 2020, had a
stockholders’ deficit of $1,757,217. These components, amongst others, increase substantial doubt in regards to the Firm’s
capability to proceed as a going concern inside one 12 months of the date that the consolidated monetary statements are issued. The
Firm’s consolidated monetary statements don’t embody any changes which may consequence from the result of this
uncertainty ought to we be unable to proceed as a going concern.

 

The Firm’s capability to proceed as
a going concern relies upon its capability to develop extra sources of capital and to in the end obtain worthwhile operations.
At the moment, the Firm doesn’t have vital cash or different materials belongings, nor does it have operations or a income
adequate to cowl its working prices and permit it to proceed as a going concern. The Firm’s officers or principal
shareholders have dedicated to creating advances or loans to pay for sure authorized, accounting, and administrative prices.

 

The Firm hopes to have the ability to entice appropriate
buyers for our marketing strategy, which won’t require us to make use of our cash. There may be no assurance that the Firm will probably be
profitable on this scenario. The Firm is unable to foretell the impact, if any, that the coronavirus COVID-19 international pandemic
may have on its entry to the financing markets. Even when the Firm is ready to receive extra financing, it may comprise undue
restrictions on our operations, within the case of debt financing or trigger substantial dilution for our stockholders, within the case of
fairness financing.

 

Money and Money Equivalents

 

The Firm considers all extremely liquid
debt devices with an authentic maturity of three months or much less to be cash equivalents.

Use of Estimates

 

The preparation of the Firm’s consolidated
monetary statements in conformity with accounting rules typically accepted in the US requires administration to make
estimates and assumptions that have an effect on the quantities reported in these consolidated monetary statements and accompanying notes. Though
these estimates are based mostly on administration’s information of present occasions and actions that our firm may undertake sooner or later,
precise outcomes may differ from these estimates.

Overseas Forex Translation

 

The purposeful foreign money of the Firm
is the US greenback. The purposeful foreign money of the Subsidiaries is the Canadian greenback. Property and liabilities within the
accompanying consolidated monetary statements are translated into United States {dollars} on the exchange price in impact on the
steadiness sheet date and capital accounts are translated at historic charges. Revenue assertion accounts are translated on the common
charges of exchange prevailing through the interval. Translation changes arising from the usage of differing exchange charges from interval
to interval are included within the gathered different complete revenue (loss) account in stockholders’ deficit.

Transactions undertaken in currencies
aside from the purposeful foreign money of the entity are translated utilizing the exchange price in impact as of the transaction date. Transaction
exchange beneficial properties and losses for the 9 months ended February 29, 2020 and February 28, 2019 have been nominal and included within the assertion
of operations and complete loss.

The Firm’s reporting foreign money is
the U.S. greenback. All transactions initiated in Canadian {Dollars} are translated into U.S. {dollars} in accordance with Accounting
Requirements Codification (“ASC”) 830-30, “Translation of Monetary Statements,” as follows: 

i)       belongings
and liabilities are translated on the closing price on the date of the steadiness sheet of 1.00 US Greenback=1.33401 Canadian {Dollars}
(February 29, 2020), 1.00 USD Greenback=0.7805 GBP, and 1.00 US Greenback = 1.3077 Canadian {Dollars} (May 31, 2019);

ii)       revenue
and bills are translated at common exchange charges for 9 months ended February 29, 2020 of 1.00 US Greenback = 1.3207 Canadian
{Dollars} and 1.00 US Greenback = 1.3098 Canadian {Dollars} (February 28, 2019);

iii)       all
ensuing exchange variations are acknowledged as different complete revenue, a separate element of fairness. The exchange variations
through the 9 months ended February 29, 2020 and February 28, 2019 have been insignificant and no quantities have been recorded.

Truthful Worth of Monetary Devices

 

The Firm defines truthful value because the
exchange price that may be acquired for an asset or paid to switch a legal responsibility (an exit price) within the principal or most advantageous
marketplace for the asset or legal responsibility in an orderly transaction between market members on the measurement date. Administration makes use of
a good value hierarchy that distinguishes between (1) market participant assumptions developed based mostly on market information obtained
from unbiased sources (observable inputs) and (2) an entity’s personal assumptions about market participant assumptions
developed based mostly on one of the best info obtainable within the circumstances (unobservable inputs). The truthful value hierarchy consists
of three broad ranges, which provides the best precedence to unadjusted quoted costs in energetic markets for equivalent belongings or liabilities
(Degree 1) and the bottom precedence to unobservable inputs (Degree 3). The three ranges of the truthful value hierarchy are described
under:

  Degree 1 – Unadjusted quoted costs in energetic markets which can be accessible on the measurement date for equivalent, unrestricted belongings or liabilities.

 

  Degree 2 – Inputs aside from quoted costs included inside Degree 1 which can be observable for the asset or legal responsibility, both instantly or not directly, together with quoted costs for related belongings or liabilities in energetic markets; quoted costs for equivalent or related belongings or liabilities in markets that aren’t energetic; inputs aside from quoted costs which can be observable for the asset or legal responsibility (e.g., rates of interest); and inputs which can be derived principally from or corroborated by observable market information by correlation or different means.

 

  Degree 3 – Inputs which can be each vital to the truthful value measurement and unobservable.

 

Truthful value estimates mentioned herein are based mostly
upon sure market assumptions and pertinent info obtainable to administration as of February 29, 2020 and May 31, 2019. The
carrying quantities of present belongings and present liabilities approximate their truthful value due to the comparatively quick interval
of time between the origination of those devices and their anticipated realization.

 

Internet Revenue (Loss) Per Share

 

Internet revenue (loss) per share of frequent stock
is computed by dividing the web loss by the weighted common variety of frequent shares excellent through the interval. The Firm
has 10,587,600 shares of potential frequent stock equivalents for convertible notice payable – associated celebration excellent throughout
the 9 months ended February 29, 2020 and February 28, 2019, which have been excluded from the loss per share computation as
their impact would have been anti-dilutive.

 

Analysis and Growth Prices

 

Through the 9 months ended February
29, 2020 and February 28, 2019, we expended $8,478 and $20,704 on analysis and improvement.

Software program Growth Prices

The Firm accounts for software program improvement
prices in accordance with a number of accounting pronouncements, together with FASB ASC 730, Analysis and Growth, FASB ASC 350-40,
Inside-Use Software program, FASB 985-20, Prices of Laptop Software program to be Bought, Leased, or Marketed and FASB ASC 350-50, Web site Growth
Prices.

Prices incurred through the interval of
planning and design, previous to the interval figuring out technological feasibility, for all software program developed to be used inner and
exterior, has been charged to operations within the interval incurred as analysis and improvement prices.  Moreover, prices incurred
after dedication of readiness for market have been expensed as analysis and improvement.

The Firm will capitalize sure
prices within the improvement of our proprietary software program (laptop software program to be offered, leased or licensed) for the interval after technological
feasibility was decided and previous to our advertising and preliminary gross sales.

Web site improvement prices are capitalized
beneath the identical standards as our marketed software program.  

Impairment of Lengthy-lived Property

Lengthy-lived belongings similar to property,
gear and identifiable intangibles are reviewed for impairment each time details and circumstances point out that the carrying
value may not be recoverable.  When required, impairment losses on belongings to be held and used are acknowledged based mostly on
the truthful value of the asset.  The truthful value is set based mostly on estimates of future cash flows, market value of comparable
belongings, if obtainable, or unbiased value determinations, if required.  If the carrying quantity of the long-lived asset is just not
recoverable from its undiscounted cash flows, an impairment loss is acknowledged for the distinction between the carrying quantity and
truthful value of the asset.  When truthful values aren’t obtainable, the Firm estimates truthful value utilizing the anticipated future
cash flows discounted at a price commensurate with the chance related to the restoration of the belongings.  We didn’t acknowledge
any impairment losses for any durations offered.

Commitments and Contingencies

 

The Firm follows subtopic 450-20 of the
FASB Accounting Requirements Codification to report accounting for contingencies.  Liabilities for loss contingencies arising
from claims, assessments, litigation, fines and penalties and different sources are recorded when it’s possible {that a} legal responsibility has
been incurred and the quantity of the evaluation may be moderately estimated.

 

Income Recognition

 

In accordance with ASC 606, income is acknowledged
when a buyer obtains management of promised items or providers. The quantity of income acknowledged displays the consideration to which
we anticipate to be entitled to obtain in exchange for these items or providers. The provisions of ASC 606 embody a five-step course of
by which we decide income recognition, depicting the switch of products or providers to clients in quantities reflecting the cost
to which we anticipate to be entitled in exchange for these items or providers. ASC 606 requires us to use the next steps: (1)
determine the contract with the shopper; (2) determine the efficiency obligations within the contract; (3) decide the transaction
price; (4) allocate the transaction price to the efficiency obligations within the contract; and (5) acknowledge income when, or as,
we fulfill the efficiency obligation.

 

Revenue Taxes

 

The Firm follows Part 740-10-30 of the
FASB Accounting Requirements Codification, which requires recognition of deferred tax belongings and liabilities for the anticipated future
tax penalties of occasions which have been included within the monetary statements or tax returns.  Below this technique, deferred
tax belongings and liabilities are based mostly on the variations between the monetary assertion and tax bases of belongings and liabilities
utilizing enacted tax charges in impact for the fiscal 12 months through which the variations are anticipated to reverse.  Deferred tax belongings
are diminished by a valuation allowance to the extent administration concludes it’s extra possible than not that the belongings won’t be
realized.  Deferred tax belongings and liabilities are measured utilizing enacted tax charges anticipated to use to taxable revenue in
the fiscal years through which these non permanent variations are anticipated to be recovered or settled.  The impact on deferred tax
belongings and liabilities of a change in tax charges is acknowledged within the Statements of Revenue and Complete Revenue within the interval
that features the enactment date.

 

The Firm adopted part 740-10-25 of the
FASB Accounting Requirements Codification (“Section 740-10-25”) close to unsure revenue tax positions.  Part
740-10-25 addresses the dedication of whether or not tax advantages claimed or anticipated to be claimed on a tax return needs to be recorded
within the monetary statements. Below Part 740-10-25, the Firm may acknowledge the tax profit from an unsure tax place
solely whether it is extra possible than not that the tax place will probably be sustained on examination by the taxing authorities, based mostly on the
technical deserves of the place.  The tax advantages acknowledged within the monetary statements from such a place needs to be
measured based mostly on the biggest profit that has a better than fifty % (50%) probability of being realized upon final settlement.
Part 740-10-25 additionally offers steering on de-recognition, classification, curiosity and penalties on revenue taxes, accounting
in interim durations and requires elevated disclosures.  The Firm had no materials changes to its liabilities for unrecognized
revenue tax advantages in line with the provisions of Part 740-10-25.

  

Notice 3 – Latest Accounting Pronouncements

 

The Firm evaluations new accounting
requirements as issued or up to date. No new requirements or updates had any materials impact on these consolidated monetary statements.
The accounting pronouncements issued subsequent to the date of those consolidated monetary statements that have been thought of vital
by administration have been evaluated for the potential impact on these consolidated monetary statements. Administration doesn’t consider
any of the following pronouncements could have a cloth impact on these consolidated monetary statements as offered.

 

Notice 4 Associated Social gathering Transactions

 

Accounts Payable and Accrued Liabilities
– Associated Events

 

Through the 9 months ended February 29, 2020
and February 28, 2019, Tom Zapatinas, the Chief Government Officer and Director of the Firm, earned $90,000 and $90,000, respectively,
for consulting providers supplied to the Firm. Accounts payable and accrued liabilities – associated celebration resulting from Tom Zapatinas
totaled $279,121 and $239,121 at February 29, 2020 and May 31, 2019, respectively.

 

On October 29, 2019, the Firm issued 100,000
shares of frequent stock of the Firm to settle accounts payable and accrued liabilities– associated celebration with a carrying value
of $50,000.

 

Advances – Associated Social gathering

 

Through the 9 months ended February 29, 2020
and February 28, 2019, Tom Zapatinas, the Chief Government Officer and a Director of the Firm, superior the Firm $15,328 and
$24,471, respectively, in cash and was repaid $8,587 and $16,782, respectively. Advances payable resulting from Tom Zapatinas totaled $7,456
and $715 at February 29, 2020 and May 31, 2019, respectively.

 

Loans Payable – Shareholders

 

As of February 29, 2020 and May 31, 2019, loans
payable – shareholders are $132,902 and $132,902, respectively. Loans payable – shareholders are unsecured, non-interest
bearing and due on demand. Through the 9 months ended February 29, 2020 and February 28, 2019, there have been no advances or repayments
associated to loans payable – shareholders.

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Convertible Notice Payable – Associated
Social gathering

 

As of February 29, 2020 and May 31, 2019, convertible
notice payable – associated celebration of $1,058,760 is because of Tom Zapatinas, the Chief Government Officer and a Director of the Firm.
The Notice is non-interest bearing, unsecured, payable on demand and convertible in entire or partially into shares of frequent stock
of the Firm at a conversion price of $0.10 per share, which equates to 10,587,600 shares.

 

Notice 5 – Stockholders’ Deficit

 

Frequent Inventory

 

Frequent Inventory, par value of $0.001 per share;
75,000,000 shares approved: 19,767,698 and 19,667,698 shares issued and excellent at February 29, 2020 and May 31, 2019, respectively.
Holders of Frequent Inventory have one vote per share of Frequent Inventory held.

 

On October 29, 2019, the Firm issued 100,000
shares of frequent stock of the Firm to settle accounts payable and accrued liabilities– associated celebration with a carrying value
of $50,000.

 

Notice 6 – Contingencies
and Commitments

Sometimes the Firm may be a celebration
to litigation issues involving claims towards the Firm.  Administration believes that there aren’t any present issues that may
have a cloth impact on the Firm’s monetary place or outcomes of operations. 

 

The Firm doesn’t have long-term commitments
for gear purchases or leases. The Firm doesn’t lease workplace house because the CEO operates the enterprise from his private residence.

 

Notice 7 – Subsequent Occasions

 

COVID-19

 

The current outbreak of the coronavirus COVID-19
has unfold throughout the globe and is impacting worldwide financial exercise. Circumstances surrounding the coronavirus proceed to quickly
evolve and authorities authorities have carried out emergency measures to mitigate the unfold of the virus. The outbreak and the
associated mitigation measures have had and can proceed to have a cloth adversarial affect on international financial circumstances as properly
as on the Firm’s enterprise actions. The extent to which COVID-19 may affect the Firm’s enterprise actions will rely
on future developments, similar to the last word geographic unfold of the illness, the length of the outbreak, journey restrictions,
enterprise disruptions, and the effectiveness of actions taken within the Canada, United States and different nations to comprise and deal with
the illness. These occasions are extremely unsure and, as such, the Firm can not decide their monetary affect right now.
No changes have been made to the quantities reported in these condensed consolidated monetary statements on account of this
matter.

 

The Firm has evaluated all subsequent occasions
via the date these monetary statements have been issued and no extra subsequent occasions occurred that required disclosure.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ITEM 2.  MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This quarterly report comprises forward-looking
statements referring to future occasions or our future monetary efficiency.  In some instances, you possibly can determine forward-looking
statements by terminology similar to “may,” “should,” “intends,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential,” or
“continue” or the adverse of those phrases or different comparable terminology.  These statements are solely predictions
and contain recognized and unknown dangers, uncertainties and different components which may trigger our or our trade’s precise outcomes, ranges
of exercise or efficiency to be materially completely different from any future outcomes, ranges of exercise or efficiency expressed or implied
by these forward-looking statements.

 

Such components embody, amongst others, the next:
worldwide, nationwide and native basic financial and market circumstances; demographic modifications; the power of PreAxia to maintain,
handle or forecast its progress; the power of PreAxia to efficiently make and combine acquisitions; uncooked materials prices
and availability; new product improvement and introduction; present authorities rules and modifications in, or failure to conform
with authorities rules; adversarial publicity; competitors; the lack of vital clients or suppliers; fluctuations and problem
in forecasting working outcomes; modifications in enterprise technique or improvement plans; enterprise disruptions; the power to draw
and retain certified personnel; the power to guard expertise; and different components referenced on this and former filings.

 

Though we consider that the expectations mirrored
within the forward-looking statements are affordable, we can not assure future outcomes, ranges of exercise or efficiency.  Besides
as required by relevant legislation, together with the securities legal guidelines of the US, we don’t intend to replace any of the forward-looking
statements to evolve these statements to precise outcomes.

 

Given these uncertainties, readers of this
Type 10-Q and buyers are cautioned to not place undue reliance on such forward-looking statements.  PreAxia disclaims
any obligation to replace any such components or to publicly announce the results of any revisions to any of the forward-looking statements
contained herein to replicate future occasions or developments, besides as required by relevant legislation, together with the securities legal guidelines
of the US.

 

All quantities acknowledged herein are in US {dollars}
except in any other case indicated.

 

The administration’s dialogue and
evaluation of our monetary situation and outcomes of operations are based mostly upon our condensed consolidated monetary statements,
which have been ready in accordance with accounting rules typically accepted in the US of America
(“GAAP”).  The next dialogue of our monetary situation and outcomes of operations needs to be learn
along with our audited consolidated monetary statements for the 12 months ended May 31, 2019, along with notes
thereto.  As used on this quarterly report, the phrases “we,” “us,” “our,”
“PreAxia” and the “Company” means PreAxia Well being Care Cost Techniques Inc. and its wholly-owned
subsidiaries, except the context clearly requires in any other case.

  

Normal Overview

 

Company Overview

PreAxia Well being Care Cost Techniques
Inc. (the “Company” or “PreAxia”) was included on April 3, 2000 within the State of Nevada.

The Firm primarily undertakes its
operations via its wholly-owned subsidiary, PreAxia Well being Care Cost Restricted (“PreAxia Payment”). PreAxia Cost
was included pursuant to the legal guidelines of the Province of Alberta on November 26, 2015.

Normal Overview

 

PreAxia Cost is an organization which intends
to ship a complete suite of options and providers directed on the rising well being cost market, particularly the alternatives
tied to the expansion of well being spending accounts (“HSA”). There’s a fast shift in healthcare conventional cost models
to consumer-directed healthcare that’s creating vital alternatives for monetary providers and insurance coverage industries to ship
new dynamic merchandise to this rising market.

Spawned by the necessity to tackle escalating
well being care prices, modifications within the regulatory surroundings and the rising client want for better participation within the administration
of their well being advantages, the boundaries between well being care and the monetary providers industries have gotten more and more blurred.
With the development in direction of self-directed well being cost options and the rising demand for sooner, simpler and extra handy profit
providers, the insurance coverage and advantages industries are banking on HSA medical funds being their subsequent huge progress conduit. Research
recommend that HSAs within the US reached $61.7 billion in belongings and 26.Zero million shoppers in 2019, a rise of 20% of belongings over
the prior interval. The Canadian marketplace for well being advantages is estimated at greater than $30 Billion of which HSAs are estimated to
have achieve a 10% share. This coupled with the continued progress of the Canadian group insurance coverage trade illustrates the rising
alternative for progressive well being cost providers. We intend to initially launch our merchandise in Canada. We consider that Canadian
companies are embracing a brand new healthcare financing car to offer better value to staff, enhance profitability and get
extra return from their funding. We intend to offer them with providers to seize this market alternative.

Description of Well being Spending Account
(“HSA”)

An HSA is a uniquely designed account established
completely and particularly for the aim of well being care spending. An employer deposits funds right into a particular account for the
worker. These funds can be utilized to pay for eligible medical and associated well being care bills for the worker and their dependents.
HSAs present employers and staff with better management in each the quantity of funds invested and the way these funds are used.

 

Companies and infrastructure supplied by PreAxia
allow organizations and people to remove all paper concerned within the administration of those accounts and profit via financial savings
in money and time.

 

The PreAxia platform for processing and managing
accounts, together with cardholder and buyer account administration, reconciliation and monetary settlement, and buyer reporting
is absolutely operational.

 

Over time, the Firm will consider
alternatives for types of digital banking and PayPal-type providers. One alternative seen as notably related to the
well being care market is to supply immediate issuing providers that allow companies to difficulty and fund Pre-Paid Interac or credit score
card providers to beneficiaries in actual time. If carried out, the beneficiary will most definitely choose a private
identification quantity (“PIN”) utilizing a PIN and card activation terminal, thus gaining immediate entry to funds that
may be reloaded. This consideration would require improvement of software program techniques for the issuing of well being cost playing cards and
monetary transaction processing providers that may be absolutely managed by an information heart.

 

Matching of shoppers in want of well being
care services or products with suppliers is one other space PreAxia intends to judge. Customers managing their well being care {dollars}
via a web-based system will discover comfort in looking for out well being care professionals and providers via the identical system.

Distribution Strategies and Advertising
Technique

PreAxia operates on a Cloud Computing
Platform that makes it accessible to anybody with a private laptop and Web entry. The preliminary marketplace for PreAxia’s
HSA Administration Resolution is small and medium sized firms that aren’t at present properly served by the present group advantages model.
The monetary advantages of the PreAxia enterprise model, nonetheless, are additionally related to bigger employers and we consider that these
bigger employers will migrate to the PreAxia product over time.

PreAxia’s advertising technique is
to advertise its present platform direct to shoppers and companies, and to the teams that almost all want entry to it; unbiased
brokers, monetary advisors and small to medium sized companies. Brokers ought to see PreAxia as a superior technique of selling
and supporting HSAs that enable them to earn above common fee charges on invested funds. Monetary advisors ought to see PreAxia
in the same approach as brokers besides that there’s the extra good thing about tax discount. Small to medium sized companies, which
are anticipated to drive the expansion in enterprise, ought to see PreAxia as providing monetary financial savings to the corporate and to staff
by providing private well being care advantages via an HSA, together with the identical conveniences they’ve come to anticipate from different
providers they at present make the most of over the Web. It’s anticipated that the group advantages market will subsequently observe as they
too understand some great benefits of PreAxia over their present HSA choices. PreAxia has begun and can proceed to hunt alternatives
with lead clients and alliance companions to determine reference-able, high-profile implementations and market-leading, early-adopter
companies for additional creating progressive services. The Firm intends to design options focused in direction of company
monetary administration, monetary danger, audit administration and cash administration whereas focusing on product/service administration as a assist
to monetary administration.

We anticipate that the prime goal
for providers will probably be small to medium sized organizations that aren’t adequately served by the present insurance coverage and group advantages
choices. These organizations ought to understand vital advantages in each price and time financial savings by utilization of PreAxia expertise
whereas offering their staff with an elevated degree of advantages.

PreAxia intends to attain service quantity
and the related economies of scale via advertising instantly to pick out goal clients that present the required transaction
volumes, via market particular channel companions and thru an training based mostly public relations technique geared to the small
to mid-sized employers together with the brokers and monetary advisors utilized by these companies. The channel technique is supported
within the resolution design, as a number of channel companions may require customized pricing and compensation.

It’s our Firm’s intention
that brokers and monetary advisors will aggressively promote their PreAxia supported HSA choices because of the high quality of product,
larger margins and due to the non-competitive relationship with PreAxia.

PreAxia has recognized the next
“channels” via which it can goal prime finish market clients:

  Unbiased brokers that promote, or want to promote, Well being Spending Accounts

 

  Monetary advisors who handle funds and advise on tax saving methods for people and companies

 

  Accountants and bookkeepers who frequently advise companies on monetary and operational issues

 

  Advantages managers/adjudicators, together with insurance coverage, well being or outsourced authorities advantages processors that handle advantages disbursement

 

  Issuer banks, together with associate banks that allow the issuance of Well being Playing cards and/or promote insurance coverage merchandise

 

  Software suppliers, together with software program producers promoting into the goal vertical markets

 

  Skilled providers, together with consulting, improvement and implementation firms serving the goal vertical markets

PreAxia intends to determine a number of key buyer
reference accounts, channel advertising companions and expertise alliances. These company relationships are related to advancing
our firm’s targets in 2020 and past for attaining a main place within the Canadian market and establishing a stable
service basis.

Aggressive Enterprise Circumstances and
our Firm’s Aggressive Place within the Trade and Strategies of Competitors

PreAxia intends to supply a mixture of merchandise
and providers in its resolution. Nevertheless, there are different suppliers of parts or variations of the Well being Spending Accounts within the
market. Our strategy is to offer a excessive value added and sturdy functionality inside particular goal markets, slightly than the
“one size fits all” and mass quantity strategy of the bigger firms within the Canadian and worldwide market. This
is in keeping with the PreAxia platform which has been designed for growth in the US and internationally. The next
are a few of the main suppliers of services which can be or may be potential rivals in PreAxia’s goal markets:

 

· Benecaid has turn out to be a number one supplier of Well being Spending Accounts in Canada by providing a simple
to know product via brokers and likewise instantly via the corporate.

 

· Olympia Advantages has turn out to be a number one supplier of Well being Spending Accounts in Canada by providing
a “Cost Plus” model of HSAs that has turn out to be well-liked within the market.

 

· QuickCard is a supplier of Well being Spending Accounts and group insurance coverage merchandise. They’re partially
differentiated from rivals by advantage of a “credit type card” that’s used to pay for certified well being merchandise
and providers.

 

· League, which operates in Canada and the US, gives a spread of well being profit providers together with
Well being Spending Accounts.

 

· Most main insurance coverage firms provide some model of HSAs to their clients.

 

· Many brokers have created HSA merchandise for his or her purchasers.

 

· Many accounting and monetary providers companies have created their very own HSA merchandise to supply to
their purchasers.

 

US and Worldwide Markets

 

· HealthEquity, a publicly listed firm providing HSAs within the USA, manages over $1.7 billion in
deposits. It is among the largest devoted well being account custodians within the USA and serves greater than 1.Four million accounts owned
by people at greater than 24,000 firms throughout the nation.

 

· HSA Bank, a division of Webster Bank, gives Well being Spending Accounts and associated choices to
the consumer-directed healthcare trade.

 

· Constancy Investments gives a Well being Spending Account to companies as a method of controlling
prices whereas offering worker well being advantages.

 

Mental Property and Patent Safety

 

At current, PreAxia doesn’t have any pending
or registered patents or any emblems.

 

Plan of Operation

Over the subsequent twelve months, we plan
to:

 

  (a) Elevate extra capital to execute our enterprise plans;
     
  (b) Penetrate the well being care processing markets in Canada, the US and worldwide, by persevering with to develop progressive well being care processing services;
     
  (c) Construct up a community of strategic alliances with a number of forms of medical insurance firms, governments and different alliances in numerous vertical markets, and;
     
  (d) Fill the positions of senior administration gross sales, administrative and engineering positions.

 

 

 Liquidity and Capital Assets

 

As of February 29, 2020, PreAxia’s cash
steadiness was $Zero in comparison with $17,939 as of May 31, 2019.  Our Firm will probably be required to lift capital to fund our operations.  PreAxia’s
cash readily available is at present its solely supply of liquidity.  PreAxia had a working capital deficit of $1,757,217 as of February
29, 2020 in contrast with a working capital deficit of $1,674,962 as of May 31, 2019.  

 

Our capability to satisfy our monetary liabilities
and commitments is primarily dependent upon the continued issuance of fairness to new stockholders and our capability to attain and
keep worthwhile operations.  PreAxia’s cash and cash equivalents won’t be adequate to satisfy its working capital
necessities for the subsequent twelve-month interval.   We won’t initially have any cash stream from working actions
as we’re within the startup stage.   We undertaking that we are going to require an estimated $3,150,000 over the subsequent twelve-month
interval to fund our working capital deficit of roughly $1,700,000 plus an extra $1,450,000 to finish our marketing strategy. The
Firm plans to lift the capital required to fulfill our fast short-term wants and extra capital required to satisfy our
estimated funding necessities for the subsequent twelve months primarily via the non-public placement of our fairness securities or by
approach of loans or such different means as PreAxia may decide.  

 

There aren’t any assurances that we are going to give you the option
to acquire funds required for our continued operations.  There may be no assurance that extra financing will probably be obtainable
to us when wanted or, if obtainable, that it may be obtained on commercially affordable phrases.  If we’re not in a position to
receive the extra financing on a well timed foundation, we will be unable to satisfy our different obligations as they turn out to be due and we
will probably be compelled to scale down or even perhaps stop the operation of our enterprise.

 

There may be substantial doubt about our capability
to proceed as a going concern because the continuation of our enterprise relies upon acquiring additional long-term financing, profitable
and adequate market acceptance of our merchandise and attaining a worthwhile degree of operations.  The Firm hopes to
have the ability to entice appropriate buyers for our marketing strategy, which won’t require us to make use of our cash. There may be no assurance
that the Firm will probably be profitable on this scenario. The Firm is unable to foretell the impact, if any, that the coronavirus
COVID-19 international pandemic may have on its entry to the financing markets. The issuance of extra fairness securities by us may
end in a big dilution within the fairness pursuits of our present stockholders.  Acquiring industrial loans, assuming
these loans could be obtainable, will enhance our liabilities and future cash commitments.

 

Our working capital (deficit) as of February
29, 2020 in comparison with May 31, 2019 is summarized as follows:

 

Working Capital

   

February 29,

2020

 

May 31,

2019

         
Present Property   $ —       $ 17,939  
Present Liabilities     (1,757,217 )     (1,692,901 )
Working Capital (deficit)   $ (1,757,217 )   $ (1,674,962 )

 

The rise in our working capital deficit
of $82,255 was primarily resulting from a rise in our accounts payable – associated celebration and a rise in accounts payable and accrued
liabilities.

 

Off-Steadiness Sheet Preparations

 

We now have no off-balance sheet preparations that
have or are moderately prone to have a present or future impact on our monetary situation, modifications in monetary situation, revenues
or bills, outcomes of operations, liquidity, capital expenditures or capital assets that’s materials to stockholders.

 

Outcomes of Operations – Three Months
Ended February 29, 2020 and February 28, 2019

 

The next abstract of our outcomes of operations
needs to be learn along with our unaudited condensed consolidated monetary statements for the three months ended February
29, 2020.

 

For the three month durations ended February
29, 2020 and February 28, 2019

 

Our working outcomes for the three month interval
ended February 29, 2020 in comparison with the three month interval ended February 28, 2019 are described under:

 

Income

 

We now have not earned any revenues since our inception
and we don’t anticipate incomes revenues till such time as we’ve got accomplished the event of our Well being Card software program and
obtained new clients.

  

Bills

 

Our working loss for the three month interval
ended February 29, 2020 was $45,115 in comparison with $47,926 for the three month interval ended February 28, 2019. The lower in loss
of $2,811 for the three months interval ending February 29, 2020 is because of a rise in skilled charges of $1,524, a lower
in analysis and improvement of $4,142 and a lower of $194 in workplace and administration charges.

  

Consulting Charges

 

Through the three months ended February 29,
2020 and February 28, 2019, Tom Zapatinas, the Chief Government Officer and Director of the Firm, earned $30,000 and $30,000,
respectively, for consulting providers supplied to the Firm.

 

Analysis and Growth

 

Analysis and improvement bills through the
three month interval ended February 29, 2020 decreased by $4,142 in comparison with the three month interval ended February 28, 2019, as net
updates and platform improvement have been being accomplished within the earlier 12 months.

 

Wages and Advantages

 

There have been no wages and advantages through the
three month interval ended February 29, 2020 or February 28, 2019.

 

Workplace and Administration

 

Workplace and administration
bills decreased by $194
 for the interval ended February
29, 2020 in comparison with the three month interval ended February 28, 2019, resulting from a lower in journey bills.

  

Skilled Charges

 

Skilled charges through the three months ended
February 29, 2020 elevated by $1,524 in comparison with the three months ended February 28, 2019, resulting from a rise in accounting charges.

 

Curiosity Expense

 

Curiosity expense is $Zero for the three months
ended February 29, 2020 and February 28, 2019 as a result of accounts payable and accrued liabilities – associated celebration, convertible
notice payable – associated celebration and loans payable – shareholders are non-interest bearing.

Outcomes of Operations – 9 months
Ended February 29, 2020 and February 28, 2019

 

The next abstract of our outcomes of operations
needs to be learn along with our unaudited condensed consolidated monetary statements for the 9 months ended February
29, 2020.

 

For the 9 month interval ended February
29, 2020 and February 28, 2019

 

Our working outcomes for the 9 month interval
ended February 29, 2020 in comparison with the 9 month interval ended February 28, 2019 are described under:

 

Income

 

We now have not earned any revenues since our inception
and we don’t anticipate incomes revenues till such time as we’ve got accomplished the event of our Well being Card software program and
obtained new clients.

  

Bills

 

Our working loss for the 9 month interval
ended February 29, 2020 was $132,255 in comparison with $151,383 for the 9 month interval ended February 28, 2019. The lower in loss
of $19,128 for the 9 month interval ending February 29, 2020 is because of a lower in consulting charges of $1,911, a rise in
skilled charges of $3,884, a lower in analysis and improvement of $12,226 and a lower of $8,875 in workplace and administration
charges.

  

Consulting Charges

 

Through the 9 months ended February 29, 2020
and February 28, 2019, Tom Zapatinas, the Chief Government Officer and Director of the Firm, earned $90,000 and $90,000, respectively,
for consulting providers supplied to the Firm.

 

Analysis and Growth

 

Analysis and improvement bills through the
9 month interval ended February 29, 2020 decreased by $12,226 in comparison with the 9 month interval ended February 28, 2019, as net
updates and platform improvement have been being accomplished within the earlier 12 months.

 

Wages and Advantages

 

There have been no wages and advantages through the
9 month durations ended February 29, 2020 or February 28, 2019.

 

Workplace and Administration

 

Workplace and administration
bills decreased by $8,875
 for the interval ended
February 29, 2020 in comparison with the 9 month interval ended February 28, 2019, resulting from a lower in journey bills.

  

Skilled Charges

 

Skilled charges through the 9 months ended
February 29, 2020 elevated by $3,884 in comparison with the 9 month interval ended February 28, 2019, because of the timing of our annual
audit.

 

Curiosity Expense

 

Curiosity expense is $Zero for the 9 months
ended February 29, 2020 and February 28, 2019 as a result of accounts payable and accrued liabilities – associated celebration, convertible
notice payable – associated celebration and loans payable – shareholders are non-interest bearing.

 

 

 

Important Accounting Insurance policies

 

We now have recognized sure accounting insurance policies,
described under, which can be crucial to the portrayal of our present monetary situation and outcomes of operations.

 

Income recognition

 

In accordance with ASC 606, income is acknowledged
when a buyer obtains management of promised items or providers. The quantity of income acknowledged displays the consideration to which
we anticipate to be entitled to obtain in exchange for these items or providers. The provisions of ASC 606 embody a five-step course of
by which we decide income recognition, depicting the switch of products or providers to clients in quantities reflecting the cost
to which we anticipate to be entitled in exchange for these items or providers. ASC 606 requires us to use the next steps: (1)
determine the contract with the shopper; (2) determine the efficiency obligations within the contract; (3) decide the transaction
price; (4) allocate the transaction price to the efficiency obligations within the contract; and (5) acknowledge income when, or as,
we fulfill the efficiency obligation.

 

Software program Growth Prices

The Firm accounts for software program improvement
prices in accordance with a number of accounting pronouncements, together with FASB ASC 730, Analysis and Growth, FASB ASC 350-40,
Inside-Use Software program, FASB 985-20, Prices of Laptop Software program to be Bought, Leased, or Marketed and FASB ASC 350-50, Web site Growth
Prices.

 

Prices incurred through the interval of planning
and design, previous to the interval figuring out technological feasibility, for all software program developed to be used inner and exterior,
has been charged to operations within the interval incurred as analysis and improvement prices.  Moreover, prices incurred after
dedication of readiness for market have been expensed as analysis and improvement.

 

ITEM 3.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

 

Not relevant.

  

ITEM 4. CONTROLS AND PROCEDURES.

 

Analysis of Disclosure Controls
and Procedures

Administration, evaluated the effectiveness
of our disclosure controls and procedures, as outlined beneath Alternate Act Rule 13a-15(e). Primarily based upon this analysis, the Chief
Government Officer and Chief Monetary Officer concluded that, as of February 29, 2020, the disclosure controls and procedures have been
not efficient.

Disclosure controls and procedures are
the controls and different procedures which can be designed to make sure that info required to be disclosed in our Firm’s
Alternate Act stories is recorded, processed, summarized and reported inside the time durations specified within the Securities Alternate
Fee’s guidelines and types.

Modifications in Inside Management over
Monetary Reporting

There have been no modifications in our inner
controls over monetary reporting that occurred through the three month interval ended February 29, 2020 which have materially affected,
or are moderately prone to materially have an effect on, our inner controls over monetary reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We all know of no materials pending authorized proceedings
to which our firm or subsidiary is a celebration or of which any of our property is the topic. As well as, we have no idea of any
such proceedings contemplated by any governmental authorities.

We all know of no materials proceedings through which
any director, officer or affiliate of our firm, or any registered or helpful stockholder of our firm, or any affiliate
of any such director, officer, affiliate, or stockholder is a celebration adversarial to our firm or subsidiary or has a cloth curiosity
adversarial to our firm or subsidiary.

 

ITEM 1A. RISK FACTORS

 

Not relevant to smaller reporting firms.

 

ITEM 2.  UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS

 

On October 29, 2019, the Firm issued 100,000
shares of frequent stock of the Firm to settle accounts payable and accrued liabilities– associated celebration with a carrying value
of $50,000.

  

ITEM 3.  DEFAULTS UPON SENIOR
SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not relevant.

 

ITEM 5.  OTHER INFORMATION

 

None.

 

ITEM 6.   EXHIBITS

 

Exhibit
Quantity
  Description
3.1   Articles of Incorporation (Included by reference to the Reveals filed with the Type SB-2 filed with the SEC on March 16, 2006)
3.2   Certificates of Modification to Articles of Incorporation (Included by reference to the Reveals filed with Schedule 14C on November 14, 2008)
3.3   Bylaws (Included by reference to the Reveals filed with the Type SB-2 filed with the SEC on March 16, 2006)
3.4   Amended Bylaws (Included by reference to the Reveals filed with the Type SB-2 filed with the SEC on March 16, 2006)
10.3   Acquisition Settlement dated April 22, 2008 (Included by reference to the Reveals filed with the Type 8-Okay on May 19, 2008)
10.4   Promissory notice dated June 1, 2011 issued to Macleod Initiatives Inc. (Included by reference to the Reveals filed with the annual report on Type 10-Okay  for the 12 months ended May 31, 2011 filed with the SEC on October 21, 2011)
10.5   Promissory notice dated August 5, 2011 issued to Macleod Initiatives Inc. (Included by reference to the Reveals filed with the annual report on Type 10-Okay  for the 12 months ended May 31, 2011 filed with the SEC on October 21, 2011)
31.1*   Part 302 Certification of Principal Government Officer
32.1*   Certification Pursuant to 18 U.S.C. Part 1350 as adopted pursuant to Part 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL INSTANCE DOCUMENT
101.SCH*   XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*   XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*   XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*   XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*   XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.

SIGNATURES

 

Pursuant to the necessities of the Securities Alternate Act of 1934,
the registrant has duly brought about this report back to be signed on its behalf by the undersigned thereunto duly approved.

 

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

 

By:  /s/Tom Zapatinas                                                                           

Title: Tom Zapatinas

Title:   President, Chief Government Officer and Chief
Monetary Officer

(Principal Government Officer and Principal Monetary Officer)

 

Date: June 2, 2020

  

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

 

I, Tom Zapatinas, certify that:

 

1.           I
have reviewed this quarterly report on Type 10-Q for the quarter ended February 29, 2020 of PreAxia Well being Care
Cost Techniques Inc.;

 

2.           Primarily based
on my information, this report doesn’t comprise any unfaithful assertion of a cloth reality or omit to state a cloth reality vital
to make the statements made, in mild of the circumstances beneath which such statements have been made, not deceptive with respect to
the interval lined by this report;

 

3.           Primarily based
on my information, the monetary statements, and different monetary info included on this report, pretty current in all materials
respects the monetary situation, outcomes of operations and cash flows of the registrant as of, and for, the durations offered
on this report;

 

4.           The
registrant’s different certifying officer(s) and I are liable for establishing for establishing and sustaining disclosure
controls and procedures (as outlined in Alternate Act Guidelines 13a-15(e) and 15d-15(e)) and inner management over monetary reporting
(as outlined in Alternate Act Guidelines 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.           Designed
such disclosure controls and procedures, or brought about such disclosure controls and procedures to be designed beneath our supervision,
to make sure that materials info referring to the registrant, together with its consolidated subsidiaries, is made recognized to us by
others inside these entities, notably through the interval through which this report is being ready;

 

b.           Designed
such inner management over monetary reporting, or brought about such inner management over monetary reporting to be designed beneath our
supervision, to offer affordable assurance concerning the reliability of economic reporting and the preparation of economic
statements for exterior functions in accordance with typically accepted accounting rules,

 

c.           Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and offered on this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the top of the interval lined by this report based mostly on such analysis;
and

 

d.           Disclosed
on this report any change within the registrant’s inner management over monetary reporting that occurred through the registrant’s
most up-to-date fiscal quarter (the registrant’s fourth fiscal quarter within the case of an annual report) that has materially affected,
or within reason prone to materially have an effect on, the registrant’s inner management over monetary reporting; and

 

5.           The
registrant’s different certifying officer(s) and I’ve disclosed, based mostly on our most up-to-date analysis of inner management over
monetary reporting, to the registrant’s auditors and the audit committee of the registrant’s board of administrators (or
individuals performing the equal capabilities):

 

a.           All
vital deficiencies and materials weaknesses within the design or operation of inner management over monetary reporting which
are moderately prone to adversely have an effect on the registrant’s capability to document, course of, summarize and report monetary info;
and

 

b.           Any
fraud, whether or not or not materials, that includes administration or different staff who’ve a big position within the registrant’s
inner management over monetary reporting.

 

June 2, 2020

 

   
  /s/ Tom Zapatinas
  Tom Zapatinas, Chief Government Officer and Chief Monetary Officer
  (Principal Government Officer and Principal Monetary 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

 

In reference to the
Quarterly Report of PreAxia Well being Care Cost Techniques Inc. (the “Company”) on Type 10-Q for the quarter ended
February 29, 2020 as filed with the Securities and Alternate Fee (the “Report”), I, Tom Zapatinas,
Chief Government Officer and Chief Monetary Officer of the Firm, certify, pursuant to 18 U.S.C. SS. 1350, as adopted
pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.         The
Report absolutely complies with the necessities of Part 13(a) or 15(d) of the Securities Alternate Act of 1934; and

 

2.         The
info contained within the Report pretty presents, in all materials respects, the monetary situation and results of operations
of the Firm.

   
 
June
2, 2020
/s/ Tom Zapatinas
 

Tom Zapatinas, Chief Government Officer and Chief
Monetary Officer

(Principal Government Officer and Principal Monetary
Officer)

 

A signed authentic of this written assertion
required by Part 906, or different doc authenticating, acknowledging, or in any other case adopting the signature that seems in typed
type inside the digital model of this written assertion has been supplied to the Firm and will probably be retained by the Firm
and furnished to the Securities and Alternate Fee or its employees upon request.

 

 

Oliver Smith

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