10-Q: PreAxia Q2 2026 Financial Results and Strategic Update

PreAxia reports no revenue and a net loss of $857,028 for the six months ended November 30, 2025, as it pivots to AI-powered financial management software.

Summary

• Reported zero revenue for the three and six months ended November 30, 2025.
• Net loss for the six-month period was $857,028, compared to $18,293 in the prior year period.
• Operating expenses increased significantly to $688,189 for the six months, driven by management costs and R&D.
• Cash balance as of November 30, 2025, was $13,846.
• Working capital deficit improved to $754,919 from $2,341,169 as of May 31, 2025, largely due to debt conversions.
• Company is in the development stage for health care payment and personal financial management products.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a high-risk situation due to the lack of revenue, substantial going concern doubt, and the need for significant external capital to fund operations.

Positives

• Significant reduction in working capital deficit from $2,341,169 to $754,919.
• Successful conversion of substantial related party debt into equity, improving the balance sheet.
• Capitalized $129,790 in software development costs, indicating progress on product development.
• Adopted a 2025 Stock Plan to incentivize personnel and consultants.

Negatives

• Zero revenue generation continues to highlight the early-stage nature of the business.
• Substantial net loss of $857,028 for the six-month period.
• Management acknowledges that internal controls over financial reporting were not effective as of November 30, 2025.
• Heavy reliance on related party loans and equity issuance for survival.

Risks

• Substantial doubt exists regarding the ability to continue as a going concern.
• Current cash of $13,846 is insufficient to meet working capital requirements for the next twelve months.
• Requirement to raise an estimated $1,000,000 in additional capital to fund operations and business plan execution.
• Potential for significant dilution to existing shareholders if equity financing is pursued.
• Dependence on the successful development and market adoption of unproven AI-powered financial products.

Future Outlook

The company plans to raise $1,000,000 over the next twelve months to pay creditors and execute its business plan, which includes developing AI-powered personal financial management applications and penetrating markets in Canada and the US.

Management Comments

• Management believes that Canadian businesses are embracing new healthcare financing vehicles.
• Zane's product philosophy centers on the belief that everyone deserves access to genius-level financial guidance.
• The company is creating a personal AI-banker in your pocket.

Industry Context

StockSavvy.ai notes that the company is attempting to pivot from legacy health payment systems to a high-growth AI-driven fintech model, a sector currently characterized by high competition and significant capital requirements for user acquisition.

Comparison to Industry Standards

• The company's lack of revenue and reliance on debt/equity financing is typical for pre-revenue, development-stage fintech startups.
• The pivot to AI-powered 'super-apps' aligns with broader industry trends seen in companies like Chime or Revolut, though PreAxia lacks the scale and capital of these established players.

Management Changes

Corporate Governance

Legal Proceedings

• Management states there are no material pending legal proceedings.

Related Party Transactions

• Significant debt conversions and accruals related to CEO Tom Zapatinas and Director Pavel Bondarev.
• Employment agreements for Tom Zapatinas and Pavel Bondarev at $10,000 per month each.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future capital raises.
• Creditors are impacted by the company's ongoing liquidity constraints and reliance on debt-to-equity conversions.

Next Steps

• Raise $1,000,000 in additional capital.
• Fill senior management, sales, and engineering positions.
• Develop and launch personal financial management applications.
• Build strategic alliances with employers and insurance companies.

Key Dates

Recommendation

The company is in a precarious financial position with no revenue, substantial losses, and a stated need for significant capital, which will likely lead to further dilution of existing shareholders.

Keywords

PreAxia, Health Care Payment, Fintech, AI-powered banking, Personal financial management, Development stage, 10-Q