10-Q: REGO Payment Architectures Faces Imminent Cash Shortage

REGO Payment Architectures, a mobile payment platform provider, reported no revenue, increased losses, and a critical cash position, raising substantial doubt about its ability to continue operations beyond December 2025.

Summary

• REGO Payment Architectures, Inc. reported no net revenue for the three and nine months ended September 30, 2025, consistent with prior periods.
• The net loss for the nine months ended September 30, 2025, increased to $7,274,014 from $7,109,131 in the same period of 2024.
• Net loss attributable to common stockholders for the nine months ended September 30, 2025, was $9,390,802, up from $9,110,164 in the prior year.
• Cash and cash equivalents significantly decreased to $1,691,485 as of September 30, 2025, from $3,011,493 at December 31, 2024.
• Total current liabilities increased to $47,068,358 as of September 30, 2025, from $41,105,603 at December 31, 2024.
• The company's stockholders' deficit worsened to $(45,040,213) as of September 30, 2025, from $(37,756,872) at December 31, 2024.
• As of November 14, 2025, the company had approximately $1,000,000 in cash, which management believes will only finance operations through December 2025.
• Operating expenses for the nine months ended September 30, 2025, were $6,535,148, a slight increase from $6,367,670 in the prior year.
• Interest expense, net, increased to $799,042 for the nine months ended September 30, 2025, due to increased outstanding debt.
• Accrued preferred dividends reached $16,090,210 as of September 30, 2025, recorded as a current liability.
• The company issued an additional $3,305,000 in 10% Secured Convertible Promissory Notes to stockholders during the nine months ended September 30, 2025.
• A 10% Secured Convertible Noteholder converted $200,000 of principal plus $104,468 of accrued interest into 3,383 shares of Series B Preferred Stock during the nine months ended September 30, 2025.
• The company's focus has shifted from business-to-consumer (B2C) to a business-to-business (B2B) licensing model for its Mazoola platform.
• Management does not project significant revenue development until late fourth quarter of 2025 at the earliest.

Sentiment

Score: 1

Explanation: The company is in a critical financial state, reporting no revenue, increasing losses, and a rapidly dwindling cash balance that management projects will only last through December 2025. There is explicit doubt about its ability to continue as a going concern, and significant external financing is required immediately, with no guarantee of success. This indicates extreme financial distress and a very negative outlook.

Positives

• Net cash used in operating activities decreased by $883,578 to $4,619,801 for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to changes in share-based compensation.
• Other income increased by $60,176 for the nine months ended September 30, 2025, primarily from the sale of the Oink.com domain name.
• The company has successfully extended the maturity date of its $20 million Investor Private Line of Credit agreement with an existing shareholder to March 13, 2026, with a current outstanding balance of $0.
• The company's platform is designed to be compliant with COPPA, CCPA, and GDPR, and has received the GDPRkids™ Trustmark from PRIVO, providing a competitive advantage in secure controlled payments for minors.

Negatives

• The company has not generated any significant revenue since its inception.
• Net loss increased for both the three and nine months ended September 30, 2025, compared to the same periods in 2024.
• Cash and cash equivalents have significantly decreased, with only approximately $1,000,000 on hand as of November 14, 2025.
• Management explicitly states that existing cash resources will not be sufficient to sustain operations during the next twelve months and will not finance operations beyond December 2025.
• Total liabilities, particularly current liabilities, have substantially increased, leading to a growing stockholders' deficit.
• Accrued preferred dividends continue to accumulate, reaching over $16 million, which is recorded as a current liability.
• The company continues to rely heavily on debt and equity financing from stockholders to fund operations, increasing outstanding debt levels.

Risks

• Inability to raise additional capital to sustain operations.
• Absence of any material operating history or revenue generation.
• Difficulty in attracting and retaining qualified personnel.
• Challenges in developing and introducing new services and products to the market in a timely manner.
• Uncertainty regarding market acceptance of the company's services and products.
• Limited experience in the industry, potentially hindering growth and market penetration.
• Inability to successfully develop licensing programs and generate business through partners.
• Rapid technological change in relevant markets, potentially making the company's technology obsolete.
• Risk of unexpected network interruptions or security breaches affecting the platform.
• Inability to successfully complete its strategic alternatives process, including a prospective sale of the company.
• Changes in demand for current and future intellectual property rights.
• Adverse legislative, regulatory, and competitive developments.
• Intense competition with larger companies that have greater resources.
• Negative impact of general economic conditions on business operations and financing efforts.
• Failing to secure additional financing to operationalize the company's current technology before another company develops or markets similar competing technology.
• Dilution to existing shareholders if additional equity or convertible debt is issued.
• Inability to execute the business plan or pay costs and expenses if additional funds are not obtained.
• The business might fail if unable to generate sufficient revenue or raise sufficient capital to fund operations.

Future Outlook

The company faces substantial doubt about its ability to continue as a going concern due to significant losses and negative cash flow. Management believes existing cash resources will not sustain operations for the next twelve months and will only last through December 2025. The company needs to generate sufficient revenue or secure additional financing through debt and/or equity, which would dilute existing shareholders. Significant revenue is not projected until late Q4 2025 at the earliest, and there is no assurance that sufficient capital will be raised or revenue generated to fund operations, potentially leading to business failure. The company is shifting its focus to a B2B licensing model for its platform, targeting financial institutions and other large family-focused account bases, and exploring other B2B opportunities.

Management Comments

• Management believes that building on its COPPA advantage, the future of REGO Payment Architectures, Inc. will be based on the foundational architecture of the Platform that will allow its use across multiple financial markets where secure controlled payments are needed.
• Management believes this approach will enable the Company to reduce expenses while broadening its reach.
• Our goal, moving forward, is to enable both incumbent and new financial technology (FinTech) participants, as well as key verticals with a large base of family accounts, to provide their consumers with safe and empowering youth money management and financial literacy content and tools via the mobile payment platform.
• We anticipate that revenues generated from the Platform will come from multiple sources depending on the level of service and facilities requested.
• We believe that defending our market position rests on three factors: 1. The ability to define data control settings from parent to child. ... 2. The ability to (mis)attribute the childs transaction and personal identification. ... 3. The ability to disseminate transactional data on minors while remaining COPPA and GDPR compliant.
• We believe that our near-term success will depend particularly on our ability to develop customer awareness and confidence in our service.
• Since we have extremely limited capital resources, we will need to closely manage our expenses and conserve our cash by continually monitoring any increase in expenses and reducing or eliminating unnecessary expenditures.
• We do not project that significant revenue will be developed at the earliest until late fourth quarter of 2025.
• Based upon the current cash position and the Companys planned expense run rate, management believes the Company will not be able to finance its operations beyond December 2025.

Industry Context

REGO Payment Architectures operates in the FinTech sector, specifically targeting youth money management and secure payment solutions. Its core offering, Mazoola, emphasizes compliance with stringent privacy regulations like COPPA and GDPR, which is a critical differentiator in markets dealing with minors' data. The company is shifting from a direct-to-consumer model to a business-to-business licensing strategy, aiming to integrate its platform with established financial institutions and other large organizations. This strategy aligns with a broader industry trend of white-labeling and platform-as-a-service models, particularly in specialized compliance-heavy niches. The company's focus on age verification, hierarchical account management, and data control addresses significant challenges in the digital payments and privacy landscape.

Legal Proceedings

• No material developments in legal proceedings since the disclosure in the company's Form 10-K for the year ended December 31, 2024.

Related Party Transactions

• As of September 30, 2025, the company owed the Chief Executive Officer $12,308 in unpaid salary.
• As of September 30, 2025, the company owed the Chief Financial Officer $5,846 in unpaid salary.
• On February 19, 2025, the Chief Executive Officer and Chief Financial Officer each received cash bonuses of $30,000.
• The 10% Secured Convertible Promissory Notes payable are held by stockholders.
• Notes payable are held by stockholders.
• The 4% Secured Convertible Promissory Notes payable are held by stockholders.
• The Investor Private Line of Credit agreement is with an existing shareholder of the company.

Stakeholder Impact

• **Shareholders**: Face significant risk of dilution from potential future equity or convertible debt raises. Common stockholders are at high risk of substantial loss due to the company's going concern doubt and lack of revenue. Preferred stockholders have liquidation preferences, but the overall financial distress impacts all equity holders.
• **Employees**: Unpaid salaries for key executives suggest potential cash flow issues that could affect all employees. Job security is highly uncertain given the company's stated inability to finance operations beyond December 2025 without new capital.
• **Creditors (Noteholders)**: While notes are secured by company assets, the repeated extensions of maturity dates and the company's severe financial distress raise concerns about the timely repayment of principal and accrued interest.
• **Customers/Partners**: Potential B2B partners may be hesitant to engage with the company due to its precarious financial position and the explicit going concern doubt, which could impact the adoption and success of its licensing model. Existing users of the Mazoola app could face service disruptions if the company fails.

Next Steps

• Generate sufficient revenue to support operations and cover ongoing costs and expenses.
• Obtain additional financing through the sale of debt and/or equity securities to fund the business plan and platform enhancements.
• Execute the business plan, including the rollout of the Platform to subscribing financial institutions.
• Develop customer awareness and confidence in its service, particularly for the B2B licensing model.
• Closely manage expenses and conserve cash to extend operational runway.
• Continue exploring licensing opportunities in alternative fields of use for its proprietary technology.
• Analyze specific components of its technology for individual monetization and explore B2B opportunities in areas like government social services and closed network payments.

Key Dates

Recommendation

The company is in an extremely distressed financial state, characterized by a complete absence of revenue, escalating net losses, and a critically low cash balance that management projects will only sustain operations for approximately one more month. The explicit 'going concern' doubt, coupled with the necessity for immediate and substantial external financing that is not guaranteed, presents an untenable risk profile. The repeated extensions of debt maturity dates further underscore severe liquidity challenges. Without a clear path to revenue generation or secured financing, the probability of business failure is exceptionally high, making the stock a strong sell.

Keywords

mobile payment platform, FinTech, COPPA compliant, GDPR compliant, youth money management, family banking solution, Mazoola, SEC filing, quarterly report, going concern, capital raise, financial literacy, B2B licensing, payment architecture, digital wallet