10-K: REGO Payment Architectures Reports $12.4M Loss in 2025

REGO Payment Architectures, a FinTech company focused on youth and family mobile banking, reported a net loss of $12.4 million in 2025, with auditors raising substantial doubt about its ability to continue as a going concern.

Summary

• REGO Payment Architectures, Inc. (REGO) is a FinTech company providing the Mazoola mobile payment platform, a family-focused mobile banking solution designed for minors with COPPA and GDPR compliance.
• The company reported a net loss attributable to common stockholders of $12.4 million for the year ended December 31, 2025, an increase from $11.6 million in 2024.
• Revenues for 2025 were $2,250, up from $0 in 2024, indicating minimal revenue generation to date.
• As of December 31, 2025, the accumulated deficit stood at approximately $160.2 million.
• Cash and cash equivalents significantly decreased from $3,011,493 at the end of 2024 to $158,687 at the end of 2025, with a cash position of approximately $0.2 million as of March 31, 2026.
• Auditors have raised substantial doubt about the company's ability to continue as a going concern, and management believes existing cash is insufficient for the next twelve months.
• Strategic partnerships were established with Computer Services, Inc. (CSI) and Jack Henry & Associates in 2024 to integrate the Family Wallet white-label solution into their networks of financial institutions.
• Key achievements in 2025 include launching the first Family Wallet white-label solution for a $7 billion AUM bank and advancing a second solution to Beta stage for a $6 billion AUM credit union.
• The company also completed SOC 2 Type I and Type II audits and prototyped a "Senior Guard" product for elder financial protection.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly concerning report due to persistent and increasing losses, critically low cash reserves, and the explicit 'going concern' warning from auditors, despite some strategic progress.

Positives

• Successfully launched the first Family Wallet white-label solution for a $7 billion AUM bank with over 160,000 customers.
• Advanced a second Family Wallet white-label solution integration to Beta stage for a $6 billion AUM credit union, with an expected launch in Q1 2026.
• Established strategic partnerships with Computer Services, Inc. (CSI) and Jack Henry & Associates, potentially expanding reach to over 8,000 financial institutions.
• Achieved SOC 2 Type I and SOC 2 Type II audits, demonstrating commitment to security and compliance.
• Developed a prototype for the "Senior Guard" product, addressing an emerging demand for tools to manage and protect elder finances, a market estimated at $1 billion.
• Maintains a portfolio of four US patent awards and several trademarks, providing intellectual property protection for its core technology.
• The Mazoola platform is designed to be COPPA and GDPR compliant, a significant competitive advantage in the youth digital payments market.

Negatives

• Incurred a net loss attributable to common stockholders of $12.4 million in 2025, an increase from $11.6 million in 2024.
• Generated minimal revenue of $2,250 in 2025, indicating a continued lack of significant revenue generation since inception.
• Accumulated deficit reached approximately $160.2 million as of December 31, 2025.
• Cash and cash equivalents drastically decreased from $3,011,493 at December 31, 2024, to $158,687 at December 31, 2025, and further to approximately $0.2 million by March 31, 2026.
• Auditors have raised substantial doubt about the company's ability to continue as a going concern.
• Management believes existing cash resources are insufficient to sustain operations for the next twelve months.
• Significant revenue is not projected to be developed until at least the second quarter of 2026.
• General and administrative expenses increased by $0.8 million to $4.5 million in 2025, partly due to $1.0 million in consulting options expenses.
• Interest expense, net, increased by $0.1 million to $1.1 million in 2025 due to higher outstanding debt.
• The Investor Private Line of Credit for up to $20 million expired on March 13, 2026, without any draws.
• Two executive officers (CEO and Chairman) failed to file required Section 16(a) reports, and the CEO also failed to report a disposition of shares.

Risks

• History of losses and minimal revenue generation, requiring additional capital to execute the business plan.
• Substantial doubt about the ability to continue as a going concern, as noted by independent accountants.
• Inability to raise additional capital on acceptable terms, potentially leading to liquidation.
• Unproven business model as a start-up company introducing new services and technologies.
• Management's limited direct experience in the online payment or retail industries.
• Uncertainty regarding the level of consumer and industry acceptance of the Mazoola platform.
• Fluctuations in demand for the platform due to economic conditions, competition, and technological changes.
• Risk of undetected programming errors or flaws in the platform, potentially harming reputation and market acceptance.
• Future growth is highly dependent on developing technologies that achieve market acceptance with acceptable margins.
• Vulnerability to security breaches and other disruptions, which could compromise information and expose the company to liability.
• Dependence on key individuals and the ability to attract and retain qualified personnel, as well as reliance on third-party developers.
• Lack of comprehensive patent and/or copyright protection, and potential for unauthorized use of the platform by third parties.
• Risk of claims regarding infringement of intellectual property rights of others, leading to substantial costs and diversion of resources.
• Adverse impact from laws regulating financial institutions, such as the Dodd-Frank Act.
• Potential harm to business from changes to payment card networks or bank fees, rules, or practices, or termination of ability to accept credit cards.
• Capacity constraints or system disruptions (e.g., natural disasters, telecommunications failures, computer hacking) could materially affect the business.
• Dependence on broadband carriers, with risks of disruptions or limited access.
• Potential for illegal use of the payment system, leading to claims and liability.
• Exposure to credit card transaction fraud, especially for gift card sales where the company is the merchant of record.
• Inability to effectively protect intellectual property rights on a worldwide basis, hindering international expansion.
• The ongoing strategic alternatives process may not result in a successful corporate transaction or liquidity event.
• Challenges in successfully managing growth, potentially straining management and operations.
• Substantial expenses incurred as a public company, which may be material.
• Operating in a highly competitive industry with numerous larger competitors.
• Limited trading and liquidity of common stock on the OTC QB, making it difficult for purchasers to sell shares.
• Inability to qualify for listing on a national stock exchange, limiting institutional investment and future capital raises.
• Applicable SEC rules governing penny stocks may limit trading and liquidity.
• Outstanding preferred stock has rights and preferences superior to common stock, potentially diluting common stockholders.
• Future issuances of securities for additional funding may be dilutive to shareholders or impose operational restrictions.
• No dividends are expected in the foreseeable future, requiring investors to rely on stock appreciation for returns.
• Not subject to certain corporate governance provisions of the Sarbanes-Oxley Act, potentially reducing shareholder protections.
• Requirement to remain current in SEC filings for continued OTC QB quotation.
• Board's authority to issue additional preferred stock with superior rights could decrease common stock value and delay a change in control.
• Provisions in the certificate of incorporation, bylaws, and Delaware law may make a contested takeover more difficult.
• Influx of additional shares onto the market (e.g., via Rule 144) may create downward pressure on the stock price.
• Potential need for shareholders to authorize additional shares for financing, with risks if not approved.
• Management's judgment in estimating complex and subjective variables for stock-based compensation could impact non-cash compensation expense.

Future Outlook

The company anticipates generating revenue from multiple sources, including subscription fees, service fees, transaction fees, revenue sharing, licensing, data analytics sales, advertising, and rebates from banking partners. It projects significant revenue development will not occur until at least the second quarter of 2026. The strategy involves expanding the Mazoola platform to a growing US and global customer base, developing a digital ecosystem for children (super app), and integrating expanded in-application service modules like investments and financial literacy. The company also plans to develop predictive analytic products based on anonymized data.

Management Comments

• Management believes that by building on its COPPA compliance advantage, the future of REGO Payment Architectures, Inc. will be based on the foundational architecture of its software platform (the Platform) that will allow its use across multiple financial markets where secure controlled payments are needed.
• Management believes this approach [licensing and private labeling] will enable the Company to reduce marketing expenses while broadening its reach.
• Management believes there is robust demand for: 1. A digital ecosystem for children embedded within a marketplace of service offerings... 2. Expanded in-application service modules such as investments, charitable giving, and financial literacy... 3. Predictive analytic products and services based on REGOs anonymized data collection techniques.
• REGO believes the market is primed for its unique digital family life cycle platform.
• Based upon the current cash position and the Companys planned expense run rate, management believes the Company will be able to finance its operations through April 2026.
• We do not project that significant revenue will be developed until at the earliest the second quarter of 2026.

Industry Context

StockSavvy.ai notes that REGO Payment Architectures operates within the rapidly expanding FinTech industry, which was valued at approximately $395 billion in 2025 and is projected to exceed $1 trillion by 2032. The company's focus on digital payments for younger generations (Gen Z and Gen Alpha) aligns with the global trend of increasing digital wallet users (4.5 billion in 2025, projected 6 billion by 2030) and mobile payment adoption (over 2 billion users globally). The emphasis on COPPA and GDPR compliance positions REGO to address growing regulatory scrutiny and consumer concerns about data privacy, particularly for minors, a segment where non-compliance has led to substantial fines for competitors like Google, TikTok, and Microsoft. The company's expansion into elder financial protection with its "Senior Guard" prototype also taps into a critical and growing market need, as financial exploitation of seniors resulted in over $38 billion in losses in 2023.

Comparison to Industry Standards

• REGO's focus on COPPA and GDPR compliance for youth digital payments sets it apart from general payment services like Zelle, Venmo, and PayPal, which do not specifically cater to the under-18 market with such stringent regulatory adherence.
• While the global FinTech market is robust, REGO's minimal revenue of $2,250 in 2025 stands in stark contrast to the industry's multi-billion dollar transaction values, such as the U.S. digital payment market exceeding $3 trillion in 2025.
• The company's accumulated deficit of $160.2 million and ongoing losses are typical of early-stage technology companies but highlight a significant gap compared to established, profitable FinTech players.
• The strategic partnerships with CSI (over 500 financial institutions) and Jack Henry & Associates (approximately 7,500 financial institutions) are significant in terms of potential distribution reach, comparable to how major payment processors integrate with a broad network of banks and credit unions.
• The successful completion of SOC 2 Type I and Type II audits aligns with industry best practices for data security and compliance, a standard expected of financial technology providers.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not a party to any pending legal proceedings, nor is it aware of any governmental authority contemplating any legal proceeding against it, except for a subpoena received in September 2014 from the SEC regarding an investigation into trading in the company's stock. The company has been cooperating fully with this subpoena.

Related Party Transactions

• Unpaid salary owed to Peter S. Pelullo (CEO and >5% beneficial owner): $6,154 as of December 31, 2025 (vs. $4,327 in 2024).
• Unpaid salary owed to Joseph R. Toczydlowski (CFO): $2,923 as of December 31, 2025 (vs. $2,192 in 2024).
• Consulting agreement with Mr. Pelullo's son: $10,000 per month, with $120,000 expensed in both 2025 and 2024. No amounts owed as of December 31, 2025 and 2024.
• Cash bonuses of $30,000 each were paid to the CEO and CFO on February 19, 2025.
• The 10% Secured Convertible Notes Payable and 4% Secured Convertible Promissory Notes Payable are held by stockholders.
• The Investor Private Line of Credit agreement was with James Davison, an existing shareholder.

Stakeholder Impact

• Shareholders: Face significant dilution risk from future equity raises and conversion of preferred stock/notes. Common stockholders have inferior rights to preferred stockholders. The "going concern" warning and persistent losses pose a high risk of investment loss. Limited trading liquidity on OTC QB makes selling shares difficult.
• Employees: The company has only 5 employees, and its ability to attract and retain qualified personnel is a stated risk, indicating potential instability if the business plan is not successfully executed.
• Customers (Financial Institutions/Partners): Benefit from a COPPA/GDPR compliant white-label solution, potentially reducing their own compliance burden and expanding their offerings to youth and families. However, the company's financial instability could pose a risk to long-term support and development.
• Customers (End-Users of Mazoola): Benefit from a secure, parent-controlled platform for youth financial management. The company's focus on privacy and financial literacy is a positive.
• Creditors: Holders of the 10% and 4% secured convertible notes are exposed to the company's financial distress, although their notes are secured by company assets. The expiration of the LOC without being drawn suggests a cautious approach by a related party lender.

Next Steps

• Generate sufficient revenues to support the cost structure and fund business plan enhancements.
• Seek additional financing through the sale of debt and/or equity securities if revenue targets are not met.
• Continue to develop and monetize the Mazoola Digital Wallet Platform through white label, licensing, and partnership agreements.
• Launch the second Family Wallet white-label solution integration for a $6 billion AUM credit union in Q1 2026.
• Focus resources on product distribution and integration costs associated with the rollout of the Platform to subscribing financial institutions in 2026.
• Explore and assess strategic alternatives, including a potential sale of the company, with the assistance of an investment banking firm.
• Expand product offerings to address the "Senior Guard" demographic.
• Develop a digital ecosystem for children (super app) and expanded in-application service modules (investments, charitable giving, financial literacy, marketplaces, health centers, logistics/inventory management systems).
• Develop predictive analytic products and services based on anonymized data collection techniques.
• Continue to monitor and adapt to evolving privacy laws (e.g., Indiana, Kentucky, Rhode Island expected to enact laws in 2026).

Key Dates

Recommendation

The company's financial position is extremely precarious, marked by persistent and increasing net losses, negligible revenue generation, and a critically low cash balance of $0.2 million as of March 31, 2026. The independent auditors have issued a "going concern" qualification, and management explicitly states that current cash is insufficient for the next twelve months, with significant revenue not expected until Q2 2026 at the earliest. While strategic partnerships and product development show some operational progress, the severe liquidity crisis and the high probability of substantial dilution from future capital raises, if even obtainable, make the common stock a high-risk investment with a strong likelihood of further value erosion. The expiration of a $20 million line of credit without being drawn further underscores the difficulty in securing financing.

Keywords

FinTech, Mobile Payments, Digital Wallet, Mazoola, COPPA Compliance, GDPR Compliance, Youth Banking, Family Finance, White Label Solution, Financial Literacy, SEC 10-K, Going Concern, Strategic Partnerships, Intellectual Property, Cybersecurity, Parental Control, Elder Finance, RegTech