10-Q: Wewards Inc. Reports Q3 2025 Results: Losses Continue Amidst Efforts to Secure Licensing Agreements

Wewards Inc. reports ongoing losses for the third quarter of 2025 as it seeks licensing agreements for its web-based platform.

Summary

• Wewards, Inc., a Nevada corporation, released its unaudited financial statements for the quarter ended February 28, 2025.
• The company is focused on its web-based platform that enables consumers to purchase goods and earn Bitcoin rebates.
• Wewards intends to generate revenue by licensing white-label versions of its platform.
• For the three months ended February 28, 2025, the company reported a net loss of $138,291, compared to a net loss of $140,514 for the same period in 2024.
• For the nine months ended February 28, 2025, the company reported a net loss of $437,848, compared to a net loss of $511,077 for the same period in 2024.
• The company did not generate any revenue during the three and nine months ended February 28, 2025 and February 29, 2024.
• As of February 28, 2025, the company's cash balance was $717,853, and it had negative working capital of $3,194,162.
• The company's ability to continue as a going concern is dependent on its ability to raise additional capital and achieve sustainable revenues.
• The company has been dependent on its CEO and majority shareholder, Mr. Pei, for financing in the form of convertible loans.
• There is no assurance that Mr. Pei will continue to provide additional financing.
• The company has convertible notes payable to a related party totaling $10,500,000.
• The company terminated its office lease effective October 31, 2023.

Sentiment

Score: 3

Explanation: The document presents a negative outlook due to ongoing losses, lack of revenue, and dependence on related party financing. The company's ability to continue as a going concern is uncertain, and there is no guarantee of future funding.

Positives

• The net loss decreased for both the three and nine months ended February 28, 2025, compared to the same periods in 2024.
• Rent expense decreased significantly due to the termination of the office lease.
• The company is actively pursuing licensing agreements to generate revenue.

Negatives

• The company has incurred recurring losses from operations, resulting in an accumulated deficit of $18,963,177.
• The company has negative working capital of $3,194,162.
• The company did not generate any revenue during the reported periods.
• The company's ability to continue as a going concern is uncertain.
• The company is dependent on related party financing, with no guarantee of continued support.

Risks

• The company's ability to continue as a going concern is dependent on raising additional capital and achieving sustainable revenues.
• There is no assurance that the CEO and majority shareholder will continue to provide financing.
• The company may not be able to obtain additional financing on satisfactory terms.
• The company may face challenges in achieving profitability.
• The company's dependence on related party financing poses a risk.

Future Outlook

The company's future outlook is dependent on its ability to raise additional capital, achieve sustainable revenues, and secure licensing agreements for its web-based platform. There is no assurance that the company will be able to achieve these goals.

Management Comments

• Management is actively pursuing licensing agreements to commence revenues.
• Management believes it is more likely than not that the net deferred tax assets will not be fully realizable.
• Management has concluded the Financial Statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

Industry Context

The company operates in the competitive online gaming and e-commerce industries, where success depends on securing licensing agreements and attracting users to its platform. The company's focus on Bitcoin rewards aligns with the growing interest in cryptocurrency and blockchain technology.

Comparison to Industry Standards

• It is difficult to compare Wewards' results to industry standards due to its lack of revenue and reliance on related party financing.
• Companies in the online gaming and e-commerce industries typically rely on a mix of revenue streams, including in-app purchases, advertising, and subscription fees.
• Wewards' strategy of licensing its platform to third parties is similar to that of other software companies, but its success will depend on its ability to attract licensees and generate revenue from those agreements.
• The company's focus on Bitcoin rewards is a unique feature that could differentiate it from competitors, but it also carries risks related to the volatility and regulatory uncertainty of cryptocurrency.

Related Party Transactions

• The company has convertible notes payable to Sky Rover Holdings, Ltd, an entity owned and controlled by Mr. Pei, totaling $10,500,000.
• The company recognized $392,671 and $394,110 of interest expense for the nine months ended February 28, 2025 and February 29, 2024, respectively, on related party loans.
• All revenues to date have been recognized from licensing Megopoly and related IP to Sandbx Corp., a separate company owned by the Chief Operating Officer of United Power and FL Galaxy, related parties of the Company, as our Chief Executive Officer, Lei Pei, is also the Chief Executive Officer of United Power and FL Galaxy.

Stakeholder Impact

• Shareholders face the risk of further dilution if the company raises additional capital.
• Employees' job security is uncertain due to the company's financial difficulties.
• Customers may be hesitant to use the company's platform due to concerns about its long-term viability.
• Suppliers and creditors face the risk of non-payment if the company is unable to raise additional capital.

Next Steps

• The company intends to generate revenue by licensing white-label versions of the Platform to third parties.
• The company is actively pursuing licensing agreements to commence revenues.
• The Company will adopt ASU No. 2023-07 on June 1, 2025.

Key Dates

Keywords

Wewards, financial results, licensing agreements, convertible notes, going concern, Bitcoin, Megopoly, related party transactions, net loss, revenue